When is Resignation a Constructive Dismissal?

When is Resignation a Constructive Dismissal?

“…the prospect of continued employment must be shown to have been objectively intolerable and the employee must have resigned due to the intolerable situation and not for another reason.” (Extract from judgment below)

Perhaps you are an employer, and that troublesome employee who you’ve been hoping would resign does exactly that. Saving you, as you see it, from the risk, hassle, and expense of disciplinary or retrenchment proceedings. But are you really home and dry?

Or perhaps you are an employee, driven to resign by your employer’s constant maneuvering to make your continued employment unbearable. Do you have any recourse?

The answer to both questions lies in the Labour Relations Act’s definition of “dismissal”, which includes an employee resignation when “an employee terminated employment with or without notice because the employer made continued employment intolerable for the employee.”

And when there’s a dismissal, it has to be a fair one or the employer is in for a very expensive lesson. As we shall see …

The three requirements for “constructive dismissal”?

As confirmed in the Labour Court judgment we discuss below, there are three requirements for constructive dismissal to be established, all three of which must be proved by the employee –

  1. The employee must have terminated the contract of employment, and 
  2. The reason for termination of the contract must be that continued employment has become intolerable for the employee, and
  3. It must have been the employee’s employer who had made continued employment intolerable.

Note that there is no constructive dismissal if an employee resigns for any other reason, for example “because he cannot stand working in a particular workplace or for a certain company and that is not due to any conduct on the part of the employer.”

And a test for “intolerability”

“Intolerability”, said the Court, “is a high threshold, far more than just a difficult, unpleasant or stressful working environment or employment conditions, or for that matter an obnoxious, rude and uncompromising superior who may treat employees badly. Put otherwise, intolerability entails an unendurable or agonising circumstance marked by the conduct of the employer that must have brought the employee’s tolerance to a breaking point.”

The case of the specialist fraud and risk investigator in a bullet proof vest
  • A specialist fraud and risk investigator resigned from his employment with a bank after 17 years’ service, then successfully referred an unfair dismissal dispute to the CCMA (Commission for Conciliation, Mediation and Arbitration), claiming constructive dismissal.
  • Suffering health problems and involved in high-risk investigatory work which put his physical security at risk (hence no doubt his wearing a bullet-proof vest), he claimed to have been subjected to ongoing victimisation, bullying and harassment. His complaints included grievance disputes not being attended to, refusal of compassionate leave, poor work performance assessments, disciplinary and incapacity proceedings – the list goes on.
  • Finding on the facts that there was “an accretion of conduct creating an increasingly oppressive work relationship for [the employee], with no functioning mechanism available to halt the deterioration”, the Court held that the employer had made the employment relationship intolerable. The employee was entitled to regard his resignation as a constructive dismissal and, that dismissal being an unfair one, the Court confirmed the CCMA’s compensation award of ten months’ remuneration.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Effective 1 March 2024: New National Minimum Wage

Effective 1 March 2024: New National Minimum Wage

The National Minimum Wage (NMW) for each “ordinary hour worked” has been increased from 1 March 2024 by 8.5% from R25-42 to R27-58.

Domestic Workers: Assuming a work month of 21 days x 8 hours per day, R27-58 per hour equates to R220-64 per day or R4,633-44 per month. The Living Wage calculator will help you check whether or not you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up to date).

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

You Can (and Should) Both Discipline and Prosecute Thieving Employees

You Can (and Should) Both Discipline and Prosecute Thieving Employees

“It’s the profile of the most trusted individual, in a position of trust, like an accountant or bookkeeper. They usually never take leave, and someone who never allows anyone access to their system would go to the length of taking their laptops with them while they are on holiday so that they can continue working. They are usually caught in the moment of forced absence from work.” (Specialised Commercial Crimes Court as reported by News24)

Our courts report a surge in serious cases of theft from employers by their most trusted employees – often bookkeepers and accountants. The greater the trust placed in these dishonest individuals, the more they steal and the longer they get away with it.

Particularly in more serious cases, employers should lay criminal charges as well as instituting disciplinary proceedings. Criminal courts are imposing hefty deterrent sentences, and the Labour Court has confirmed that laying charges does not prejudice the simultaneous disciplinary process.

