Constructive dismissal is often misunderstood by both employers and employees. Unlike a conventional dismissal, the employer does not expressly terminate the employment relationship. Instead, the employee resigns, alleging that the employer's conduct, or failure to act, made continued employment so intolerable that resignation became the only reasonable option.

Section 186(1)(e) of the Labour Relations Act recognises this principle by providing that a dismissal occurs where an employee terminates the employment contract, with or without notice, because the employer made continued employment intolerable.

Although constructive dismissal claims remain among the most difficult dismissal disputes for employees to prove, they present significant risks for employers who fail to address workplace grievances, conflict or inappropriate management practices. Understanding the legal requirements and responding appropriately to employee concerns remain essential to reducing this risk.

The Facts

From an employer's perspective, the resignation itself is seldom the primary issue. The real question is whether the employer's conduct left the employee with no reasonable alternative other than to resign.

The enquiry is objective. It is not sufficient that an employee merely believes the working environment has become unpleasant or unfair. The court or arbitrator must determine whether the employer created, permitted or failed to address working conditions that had become so intolerable that resignation was effectively the employee's only viable option.

Accordingly, employers should recognise that constructive dismissal disputes often arise not from a single incident, but from an ongoing failure to deal appropriately with workplace concerns before they escalate.

Legal Framework

The starting point is section 186(1)(e) of the Labour Relations Act, which extends the definition of dismissal to include circumstances where an employee resigns because the employer has made continued employment intolerable.

Where constructive dismissal is alleged, the employee bears the initial burden of proving that a dismissal, as contemplated by the Act, has occurred. Only once this jurisdictional hurdle has been crossed does the employer bear the responsibility of demonstrating that the termination was fair.

The legal test focuses on whether the employer's conduct, viewed objectively, rendered the continuation of the employment relationship intolerable. Importantly, liability may arise not only from positive acts by the employer but equally from a failure to act reasonably when workplace concerns, complaints or grievances are brought to its attention.

Case Law

The Constitutional Court reaffirmed these principles in Maleka v Boyce NO and Others (CCT 175/23) [2026] ZACC 7, where it confirmed that three jurisdictional requirements must be established before constructive dismissal can be found:

• the employee resigned;
• the resignation resulted from intolerable working conditions; and
• those intolerable conditions were caused by the employer.

The Court further confirmed that employers will generally avoid liability where they can demonstrate that they responded reasonably to employee complaints, investigated grievances properly, attempted to resolve workplace disputes and acted fairly throughout the process.

The judgment serves as an important reminder that constructive dismissal claims frequently turn on the employer's response to workplace problems rather than the existence of conflict itself.

Application to Employers

Constructive dismissal claims often arise where employees believe their concerns have been ignored rather than addressed.

Examples include situations where employers fail to investigate grievances, tolerate bullying or harassment, isolate employees from the workplace, or permit conduct that is humiliating, retaliatory or oppressive. In these circumstances, the employer's failure to intervene may ultimately become more significant than the original workplace dispute.

Conversely, employers place themselves in a far stronger position where they can demonstrate that complaints were taken seriously, investigations were conducted, reasonable solutions were explored, and genuine efforts were made to preserve the employment relationship.

Ultimately, the objective is not simply to prove that management acted lawfully, but that it acted reasonably and in good faith.

Practical Steps for Employers

Employers can significantly reduce the risk of constructive dismissal claims by implementing proactive workplace management practices. In particular, employers should:

• Maintain clear grievance, disciplinary and performance management procedures that are consistently applied throughout the organisation.
• Investigate complaints promptly and provide employees with meaningful opportunities to raise concerns.
• Keep comprehensive records of grievances, meetings, investigations, warnings, proposed solutions and management interventions.
• Train managers and supervisors to recognise workplace conflict early and respond appropriately.
• Consider mediation or other dispute-resolution mechanisms where relationships begin to deteriorate.
• Demonstrate a genuine commitment to resolving workplace issues before an employee feels compelled to resign.

Taking these steps not only assists in defending future litigation but also promotes healthier and more productive workplace relationships.

Key Takeaways / Conclusion

Constructive dismissal remains one of the most difficult dismissal claims for employees to establish because the legal threshold of intolerability is high. Nevertheless, employers who ignore grievances, fail to investigate workplace concerns or allow unreasonable conditions to continue may expose themselves to significant legal liability.

The Constitutional Court's judgment in Maleka reinforces that constructive dismissal cases are ultimately concerned with whether the employer acted reasonably when faced with workplace conflict. Employers who investigate complaints promptly, engage constructively with employees, document every stage of the process and genuinely attempt to preserve the employment relationship are far better positioned to defend these claims successfully.

In practice, constructive dismissal is rarely about the resignation itself. More often, it is about whether the employer did enough to prevent the resignation from becoming the employee's only reasonable option.

Issued by CEO SA