The definition of constructive dismissal in terms of section 186(1)(e) of the Labour Relations Act provides that dismissal means “an employee terminated a contract of employment because the employer made continued employment intolerable for the employee”.

The critical issues for determination in cases involving claims of constructive dismissal are:
a) whether the employee brought the contract to an end
b) whether the reason for the employee’s action was that the employer had rendered the prospect of continued employment ‘intolerable’
c) whether the employee had no reasonable alternative other than terminating he contract.
The onus of proving these requirements rests on the employee.
Allan Cooper* had been working for Brooms Corporation (a medical company) as a sales representative. In January 2013 he had been employed for 10 years. Since July 2013 the company’s overheads increased and their profits drastically started declining. Allan was earning a basic monthly salary of R22 500.00, a car allowance of R4 000.00 per month as well as commission on sales. Allan’s sales manager, Piet Van Westhuizen* summoned Allan into the office on Wednesday 8 January 2014 and advised him that Brooms Corporation could no longer afford to pay his basic monthly salary with immediate effect. Piet handed Allan a letter dated, 6 January 2014, that he had already drafted and signed. This letter reflected that Allan would solely be paid commission with immediate effect. After seeking advice, Allan was advised to lodge a written grievance in terms of the employer’s grievance procedure. Allan accordingly heeded the advice and emailed the written grievance to Piet. It reflected that the employer unilaterally amended his terms and conditions of employment without affording him the right to comment or challenge the letter, dated 6 January 2014. A grievance meeting was convened between Allan and Piet, but to no avail. Piet’s instructions from his Sales Director, Kobus van Rensburg*, was final.

Allan lodged another written grievance addressed to Kobus stating that the unilateral amendment was unlawful and unfair. Kobus held a separate grievance hearing with Allan, but stood steadfast and was not prepared to change the fact that the employer was only prepared to pay him commission henceforth. Allan addressed his financial commitments in the grievance hearing, but it fell on deaf ears.

On 15 January 2014, Allan resigned due to intolerable working conditions. His resignation letter mentioned that he had no reasonable alternative other than to resign as a result of the employer’s conduct. He also mentioned that he did not resign voluntarily but was induced to resign due to the fact that he would no longer be paid a basic monthly salary. Allan contended his resignation amounted to a constructive dismissal.

On 20 January 2014, Allan declared a labour dispute at the CCMA. A CCMA hearing took place on 12 February 2014. The matter was unresolved at conciliation and an arbitration hearing followed immediately after the conciliation hearing. On 19 February 2014, the CCMA commissioner handed down the arbitration award in favour of Allan. Allan was awarded seven month remuneration, being equivalent to seven month’s salary, car allowance and commission.

*Not their real names

For further information on any labour related matters, you can contact
Bernard Reisner:
W.Tel no.: 021 423 3959
Fax: 021 423 2105
Cell: 082 433 8714