Constructive dismissal referrals – how soon is too soon?

In terms of the Labour Relations Act, No 66 of 1995 (LRA) 'dismissal' includes a scenario where "an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee." Such a resignation is known as a constructive dismissal and is specifically catered for in s186(1)(e) of the LRA. Due to the role reversal – with the employee resigning and it nevertheless being considered a dismissal – the following question arises: Is the effective date of the dismissal the date of the employee's resignation or the date that the employee's notice period comes to an end?

In Helderberg International Importers (Pty) Ltd v McGahey NO and Others [2015] 4 BLLR 430 (LC) (Helderberg), the Labour Court dealt with this exact question. An employee resigned (subject to one month's notice) on 31 August 2013 and referred a constructive dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) on 26 September 2013. In terms of his notice period, the employee continued to tender his services until 30 September 2013.

At arbitration, the employer argued that the referral had been served prematurely, prior to the effective date of dismissal. The commissioner found in favour of the employee, ruling that the date of resignation (31 August 2013) was the dismissal date. Thus, the commissioner treated the 'termination' as the date of resignation, rather than the date when the employee's services ceased.

On review, the Labour Court first assessed the applicability of s190(1) of the LRA to the case. This provision defines the date of dismissal as the earlier of 'the date on which the contract of employment terminated' or 'the date on which the employee left the service of the employer'. In terms of the Labour Relations Amendment Bill, 2000 Explanatory Memorandum, s190(1) was amended in order to clarify the date of dismissal as the date on which 'the final decision to dismiss an employee was made'. With this in mind, the Labour Court held that s190(1) cannot apply to a constructive dismissal as in a constructive dismissal as, in such a case, it is the employee who makes the final decision to terminate their employment.

The Labour Court held that the termination date in a constructive dismissal is the date on which the employee leaves the services of the employer. In this case, the employee tendered his services until the end of the notice period (30 September 2013), thus had been no dismissal by the referral date (26 September 2013). The Labour Court thus found that the employee's referral to the CCMA was premature.

It should be noted that the situation is different where the employer does not require the employee to work out their notice period. Here the date of dismissal will be considered the date on which the employee's services cease and a referral to the CCMA within the notice period will not be considered premature (Chabeli v Commission for Conciliation, Mediation & Arbitration & Others (2010) 31 ILJ 1343 (LC)).

What an employer should take from this case is that, firstly, s190 has no application to constructive dismissal disputes. Furthermore, if an employee works until the end of their notice period, the employment relationship will only terminate at the end of such a notice period. Prior to that date, no dismissal will have occurred yet. However, should an employee not be required to work out their notice period, the date of dismissal under s186(1)(e) will be the date on which the employee stops providing their services to the employer.