Minimum sentences apply

Firstly, minimum sentencing provisions apply when large amounts have been stolen. Even first offenders must be sentenced to a minimum of 15 years’ imprisonment for any fraud or theft involving more than R500,000 (R100,000 for persons acting together or R10,000 for law enforcement officers) unless “substantial and compelling circumstances exist which justify the imposition of a lesser sentence”.

Let’s look at some recent cases –

  • 50 years for a R537m theft: Over some two decades of employment in a position of trust as an accountant, an employee admitted to 336 counts relating to thefts totalling an astonishing R537m. She had tried to cover up with fraudulent VAT claims and although her lavish lifestyle (she spent R5m on one specific day) attracted attention, it seems that it was only an anonymous tip off that eventually led to her detection and arrest. She was sentenced by a Specialised Commercial Crimes Court (SCCC) to 50 years behind bars.
  • 10 years for a R13.4m fraud: A creditor’s clerk, once again in a position of trust, pleaded guilty to 972 counts of fraud totalling over R13.4m and stretching over 9 years, only discovered when she went on sick leave. The mitigating factors in her case (she has health issues and is 65 years old) led the High Court to reduce her 15-year sentence to a below-the-minimum 10 years.
  • 18 years for a R14m theft: A financial manager stole over R14m, leaving the couple who had trusted him with their finances without their life savings (including a cancer diagnosis payout) and on their knees financially and emotionally. The Court’s sentence of 3 years more than the minimum reflected its finding that the aggravating factors justified removing the manager from society, despite his gambling addiction and previous clean record.
  • 15 to 30 years for a R52m fraud? A trusted store accountant “viewed as a brother” by its traumatised owners (one of whom even contemplated suicide), admitted to two counts of fraud totalling R52m as a result of his gambling addiction. He will only be sentenced in March, but it seems from media reports that he is unlikely to receive less than the minimum 15 years’ imprisonment per count, possibly to run concurrently.
The Labour Court confirms you can do both

A municipal manager with 15 years’ service was criminally charged with very serious frauds. He asked the Labour Court to stop his employer’s disciplinary process against him, arguing that in defending himself at the disciplinary hearing he might have to give self-incriminating evidence.

The Labour Court disagreed, finding that the employee had several layers of protection available to him in the criminal trial, and clearing the employer to proceed with the disciplinary hearing simultaneously. In fact, said the Court, “It is tantamount to an abuse of court process by a person holding a managerial position using court processes to prevent his employer from subjecting him to a disciplinary process under the guise of protecting his constitutional rights.” It accordingly ordered him to pay all costs on the punitive attorney and client scale – a very unusual censure in labour law matters where both sides are normally left to cover their own costs.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Moonlighting Without Consent is Misconduct – A Firing Offence

Moonlighting Without Consent is Misconduct – A Firing Offence

“…moonlighting as a matter of principle is unacceptable…” (extract from judgment)

Up to a quarter of all middle-class South Africans are reported to “moonlight”, that is to run a part-time side hustle or side business in addition to their full-time jobs. Some, it seems, go one step further and manage to hold down two full-time jobs simultaneously. No doubt the pandemic-accelerated increase in remote working has enabled that trend as much as financial pressures on employees have fuelled it.

But, as the Labour Court has once again confirmed, moonlighting without permission risks instant dismissal.

