Contemplated Employee Dismissals Backfire Through Compensation

Employees are in most cases in need of funds to finance their lives, the lives of their loved ones as well as their goals. Employers, on the other hand, are normally in need of labour to perform certain tasks or functions for the benefit of the organisation. These two parties’ relationship is governed by terms and conditions outlined in the contract of employment.

The contract of employment is defined in Section 2 of the Employment Act as “an agreement, whether oral or in writing, expressed or implied, whereby one person agrees for a wage or other benefit or both to let his labour to and to perform it under the orders of another person who agrees to hire it”.

But like any other contract or agreement, there comes a point where it terminates. A contract of employment can be terminated by either party in accordance with the stipulated terms under the termination clause of the contract. The reasons for termination vary from contract expiry, disciplinary action, disputes and finally to the discovery of “greener pastures” elsewhere. These reasons are the usual and most common ones.

However, there exists a reason behind an employment contract termination that is known as “constructive dismissal”. Constructive dismissals can lead to an employer compensating an employee for resigning from their organisation. Want to know how? Read on.

Definition

The Osborn’s Concise Law Dictionary defines constructive dismissal as “a dismissal to be inferred from the fact that the employer’s conduct is such that the employee has no choice but to resign”. This definition states that a constructive dismissal is a situation whereby an employer’s action(s) towards an employee forces the employee to resign from duty. But as in any other allegation, it must be proven that indeed an employee has been constructively dismissed. The question is, how can that be done?

According to John Grogan in his book, “Workplace Law,” the following elements must be present to confirm constructive dismissal: an employment relationship must exist at the time the employee leaves his/her job, the employee must have terminated the contract of employment, the employee must prove that it would have been intolerable to remain in employment, and there must be causal nexus between the employer’s conduct and the circumstances that induced the resignation of the employee.

The Compensation

If the employee can prove that indeed they were dismissed constructively using these guidelines, the dismissal will be deemed unfair. Unfair dismissals warrant compensation.

According to Section 24(4) of the Trade Disputes Act, factors that determine compensation are “the actual and future losses likely to be suffered by the employee as a result of the wrongful dismissal, the age of the employee, the prospects of the employee in finding other equivalent employment, the circumstances of the dismissal, the acceptance or rejection by either the employer or the employee of any recommendations made by the court for the reinstatement of the employee, any contravention of the terms of any collective agreement or of any law relating to employment by the employer or the employee; or the employer’s ability to pay.”

Once all these have been taken into consideration, the employer will then be ordered to pay the employee(s). This also impacts constructive dismissal where an employer clearly contemplates and crafts toxic conditions leading to an employee’s resignation or dismissal.

The conclusion

Constructive dismissal is the latest pandemic. The punishment in this case will come in the form of an unexpected financial expense, i.e. compensation. All employers must ensure they do not act in any way that can prompt the above to avoid the unnecessary.

Contacts

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