Brief Summary

Constructive dismissal — Employee suffering from severe depression and anxiety due to employer's actions — Employee's subordinate appointed to acting position without consultation — Employee's resignation claimed as constructive dismissal — Commissioner finding in favour of employee — Appeal against finding of constructive dismissal — Onus on employee to prove intolerable employment conditions restated — Employer's failure to provide fair treatment and support during employee's illness rendered employment relationship unbearable — Commissioner’s decision upheld, appeal dismissed with costs.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an appeal to the Labour Appeal Court against a judgment of the Labour Court which had dismissed, with costs, an application to review and set aside an arbitration award issued under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA).

The appellant was the National Health Laboratory Service (NHLS). The first respondent was Ms Mandisa Yona, a former employee of the NHLS. The second respondent was the CCMA commissioner (Mr Feizal Fataar N.O.) who had issued the arbitration award. The third respondent was the CCMA.

Procedurally, Ms Yona referred two disputes to the CCMA: an unfair labour practice dispute (relating to non-promotion) and a constructive dismissal dispute. The commissioner found for the NHLS on the unfair labour practice dispute, but found for Ms Yona on the constructive dismissal dispute and awarded compensation. The NHLS then brought a review application in the Labour Court in terms of section 145 of the Labour Relations Act 66 of 1995 (LRA) against the constructive dismissal finding only. The Labour Court dismissed that review application. Leave to appeal was refused by the Labour Court but granted on petition by the Labour Appeal Court.

The general subject-matter of the dispute was whether Ms Yona’s resignation, in circumstances involving prolonged illness and the employer’s treatment of her sick leave and income during that period, constituted a constructive dismissal as defined in section 186(1)(e) of the LRA, and whether the commissioner’s award upholding that claim was reviewable for unreasonableness.

2. Material Facts

Ms Yona had been employed by the NHLS for a broken service totalling 21 years, with her later period of service commencing on 1 May 1995. At the time relevant to the constructive dismissal dispute, she was employed as Complex Laboratory Manager at the NHLS’s Port Elizabeth branch, earning R34 000 per month, and she resigned on 1 June 2010, giving notice to 30 June 2010.

It was common cause that Ms Yona reported to a Business Unit Manager (Business Manager). It was also not in dispute that she had previously acted in the Business Manager position when the incumbent (Mr Patrick Lucwaba) was temporarily unavailable. During 2009 Mr Lucwaba was promoted, leaving the Business Manager post vacant. At a staff meeting on or about 4 May 2009, Mr Lucwaba announced that he had appointed Mr Igshaan Gamieldien, a junior manager reporting to Ms Yona, to act as Business Manager pending a permanent appointment.

Ms Yona was aggrieved by this acting appointment. She pursued an internal grievance which resulted in an outcome that Mr Lucwaba should apologise to her for not consulting with her, while the acting appointment of Mr Gamieldien was endorsed. It was significant for the later narrative that Mr Lucwaba did not apologise, explaining that he regarded the appointment as within his prerogative and saw no obligation to consult.

In or about July 2009 the NHLS advertised the permanent Business Manager position. Both Ms Yona and Mr Gamieldien applied, and both were unsuccessful, being informed by letters dated 20 August 2009. Ms Yona further complained (and the judgment treated the complaint as part of the background) that the HR Manager, Mr James Abraham, discussed interview outcomes in a manner that she experienced as humiliating. The successful candidate (Mr Pascal Karuhige) later declined the appointment, and Mr Gamieldien’s acting appointment was extended, which intensified Ms Yona’s frustration.

From approximately 9 November 2009, Ms Yona was continuously absent from work due to illness for about five months until the end of May 2010. The court treated as material the fact that her absences were covered by medical certificates, initially from a general practitioner and thereafter from a psychiatrist, Dr Jan Taylor, reflecting a diagnosis of severe depression and generalised anxiety disorder. The judgment further treated as material that she submitted successive medical certificates to cover the entire period.

A central factual issue concerned the employer’s handling of communication and leave management during this absence. Mr Abraham sent a letter on 17 February 2010 stating, among other things, that Ms Yona had not made telephonic contact with her manager about her absence; that her absence had been processed as “absence without leave”; and that she had exhausted leave. In that same letter he requested her to complete an application for disability (temporary disability) and return it by a specified date.

It was common cause that Ms Yona completed and submitted the temporary disability forms. On 19 April 2010, Mr Abraham sent a further letter advising that the temporary incapacity/disability application was not approved by the insurers (Alexander Forbes) and stating that “extended sick leave” was not an option and that the decision to process her absence as unpaid leave remained in force.

