Industrial Relations Advisory – Constructive Dismissal

April 2017

The Industrial Court Awards in cases of Constructive Dismissal have been much in the news recently since one employee was awarded three million dollars in compensation for having been dismissed using flawed procedures.

A judgment from the Industrial Court in Trade Dispute No. 221 of 2003, delivered on September 21, 2005 between SWWTU and PLIPDECO on the subject of “Constructive Dismissal” may be of interest to employers who have not come across this type of dismissal and who may, therefore, through lack of planning, run a-foul of the court in what may otherwise appear to be a straightforward employee grievance matter.  A judgment in an employee’s favour in a constructive dismissal case can be costly as a result not only of the costs of representation in the Industrial Court, but also of the sums awarded by the Court to the aggrieved worker.  A wise employer tries to avoid such a possibility.

Constructive dismissal has, in custom and practice, been defined as a situation where an employer’s conduct was so unreasonable as to leave an employee with no other option than to resign.  Selwyn’s Law of Employment paragraph 8.52 goes a step further by saying that: “The test for constructive dismissal was to be determined by the contract test i.e. did the employer’s conduct amount to a breach of contract which entitled the employee to resign?”  The distinction is a fine one and, as in most industrial relations cases, the final determination will be made on the facts of each case.  It must be recalled that every contract of employment between an employer and an employee includes the common law obligations or duties of:

  • Co-operation – a positive obligation to take all those steps which are necessary to achieve the purposes of the employment relationship (material and psychological conditions, duty to work, obey reasonable orders, etc.).
  • Care – the duty of employers to take reasonable care for the safety (and therefore health) of their employees in the course of their employment, and of employees to exercise reasonable care and skill in the performance of their services.
  • Fidelity – a term implied in every contract of employment that employees (including management employees) serve honestly and faithfully (property handling, not serving competition, confidentiality, etc.).

Judgements throughout the Caribbean have been made citing “constructive dismissal” and awards made which can be very costly to unwary employers. Not providing a safe environment for employees may, for example, mean not repairing slippery steps despite employees repeatedly slipping or falling and injuring themselves, or in today’s environment, not providing security guards for women who have to work late shift hours. It may equally include not having a sexual harassment policy which is monitored and implemented. Both these have been subject to disputes in the Industrial Court. In the case cited above, it was a matter of a polluted, dusty atmosphere which was allegedly affecting an employee’s health.

If in doubt, rather than face a long and costly court process, it is always advisable to check with your IR advisor, as any such decision may have profound consequences for the future.

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