“Juggling two jobs” leads to dismissal after an anonymous tip off
  • A “highly qualified and academic” employee held down two part-time lecturing jobs, one with a university. The university had consented to this arrangement, so all was well at that stage.
  • However, she thereafter elected to resign from her second part-time job and to take up full-time employment as a lecturer “in a senior position of trust and responsibility” with the university at an annual salary package of R787,520. Almost immediately after that she took on another full-time job as an accounts director at a data consultancy, this time at an annual salary of R1,100,004. Critically, this time she did so without seeking the university’s authority to do so.
  • We will never know whether or not the employee might perhaps have got away with juggling these two full-time jobs for any length of time, because after only a month an anonymous tip-off put an abrupt end to her scheme.
  • The university convened a disciplinary hearing and she was dismissed after being found guilty of gross misconduct for taking up a second full-time position without the university’s knowledge or authority, in breach of her duty of good faith to the university and of its “Policy on the Declaration of Interests”.
  • She referred the matter to the CCMA (Commission for Conciliation, Mediation and Arbitration) which held her dismissal to have been both substantively and procedurally fair – which decision she referred to the Labour Court on review.
  • Unimpressed with the employee’s defence that she could manage the two positions, that she did not think it would prejudice the university, and that she saw no conflict of interest, the Court agreed that she had been guilty of “extremely serious misconduct” and upheld her dismissal.
  • Rubbing salt into her wounds, the Court ordered her to pay the university’s legal costs (unusual in labour law matters).
Moonlighting – a breach of duty and good faith

The Court’s findings apply to all employment contracts, even those without specific moonlighting policies in place, because of the breach of trust inherent in unauthorised moonlighting. To quote the Court in bullet point form –

  • “In simple terms, moonlighting as a matter of principle is unacceptable, and a breach of an employee’s fiduciary duties towards the employer.
  • It must always be the sole prerogative of an employer to decide whether to allow this to take place, and also on what terms it may be allowed.
  • Nothing can be assumed by the employee. That is why it has to be critical that full disclosure be made by the employee to the employer beforehand, so the employer can exercise its prerogative in an informed manner.”
  • To make disclosure to an employer after the fact effectively confronts the employer with a fait accompli, and cannot undo the breach of the duty of good faith that has already taken place.”
Is dismissal always appropriate?

To quote the Court again: “It would in my view be difficult for an employer to re employ an employee who has shown no remorse. Acknowledgment of wrongdoing is the first step towards rehabilitation. In the absence of a recommitment to the employer’s workplace values, an employee cannot hope to re-establish the trust which he himself has broken. Where, as in this case, an employee, over and above having committed an act of dishonesty, falsely denies having done so, an employer would, particularly where a high degree of trust is reposed in an employee, be legitimately entitled to say to itself that the risk of continuing to employ the offender is unacceptably great.”

In this case the employee’s consistent denials of wrongdoing left the university, said the Court, with no alternative but to terminate her employment. But clearly dismissal will not automatically be appropriate in all cases, particularly where it is possible to re-establish trust in a case of genuine remorse. Every case will be different and specific legal advice is essential.

Consistency is critical

Employers need to be able to justify any inconsistency in approach to similar misconduct by other employees. In this case the employee’s “consistency challenge” was groundless and rejected, but it will always be a factor in assessing whether or not dismissal is appropriate.

A final note for employees

If you need or want to earn some extra cash on the side, tell your employer and get prior consent (in writing). Or risk dismissal.

And a final note for employers

Follow the principles set out above and think of putting something into your employment contracts to cover all possible “conflict of interest” situations including moonlighting. With the complexity of our labour laws and the downsides of getting it wrong, specific legal advice is essential.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

The New Law on Parental Leave – A Simple Summary for Employers and Employees

The New Law on Parental Leave – A Simple Summary for Employers and Employees

“The crux of the case is about unequal treatment of persons. (Extract from judgment below)

The recent High Court judgment which declared unconstitutional differences between maternity, paternity, parental, adoption and surrogacy leave has received a lot of media attention, much of it focusing on the reasons for the decision – but what has actually changed on a practical level for employers and their employees?

In summary, the Court has given Parliament two years to remedy those sections of two Acts – the BCEA or Basic Conditions of Employment Act and the UIF Act – that discriminate unfairly between mothers and fathers and between different sets of parents on the basis of whether a child was born of the mother, conceived by surrogacy or adopted.

Employers and employees – what you need to know

The matter now goes to the Constitutional Court for confirmation of the declaration of invalidity and of the Court’s interim order that “…all parents of whatever stripe, enjoy 4 consecutive months’ parental leave, collectively. In other words, each pair of parents of a qualifying child shall share the 4 months leave as they elect.”

To break that down, all parents (regardless of gender or category) will, subject to confirmation by the Constitutional Court, be entitled to at least four consecutive months’ leave – what until now has been described in the BCEA as “maternity leave”.