By May 2010 Ms Yona discovered that, due to deductions for unpaid leave, her net pay for that month was approximately R1 000. The court treated as material her evidence that she found this unbearable and resigned while still on sick leave to access provident fund monies. In her resignation letter she referred to the “treatment” she had endured during her illness.

The judgment also treated as material the commissioner’s factual findings regarding Mr Abraham’s letters. The commissioner found that Mr Abraham’s assertions about a lack of communication were false or unjustified in circumstances where medical certificates had been furnished, and that he failed to draw her attention to the NHLS policy on extended sick leave.

3. Legal Issues

The central legal questions were whether, on an objective assessment, Ms Yona discharged the onus of proving that she resigned because the NHLS made continued employment intolerable as contemplated by section 186(1)(e) of the LRA, and whether the commissioner’s conclusion that she had been constructively dismissed was one that a reasonable decision-maker could reach on the material before him.

The dispute in the Labour Appeal Court was not a fresh determination of the merits, but a question of review reasonableness under section 145 of the LRA, as formulated in the constitutional standard of reasonableness. It therefore concerned the application of law to fact: the application of constructive dismissal principles and the review threshold to the evidentiary material and findings in the arbitration record.

Embedded within this were further questions the court treated as relevant to the reasonableness enquiry: whether Ms Yona’s mental illness and resignation were causally linked to the acting appointment dispute as opposed to the employer’s treatment of her during sick leave; whether she ought, as a senior manager, to have taken steps without HR’s assistance; and whether the employer’s sick leave policy required separate applications for temporary disability and extended sick leave.

4. Court’s Reasoning

The Labour Appeal Court approached the appeal through the lens of the review standard applicable to arbitration awards. It restated that an award is reviewable only if it falls outside the range of decisions that a reasonable decision-maker could make on the material before the commissioner, and it relied on authority emphasising that factual errors or disputes about weight are not sufficient unless they render the outcome unreasonable.

Turning to constructive dismissal, the court relied on the statutory definition in section 186(1)(e) of the LRA and reaffirmed that the onus rests on the employee to prove that resignation was not truly voluntary, and that the employer’s conduct, viewed objectively and cumulatively, destroyed or seriously damaged the relationship of confidence and trust so that continued employment could not reasonably be expected. The court emphasised that constructive dismissal is a factual enquiry grounded in an objective assessment of the employer’s conduct as a whole, rather than the employer’s subjective intention.

On the facts, the court accepted that the origin of Ms Yona’s illness was linked to the acting appointment of her junior, and it expressly stated that the employer was entitled to appoint an acting Business Manager and that Ms Yona had no vested right to be appointed. The court therefore treated the acting appointment dispute as not dispositive of constructive dismissal. It also noted that she did not resign immediately after the acting appointment; her resignation occurred over a year later, supporting the conclusion that the direct trigger for resignation was the later handling of her illness-related absence and remuneration.

The court then focused on the employer’s conduct during Ms Yona’s illness, particularly the role of Mr Abraham as HR Manager. It rejected the submission that Ms Yona had been advised to apply for extended sick leave, finding that this was contradicted by the objective content of Mr Abraham’s letters, which (in February 2010) referred to temporary disability and (in April 2010) stated that extended sick leave was “not an option.” The court considered this consistent with the commissioner’s view that the employer failed to properly assist her.

The court further held that the argument that Ms Yona should have navigated the policy without HR support was unsustainable in context. It treated as decisive the fact that Ms Yona was suffering from a serious work-related mental illness at the time and was in need of assistance, and it reasoned that Mr Abraham’s selective explanation (temporary disability but not extended sick leave) undermined the claim that her seniority made assistance unnecessary.

A significant part of the court’s reasoning addressed the NHLS sick leave policy document. It quoted the policy provisions indicating that employees who have exhausted sick leave credits and are medically certified as temporarily or permanently disabled may, with approval of the CEO (or delegate), be granted additional paid sick leave. The court did not accept Mr Abraham’s evidence that the policy required two separate applications (first extended sick leave, then temporary disability, or vice versa). Instead, it read the policy as not distinguishing in the manner contended for by the NHLS, and it reasoned that the application should have been dealt with as a joint process embracing extended sick leave and temporary disability considerations. On that reading, the court considered that Ms Yona should have been advised properly at the outset and that the failure to do so contributed to her being denied the opportunity to obtain (or at least properly apply for) extended sick leave benefits.

The court was also critical of the employer’s reliance on insurer refusal as determinative. It expressed difficulty with the proposition that the insurer’s refusal meant extended sick leave could not be approved, pointing out that the policy located approval authority with the NHLS CEO or delegate. It further regarded the contention that an application would necessarily have failed as speculative, particularly on the policy interpretation it adopted.

