Constructive Dismissal: When a Resignation Is Really a Dismissal

Constructive dismissal is the claim employers never see coming: the employee resigned — there is a resignation letter and everything — and yet here is a CCMA referral for unfair dismissal. Section 186(1)(e) of the LRA says a dismissal includes a resignation where ‘the employer made continued employment intolerable’. This guide explains the test, the triggers, and how to keep your business out of this particular trap.

The constructive dismissal test: three things the employee must prove

At the CCMA, the employee claiming constructive dismissal carries the onus — and must establish all three elements. First, that they resigned (voluntarily in form). Second, that continued employment had become intolerable — not merely unpleasant, unfair or stressful, but objectively intolerable: no reasonable employee could be expected to stay. Third, that the employer created the intolerability — the conditions flowed from the employer’s conduct, not from the employee’s own circumstances or preferences.

The employer conduct that triggers constructive dismissal claims

• Unilateral changes: pay cuts, demotions, stripped responsibilities or relocated work imposed without agreement.
• The squeeze play: impossible targets, removed tools or support, set-up-to-fail assignments designed to force a resignation.
• Sustained humiliation: public berating, belittling, exclusion, or harassment the employer tolerates or performs.
• Ignored grievances: serious complaints — harassment, safety, non-payment — formally raised and repeatedly ignored.
• The ultimatum: ‘resign by Friday or we fire you’ — a resignation under that pressure is a dismissal wearing a resignation’s clothes.
• Non-payment or late payment of salary: perhaps the cleanest intolerability argument of all.

Notice the pattern: every trigger is the employer avoiding a process. The pay cut instead of consultation, the misery campaign instead of a performance plan, the ultimatum instead of a hearing. Constructive dismissal is, more than anything, the tax on shortcut people-management.

One more trigger deserves its own warning: changing the job after recruitment. The employee hired as a bookkeeper who is reassigned to cold-call sales, or the office administrator relocated to a depot forty kilometres away, has a straightforward intolerability argument when the change is imposed rather than agreed. Job descriptions matter here — they define what the employer may reasonably ask, and how far it may stretch the role before consent is required.

Prevention: manage the problem, not the exit

If an employee resigns in anger citing intolerable conditions, treat it as a legal event: respond in writing, address the grievance, and keep the record. Some resignations are genuine; the response costs nothing and distinguishes the two. The full framework is in the discipline and dismissal pillar.

Frequently asked questions

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