To break that down simply –

  • Single parents of any gender will be entitled to the full four months’ leave.
  • A pair of parents will be entitled to the same leave, but they must share it between them They can choose how to take the leave – either one of them can take the whole period, or they can take turns taking leave. Both parents’ employers must, before the child’s birth, be notified in writing of the parents’ decision and of the periods to be taken by each parent.
  • Adoptive parents will be entitled to the same leave when adopting children under two years of age.
  • Surrogacy – the same leave will be available to a commissioning parent or parents (a “commissioning parent” is a person who enters into a surrogate motherhood agreement with a surrogate mother).
If it’s unpaid leave, a UIF claim may help…

The BCEA provides job security by obliging employers to grant parental leave rather than lay off new parents, but it does not force employers to make it paid leave. It will be unpaid unless your particular contract of employment specifies that it will be paid.

That’s where the UIF (Unemployment Insurance Fund) comes in, with its provision of “maternity benefit” claims. These will be available to all qualifying parents who are contributors to UIF.

Employers – take advice on how to update your leave policies to comply with these anticipated new provisions.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Did You Know that CV Liars Now Face Jail Time?

Did You Know that CV Liars Now Face Jail Time?

“Fraud is a cancer that is crippling our country” (Supreme Court of Appeal in 2019)

An all-too-common scenario in these times of high unemployment is job applicants who, desperate to be hired, lie about their qualifications on their CVs. Recent high-profile stories of fake doctors and the like are no doubt only the tip of the iceberg when it comes to this growing problem.

And of course, the consequences for any business hiring such a candidate can be extremely serious. You face loss of reputation, loss of clients, dangerous workplaces where safety issues are at stake, and potential liability for any damage caused by the under-qualified employee.

The new offences

But there is help at hand! All employers, employees and jobseekers need to know that anyone lying about their qualifications now faces heavy fines and up to 5 years’ imprisonment.

That’s in terms of the newly operational National Qualifications Framework Amendment Act, which makes it a criminal offence to “falsely or fraudulently” claim to be holding a qualification or part-qualification from any educational or skills development provider, including a foreign institution. Fraudulent claims needn’t necessarily be in the form of a CV – any deliberate “falsification and dissemination or publication” of false qualifications is now criminalized, so posting fake matric certificates or degrees on social media for example would now be a criminal offence.

What you should do as an employer
  • If a job seeker lies

    Of course, prevention is always better than cure, do your due diligence upfront – verify all qualifications claimed, speak personally to references, query inconsistencies or gaps in CVs and so on.

    You naturally won’t hire an applicant who turns out to be a liar but think of going one step further – lay criminal charges! It may seem overkill but the applicant has put your business at risk just by claiming the false qualification, and the best protection you can have from future attempts to defraud you in this way is to build a reputation for taking firm action against cheats.

  • If an existing employee lies

    If on the other hand you find out that an existing employee has been guilty of CV fraud, either to get the job initially or to qualify for a benefit such as a promotion, you have a range of options available to you –

    • Lay charges: Send out a clear message: “Don’t mess with us!” by pursuing criminal charges, either as above if it’s qualification fraud or under our general criminal laws for other types of fraud. A recent example is provided by the case of a fake radiographer who misrepresented her qualification to get employment and has been sentenced to 2,000 hours’ periodical imprisonment.
    • Disciplinary action: You should also consider disciplinary action against the employee, with dismissal a distinct possibility in appropriate cases. Note that specific legal advice is essential here to get it right.
    • Claim damages: You may well also have a claim against employees for any losses flowing from their fraud. For example, the High Court recently ordered an employee who had claimed to hold what turned out to be a fake degree to repay everything he had earned back to his employer – over R2.2m. Moreover, the Court authorised the employer to execute against the employee’s provident fund, and that’s really going to hurt the fraudster’s retirement plans. Note that pension and provident funds are normally protected from creditors but not from claims for “any damage caused to the employer by reason of any theft, dishonesty, fraud or misconduct”. As a final mark of its displeasure, the Court ordered the employee to pay costs on the punitive attorney and client scale.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

You have Successfully Subscribed!