Earlier this month, the Labour Court passed judgment in a review application regarding a constructive dismissal case, between Agricultural Research Council v Silas Ramashowana and Others (Case number: JR1432/15). Constructive dismissal cases are interesting for a number of reasons, and are specifically addressed in Section 186(1)(e) of the Labour Relations Act, which states that “dismissal means that an employee terminated employment with or without notice because the employer made continued employment intolerable for the employee”.
In this particular Labour Court case, the employee had been employed as a Divisional Human Resource Manager. On commencing employment with the employer, he was issued a company laptop, and signed a Due Care Agreement, in which he undertook to exercise due care in safeguarding the laptop which had been placed in his possession. In addition thereto, this agreement also made provision for the employee being liable for the monetary value of the replacement of the laptop, in the event that it was lost due to his negligence.
On 21 December 2012, the laptop allocated to him was stolen from his motor vehicle. The insurer refused to pay a claim for the replacement of the laptop, as its investigations revealed no forced entry into the vehicle of the employee.
The employer, after having conducted its own investigation, held the employee liable for the loss of the laptop, as its investigation had led them to conclude that the employee had been negligent in regards the theft of the laptop from his motor vehicle. As a result, the employer deducted the replacement cost of the laptop in three equal payments in October, November, and December 2013.
The employee was aggrieved by these deductions, as he was of the view that he had not been afforded an opportunity to state his side of the story. The employee was of the view that he had simply been an unfortunate victim of crime, which was common in the area in which the laptop had been stolen from his motor vehicle. It was further the view of the employee that criminals had jammed his vehicle’s car lock system, and had thereby gained access to his vehicle to steal certain of his personal belongings, as well as the company laptop. The employee had reported this to the South African Police Services.
Subsequent thereto, the employee refused to attend an enquiry into the loss of the laptop, as he was of the view that the employer simply wanted to rubberstamp its deductions from his salary. The employee then resigned on 1 March 2015, stating that “I hereby resign as a Divisional Human Resource Manager… albeit under duress because of the amount of R11 567.00 which was unlawfully deducted from my salary”.
The CCMA held that the employee was constructively dismissed, and the employer made application to the Labour Court in terms of Section 145 of the Labour Relations Act, seeking an order reviewing and setting aside the arbitration award made in favour of the employee.
The employer’s review was premised on its claim that the Commissioner had committed a material error in law, was that “the Commissioner had committed a material error in law when he wrongly applied the principles relating to constructive dismissal”.
The Labour Court judgment highlighted the three requirements in order for constructive dismissal to be established. Authority was quoted confirming that “…the first is that the employee must have terminated the contract of employment. The second is that the reason for termination of the contract must be that continued employment has become intolerable for the employee. The third is that it must have been the employee’s employer who had made continued employment intolerable. All these three requirements must be present if it is to be said that a constructive dismissal has been established. If one of them is absent, constructive dismissal is not established”.
This principle was put differently in the Labour Appeal Court case of National Health Laboratory Service v Yon and Others (Case Number…), in which it was held that “… a constructive dismissal occurs when an employee resigns from employment under circumstances where he or she would not have resigned but for the unfair conduct on the part of the employer toward the employee, which rendered continued employment intolerable for the employee”.
The Labour Court judgment went on to quote the Constitutional Court finding in Strategic Liquor Services v Mvumbi and Others (Case number…) by noting that that in this case it was held that “the test for constructive dismissal does not require that the employee should have no choice but to resign, but only that the employer should have made continued employment intolerable. Ultimately, the test remains whether it was reasonable to resign in order to escape the intolerable working environment”. In the Labour Court judgment regarding the employee who resigned due to the employer having allegedly unlawfully deducted the replacement cost of the laptop from his salary, the court held otherwise.
The Labour Court in this case emphasized the fact that the employee had resigned some 15 months after the deductions he was complaining of were effected. The Labour Court continued “also, as a senior Human Resources Manager with access to legal advice, he knew what recourse was available in a case of unlawful deduction”. The Labour Court also reiterated that “the employer may recover loss incurred due to the fault or negligence of an employee in terms of Section 34(2) of the Basic Conditions of Employment Act”.
The Labour Court found it “very opportunistic” of the employee “to use the incident that took place 15 months prior to the date of his resignation to support a case of constructive dismissal”. Unsurprisingly, the Labour Court held that there was no constructive dismissal, and that the employee had failed to prove that the employer had made his continued employment intolerable. Furthermore “the Commissioner evidently misconstrued the nature of the enquiry”.