1.1. Introduction
The concept of constructive discharge, also known as constructive dismissal, has been incorporated into our labour jurisprudence. This concept pertains to situations where the employer’s conduct towards the employee becomes so unbearable that it compels the employee to resign. In modern labour practices, mutual respect and fair treatment are essential in employment relations, with employers obliged to treat all employees equitably and without discrimination. Also, parties in employment contracts have the obligation not to undermine the performance of the contract. This obligation is paramount for effective performance by the employee of the duties assigned to him/her by the employer.
1.2. Legal framework of constructive dismissal
Dismissal in an employment relationship refers to a situation where an employee is summarily dismissed by the employer without notice.[1] Constructive dismissal on the other hand is where an employee terminates the employment contract without notice because the employer has made the working conditions intolerable by committing a breach of a fundamental term of the contract of employment such that the employee has no option but to resign. In MS. F.L. v. ITU[2], the Administrative Tribunal of the International Labour Organization defined constructive dismissal as follows: “Constructive dismissal… denotes a situation in which an organization engages in conduct such as to indicate that it no longer considers itself bound by the fundamental terms of the employment contract with the consequence that, if the employee then terminates the contract, he or she is entitled to relief on the basis that the organization wrongfully terminated the contract.”
Lord Denning M.R made an exposition of the position of the doctrine in Western Excavating (ECC) Ltd v. Sharp[3] when he stated thus:
“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, he terminates the contract by reason of the employer’s conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must, in either case, be sufficiently serious to entitle him to leave at once.”
The doctrine is rooted in common law, adapted across jurisdictions, and has gained significance through statutes addressing unfair dismissal. For instance, under section 95(1)(c) of the English Employment Rights Act[4] constructive dismissal is defined as a situation where an employee terminates the contract due to the employer’s conduct.
To succeed in a claim for constructive dismissal, the employee must prove a fundamental breach of the employment contract by the employer. Fundamental breaches include the following:
- unilateral reduction of the employee’s salary[5]
- insisting upon the employee working beyond the contractually obliged hours[6]
- unilaterally changing the employee’s duties[7]
- requiring the employee to work where they are not contractually required to work[8]
- breach of the implied term of trust and confidence[9]
The doctrine of constructive dismissal has been recognised, adopted and applied by our Labour Courts. The National Industrial Court of Nigeria (NICN) in Miss Ebere Ukoji v. Standard Alliance Life Assurance Co. Ltd.[10] held that:
“Globally, and in labour/employment law, constructive dismissal, also referred to as constructive discharge, occurs when an employee resigns because his/her employer’s behaviour has become intolerable or heinous or made life difficult that the employee has no choice but to resign. Given that the resignation was not truly voluntary, it is in effect a termination. In an alternative sense, constructive dismissal or constructive discharge is a situation where an employer creates such working conditions (or so changes the terms of employment) that the affected employee has little or no choice but to resign. Thus, where an employer makes life extremely difficult for an employee, to attempt to have the employee resign, rather than outright firing the employee, the employer is trying to create a constructive discharge. The exact legal consequences differ from country to country but generally, a constructive dismissal leads to the employee’s obligations ending and the employee acquiring the right to seek legal compensation against the employer. The employee may resign over a single serious incident or a pattern of incidents, generally, the employee must have resigned soon after the incident.” (Emphasis supplied)
1.3. Employee’s Burden of Proof
In a constructive dismissal claim, the onus rests on the employee to prove, with a balance of probabilities, that the working conditions were intolerable and that the employer could have rectified the situation but failed to do so. In Western Excavating v. Sharp (Supra), Lord Denning outlines four key elements the employee must establish:
- A repudiatory breach on the part of the employer.
- An election by the employee to accept the breach and treat the contract as at an end.
- The employee must resign in response to the breach.
- The employee must not delay too long in accepting the breach, as it is always open to an innocent party to waive the breach and treat the contract as continuing (subject to any damages claim that they may have).
In MR BABATUNDE KOMOLAFE v. TOMEZ GROUP LIMITED,[11] the NICN highlighted the importance of the employer’s intent in cases of constructive dismissal. When the employer expressed a willingness to rehire the claimant, the court held that the employer did not aim to force the claimant out of employment, negating the claim for constructive dismissal. Also in MR. CLEMENT ADETOKUNBO ADESORO v. FSDH MERCHANT BANK LIMITED[12] the court emphasized that constructive dismissal claims hinge on whether the employer breached any employment terms. Despite the claimant’s resignation prompted by the MD’s advice, the court ruled that the employer did not violate contract terms, thus rejecting the claim for constructive dismissal.
It will be helpful to provide some analysis of these instances where the court has refused the claimant’s claim for constructive dismissal.
1.4. Resignation Timeframe
One of the key elements as stated by Lord Denning is “time”. Time plays a pivotal role in constructive dismissal cases. A prompt resignation following the incident leading to termination is essential. Thus, where the employee waits for so long after the occurrence of the event leading to the termination of employment it is likely that the principle of constructive dismissal will not apply. This position received a judicial blessing in Joseph Okafor v. Nigerian Aviation Handling Company Plc[13] wherein the NICN relying on the decision in Western Excavating (ECC) Ltd v. Sharp[14] held as follows:
“The claimant himself made the point that the employee must resign in response to the breach; and must not delay too long in acting on the breach…to be able to succeed in a claim for constructive dismissal. The Claimant must show that he resigned soon after the incident(s) he is complaining about.”
The Court went further to hold that the Claimant, having waited for 3 months after the occurrence of the act of the employer before resigning, amounts to condonation of the act by the employee. Therefore his claim for constructive dismissal failed.
1.5. Conclusion
In conclusion, the doctrine of constructive dismissal requires two primary preconditions: (i) the employee’s resignation must be forced by the employer’s conduct, and (ii) the resignation should occur immediately after the conduct in question. The breach leading to the termination must be fundamental, and the employee must not delay in responding. Recent Nigerian case law reaffirms these principles, underlining the importance of the employer’s intent and adherence to contractual terms.
A claim for constructive dismissal necessitates meticulous attention to timing and substantiation of the employer’s misconduct. If proven, the employer becomes liable for damages rather than reinstatement. The question of the timeframe within which the employee resigns is a fact to be determined by the Court.
Author: Chibuzo JohnPaul Ofoha, LLM, A.CIArb (UK)
[1] The National Industrial Court of Nigeria and progressive development of labour and employment law in Nigeria – Essays in honour of Hon Justice B.A. Adejumo, OFR by Prof. Offornze D Amucheazi, SAN & Bimbo Atiola
[2] (Judgment No. 2967, of ILOAT consideration 9)
[3] (1978)Q.B 761
[4] Employment Rights Act (ERA), 1996
[5] Industrial Rubber Products v. Gillon [1977] I.R.L.R 389
[6] Derby City Council v Marshall [1979] I.C.R. 731
[7] Coleman (DA) v. S&W Baldwin [1977] I.RL.R 342.
[8] O’Brien v Associated Fire Alarms [1968] 1 WL.R. 1916 and Courtaulds Northern Spinning v. Sibson [1988] I.C.R. 451.
[9] Malik v Bank of Credit and Commerce International SA (In Liquidation) [1997] 3 All E.R. 1.
[10] Suit [2014] 47 NLLR (Pt. 154) 531
[11] SUIT NO. NICN/LA/498/2019
[12] SUIT NO. NICN/LA/187/2020
[13] Unreported Suit No: NICN/LA/29/2016
[14] Supra