Majatladi v Metropolitan Health Risk Management and Others (C 798/12) [2013] ZALCCT 15 (5 June 2013)
(1) When an employee alleges constructive dismissal, that question goes to jurisdiction and the review test of 'reasonableness' set out in Sidumo does not apply. The court has to decide whether the commissioner was right or wrong in finding that there was no dismissal.
(2) The test for constructive dismissal is to look at the employer's conduct as a whole and determine whether its effect, judged reasonably and sensibly is such that the employee cannot be expected to put up with it. The test does not require that the employee has no choice but to resign, but only that the employer should have made continued employment intolerable.
(3) A unilateral change to an employment contract would be illegitimate where it amounts to a breach of contract as opposed to a mere change in work practices.
Facts:
Ms Majatladi, a medical doctor, resigned from Metropolitan Health Risk Management in April 2012 and claimed constructive dismissal. She had been employed by them since 2008. Having lost her case at arbitration, this was taken on review to the Labour Court.
In November 2011 a senior manager in another business unit resigned and Ms Majatladi agreed at short notice to act as head of that department whilst the recruitment process was underway. The parties signed a contract confirming that she would be seconded to this post in an acting capacity from 15 November 2011 to 31 January 2012, and she was paid an additional R10 000 per month as an acting allowance. Shortly before the end of this acting period, she e-mailed management advising them that she would not continue acting beyond this period and would be returning to her previous position. Management attempted to persuade her to continue in the acting position and stated that she would be fired if she did not do so. When she continued to refuse, she was suspended for 'refusing to obey a reasonable instruction' relating to her acting position and subjected to disciplinary proceedings. She then lodged a grievance about her suspension and pending disciplinary proceedings.
At her disciplinary hearing, Ms Majatladi was charged with gross insubordination, 'In that she refused to obey a reasonable instruction from the company to continue acting' and conduct unbecoming of a person with her status and position within the company, 'for the manner in which she had conducted herself'. She was found not guilty on the gross insubordination charge due to the acting agreement having a specific timeframe attached to it, with a specific start and end date, but guilty of the conduct unbecoming charge and given a final warning. Nothing came of her grievance application.
She unsuccessfully appealed against her final warning and her grievance was escalated to the chief executive officer, who later found that management had acted fairly. Despite the outcome of the disciplinary hearing, management continued to instruct her to act as HOD until the position has been filled and the required hand-over period has been successfully completed. She again refused and she was again suspended and subjected to disciplinary proceedings, despite the post by this stage being filled. Despite writing to the company complaining of continued harassment and victimisation, she received no assistance and resigned a day before the next disciplinary proceedings were due to commence.
On review, the Labour Court confirmed that when an employee alleges constructive dismissal, that question goes to jurisdiction and the review test of 'reasonableness' set out in Sidumo does not apply. The court has to decide whether the commissioner was right or wrong in finding that there was no dismissal. And the test for constructive dismissal is to look at the employer's conduct as a whole and determine whether its effect, judged reasonably and sensibly is such that the employee cannot be expected to put up with it. The test does not require that the employee has no choice but to resign, but only that the employer should have made continued employment intolerable.
The court found that the arbitrator was wrong in not finding that the employee had been constructively dismissed. Whilst criticising the employee for resigning before the further disciplinary hearing and not using that opportunity to present her case, the court stated that this was one of those exceptional cases "where the hearing was so obviously unfair that it amounted to the proverbial straw that broke the camel's back". The court found that the situation had become intolerable for the employee. She was again being charged with the very same allegation she had already been found not guilty of. On the facts of this case, the repeated instruction from management to continue in the acting position amounted to a unilateral change to her employment contract as opposed to a mere change in work practices, and this was a breach of contract and illegitimate.
The court awarded Ms Majatladi 6 months remuneration as compensation. The reason it didn't award the maximum compensation of 12 months appears to have been due to her resigning before the disciplinary hearing and not using that opportunity to present her case.
Extract from the judgment:
(STEENKAMP J)
The applicable test
[22] Where an employee alleges constructive dismissal in terms of s 186(1)(e) of the Labour Relations Act , the question is whether she was dismissed. That question goes to jurisdiction. Therefore, the reasonableness test set out in Sidumo does not apply. This court has to decide whether the commissioner was right or wrong in finding that there was no dismissal.
