Labour Court rules employee's resignation was constructive dismissal

THE Labour Court, sitting at the Western Cape High Court, has overturned an arbitrator's decision and ruled in favour of an employee who resigned due to “intolerable working conditions”.

The court awarded the former employee of a Gauteng-based debt collection company compensation exceeding R310,000, finding that the employer's actions — including abruptly terminating remote work arrangements and mishandling her medical leave — constituted constructive dismissal.

The Labour Court found that the commissioner’s award - which stated it was not constructive dismissal - could not stand, set the arbitration award aside, and further ordered that the Gauteng-based debt collection company for which the woman worked, to compensate her with the total amount of R310,571.19. 

During the 2020 lockdown, the employee requested remote work from Cape Town due to her son's acceptance at a prestigious school. The company agreed to her request, but a dispute arose regarding the permanency of her move.

The employee claimed she was allowed to permanently relocate to Cape Town due to her circumstances, but her employer viewed it as a temporary arrangement subject to operational needs.

The company assisted her with moving costs, providing an R80 000 budget for transport, accommodation, uniforms, and school expenses. According to the employee, this was indicative of an understanding that she was relocating to Cape Town permanently.

The employer, however, argued that it had merely used the woman’s bonus, at her request, and was not a relocation allowance. The company argued that at that time, it was feasible.

In 2023, the company lost several large clients, significantly reducing its monthly revenue. 

At an October 2023 meeting, the employer announced it was considering possible retrenchments.

At the same meeting, it was also decided to dissolve the exco and create a revenue committee, of which the employee did not form part.

The employee enquired if she would also be retrenched, to which she was informed that final lists were “still being considered”. In November 2023, the company announced it would cancel all remote work from January 1, 2024, and all employees were to return to the company's Randburg and KwaZulu-Natal offices as it needed “all hands on deck”. 

The employee requested an extension to March 2024 due to her circumstances, but it was denied.

Pursuant to this, and over a period of time, there was a breakdown in communication between the employee and the employer, which the employee described as her having been marginalised.

Among varying reasons for her resignation, a medical note from the employee is what Labour Court Judge Patrick MacKenzie said “broke the camel’s back”. 

On November 13, 2024, the employee visited a general practitioner due to feeling unwell and was booked off sick until December 23 for “anxiety and depression due to severe work-related issues”.

Her employer stated that without further information to justify her absence, it would be considered unauthorised and unpaid, and they reserved the right to take disciplinary action for alleged sick leave abuse.

In a letter to the company’s HR department, the employee wrote that she was “subjected to a pattern of harassment and victimisation by the management … characterised by constant criticism, bullying, insults, degrading accusations and unfair treatment, (which) commenced in October 2023”.

On November 30, 2023, the woman resigned immediately, citing intolerable working conditions as grounds for her constructive dismissal.

Judge MacKenzie said: “(The employer) knew the applicant was medically unwell, it was required to act within its own policies – to verify or record the absence appropriately – not to question her integrity or weaponise the sick-leave inquiry as disciplinary leverage. The employer’s failure to follow its own procedures, coupled with accusatory communication, constituted a breach of the implied term of mutual trust and confidence.

“(She) disclosed her illness in good faith; the (employer) turned that disclosure into an accusation. Compassion was replaced with confrontation, converting a medical issue into a disciplinary dispute.”

Cape Times