The court placed weight on the unfairness of processing Ms Yona’s absence as unpaid leave in circumstances where her sick leave was medically certified, where she had supplied sick notes, and where she was not properly assisted regarding available benefits. It emphasised that Mr Abraham had accused her of non-communication despite the presence of medical certificates, and it treated his stated reason—avoiding “fruitless expenditure”—as demonstrating a lack of care and compassion inconsistent with fair treatment at work. The cumulative effect, including her extreme reduction in income while ill, was treated as undermining trust and making the relationship unbearable.

In dealing with one of the grounds of appeal alleging inadequate assistance to the employer’s lay representative, the court dismissed it as insubstantial, noting the employer’s choice of representation and declining to treat this as a basis for impugning the award.

Ultimately, the court concluded that, on the facts and circumstances, Ms Yona’s resignation was not voluntary in the relevant sense and was prompted by the employer’s unfair conduct during her illness, rendering continued employment intolerable. On that basis, the commissioner’s award was held to fall within the bounds of reasonableness, and the Labour Court was held to have been correct to refuse interference.

5. Outcome and Relief

The Labour Appeal Court dismissed the appeal with costs, thereby upholding the Labour Court’s dismissal of the review application and leaving intact the commissioner’s arbitration award.

As a result, the commissioner’s finding of constructive dismissal and the award of compensation equivalent to three months’ remuneration (R102 000) remained effective, together with the direction that the amount be paid by the date stipulated in the award.

Cases Cited

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2008 (2) SA 24 (CC); (2007) 28 ILJ 2405 (CC).

Herholdt v Nedbank Ltd (Congress of South African Trade Unions as amicus curiae) 2013 (6) SA 224 (SCA).

Jooste v Transnet Ltd t/a South African Airways [1995] 5 BLLR 1 (Labour Appeal Court).

Woods v WM Car Services (Peterborough) [1982] IRLR 413 (Court of Appeal).

Murray v Minister of Defence (2008) 29 ILJ 1369 (Supreme Court of Appeal).

Pretoria Society for the Care of the Retarded v Loots [1997] 6 BLLR 721 (Labour Appeal Court).

Metropolitan Health Risk Management v Majatladi and Others [2015] 3 BLLR 276 (Labour Appeal Court); (2015) 36 ILJ 958 (Labour Appeal Court).

Dunwell Property Services CC v Sibande and Others (2011) 32 ILJ 2652 (Labour Appeal Court); [2012] 2 BLLR 131 (Labour Appeal Court).

Legislation Cited

Labour Relations Act 66 of 1995, section 145; section 186(1)(e).

National Health Laboratory Service Act 37 of 2000, section 19.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Appeal Court held that the commissioner’s finding that Ms Yona was constructively dismissed fell within the range of outcomes that a reasonable decision-maker could reach on the evidence. The court accepted that while Ms Yona’s illness originated in workplace events linked to an acting appointment, her resignation occurred much later and was directly associated with the employer’s handling of her prolonged medically certified absence, including the failure by HR to properly advise and assist regarding extended sick leave, the issuing of correspondence inaccurately alleging non-communication, and the unfair enforcement of unpaid leave resulting in severe financial hardship.

The appeal was dismissed with costs, leaving the Labour Court judgment and the arbitration award undisturbed.

LEGAL PRINCIPLES

The review of CCMA arbitration awards under section 145 of the Labour Relations Act 66 of 1995 proceeds on the constitutional standard of reasonableness. An award is not set aside merely because a court would have reached a different conclusion; it is interfered with only if the outcome is one that a reasonable decision-maker could not reach on the material before the commissioner, and factual errors are relevant only if they render the outcome unreasonable.

A constructive dismissal under section 186(1)(e) of the Labour Relations Act 66 of 1995 occurs when an employee terminates the employment contract because the employer has made continued employment intolerable. The onus rests on the employee to prove that resignation was not truly voluntary and that the employer’s conduct, assessed objectively and in its cumulative impact, destroyed or seriously damaged the relationship of confidence and trust so that the employee could not reasonably be expected to continue working.

In assessing constructive dismissal, the employer’s intention to repudiate the contract is not decisive; what matters is whether, without reasonable and proper cause, the employer’s conduct was calculated or likely to destroy or seriously damage the employment relationship, judged reasonably and sensibly in context.

National Health Laboratory Service v Yona and Others (PA 12/13) [2015] ZALAC 33; [2015] 10 BLLR 1002 (LAC); (2015) 36 ILJ 2259 (LAC) (12 May 2015)