[23] As Mr Van Zyl, for Metropolitan, pointed out, this court recently summarised the case law pertaining to the test of intolerability in Asara. The test for determining whether or not an employee was constructively dismissed remains that set out in Pretoria Society for the Care of the Retarded v Loots . Although that case was decided under the 1956 LRA, the principles remain the same. In Loots, the court held that
"...the enquiry [is] whether the [employer], without reasonable and proper cause, conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the employer and employee. It is not necessary to show that the employer intended any repudiation of a contract: the court's function is to look at the employer's conduct as a whole and determine whether....its effect, judged reasonably and sensibly is such that the employee cannot be expected to put up with it".[24] The court held further that when an employee resigns or terminates the contract of employment as a result of constructive dismissal, such employee is in fact indicating that the situation has become so unbearable that the employee cannot fulfil her duties. The employee is in effect saying that she would have carried on working indefinitely had the unbearable situation not been created. She does so on the basis that she does not believe that the employer will ever reform or abandon the pattern of creating an unbearable work environment. If she is wrong in this assumption and the employer proves that her fears were unfounded, then she has not been constructively dismissed and her conduct proves that she has in fact resigned.
[25] The Constitutional Court recently remarked in Strategic Liquor Services v Mvumbi NO & others that the test for constructive dismissal does not require that the employee have no choice but to resign, but only that the employer should have made continued employment intolerable.
Evaluation / Analysis
[26] In most cases, the fact that an employee resigned on the eve of a disciplinary hearing would make it very difficult for that employee to prove constructive dismissal, as this court pointed out in Asara
[27] In the current case, the applicant argues that the company had made their continued employment relationship intolerable, and that the pattern of coercion and victimisation culminated in the second disciplinary hearing.
[28] It is certainly noteworthy that the company purported to charge the applicant with the very same allegation of misconduct on which she had been found "not guilty" previously, i.e. "gross insubordination". The substance of the charge is the same, albeit arising from a second instruction to continue acting in the vacant position.
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[31] In this case, the parties did enter into a valid and binding contract. As the applicant pointed out in her email to Ramsingh, there was a meeting of the minds - albeit with reservations on her part - with regard to the temporary contract from 15 November 2011 to 31 January 2011. At no time did she agree to extend the agreement beyond that time period; and when asked to, she made it clear that she would not. It is only then that the company "instructed" her to do so; and when she refused, it accused her of gross insubordination.
[32] Mr Ackermann, for the applicant, submitted that this instruction - contrary to the terms of the initial agreement - amounted to a unilateral variation of the contract. He correctly submitted that it is a question of fact to determine whether there has been a unilateral variation that amounts to a breach. With reference to Johannesburg Metropolitan Bus Services (Pty) Ltd v SAMWU he pointed out that a unilateral change would be illegitimate where it amounts to a breach of contract as opposed to a mere change in work practices.
[33] In this case, the duties pertaining to the HOD position were very different to those the applicant carried out in her permanent position. In requiring her to fulfil those duties, Metropolitan did not merely introduce a change in a work practice; it required of her to do a different job, albeit for a limited time. It (properly) sought and obtained her consent to do so until 31 January 2012. Beyond that, requiring of her to continue in the acting position amounted to a breach of contract.
[34] The terms of the contract were clear. It expired on 31 January 2012. The arbitrator correctly records that fact: "The sequence of events shows that clearly an initial contract was entered into and performance was concluded when the period expired." And yet, in the same paragraph, the arbitrator makes a u-turn and finds that the applicant had to obey the instruction to continue acting in that position because of the "operational requirements" of the business. That finding is irrational.
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[44] The situation had indeed become intolerable, as set out in the sequence of events above. It is clear that this was mainly of the employer's making. The applicant did, at least initially, attempt to come to the assistance of her employer. She reluctantly agreed to act in the HOD position, even though it was a much bigger job with far greater responsibilities, and she had reservations about doing it. But this was meant to be a short-term solution; the employer was meant to go on an urgent recruitment drive and to appoint someone else. It took almost five months to do so. And even then, it still instructed the applicant to report in a position that had already been filled.
[45] The employer went further. Its human resources personnel attempted to pressurise the applicant - they came very close to threatening her. She was told to consider her career; the clear message being that she was in danger of losing her job and that she would find it difficult to find similar employment in what is a small industry.
[46] The facts of this case are akin to those in Murray v Minister of Defence where the Supreme Court of Appeal dealt with constructive dismissal. In that case, after having regard to the way that the SA Navy had dealt with the employee, Cameron JA came to the following conclusion:
"But one must counter the sense that the Navy has been found wanting against an intangible and unpredictable standard by positing that it is hard to avoid the impression, at the end of all the evidence and memoranda and letters and pleadings, that the [employee] was hard done by."[47] In the case before me, it is also hard to avoid that impression. The applicant fulfilled her duties in terms of the initial temporary contract. She made it clear that she was not willing to continue in that position after the contract had expired. In attempting to force her to do otherwise, Metropolitan acted unfairly.
[48] I am persuaded that, on the facts of this case, the employer was responsible for making the continued working relationship intolerable; and that it was culpably responsible. In coming to the contrary conclusion, the arbitrator, in my view, misapplied the law to the facts of this case.