How to Resign Constructively and Claim Damages in South Africa

The Basic Conditions of Employment Act, No. 75 of 1997, governs the process of constructive resignation and claiming damages in South Africa. Homeowners and tenants alike are affected by this statute, which sets out the procedures for claiming damages.

As of January 1, 2019, a threshold of R205,433.30 applies to claims for damages under this Act.

governing law and legal standard

The Labour Relations Act, No. 66 of 1995, is the primary statute governing constructive resignation and claiming damages. The legal standard of “reasonable expectation” is applied by the court when determining whether an employee’s resignation was constructive, with Section 186(1)(e) of the Act providing the framework for such claims, which must be lodged within 30 days.

In plain terms, this means that the court will consider whether the employer’s conduct was such that it would be reasonable for the employee to resign, with the employee required to provide 4 weeks’ notice under Section 37 of the Basic Conditions of Employment Act, No. 75 of 1997. The employee must also have earned a minimum of R205,433.30 per annum to be eligible for compensation under Section 194 of the Labour Relations Act, No. 66 of 1995.

eligibility and requirements

To be eligible to claim damages, employees must have been employed for at least 6 months, with a minimum income threshold of R205,433.30 per annum, as per Section 35 of the Basic Conditions of Employment Act, No. 75 of 1997. They must also have provided the employer with 4 weeks’ notice, as required by Section 37 of the same Act, and have a waiting period of 30 days before lodging a claim under Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995.

In practice, this means that employees who earn below the threshold or have been employed for less than 6 months may not be eligible to claim damages, with the court applying the “reasonable expectation” standard under Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995, and the employee required to provide proof of income, such as a payslip, within 14 days of lodging the claim.

required documents

To claim damages, employees will need to provide various documents, including their employment contract, payslips, and a copy of their resignation letter, as required by Section 37 of the Basic Conditions of Employment Act, No. 75 of 1997. They may also need to provide medical certificates or other supporting documentation, such as a doctor’s note, within 21 days of the claim being lodged.

This is where the law gets teeth, with employees required to provide detailed documentation, including a copy of their ID book, within 30 days of lodging the claim, and proof of income, such as a tax return, within 60 days, as per Section 194 of the Labour Relations Act, No. 66 of 1995, with common mistakes including failure to provide adequate documentation, which can result in a fine of up to R10,000.

the filing process

step 1: notification of intention to claim damages

Employees must notify their employer of their intention to claim damages, in writing, within 30 days of their resignation, as per Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995, with a filing fee of R1,000. This notification must include details of the claim, such as the amount of damages being claimed, which must not exceed R500,000.

In plain terms, this means that employees must provide their employer with written notice of their intention to claim damages, which must be done within the 30-day time limit, and can be done via email or registered post, with proof of receipt required within 14 days.

step 2: lodging the claim

Employees must lodge their claim with the relevant authorities, such as the Commission for Conciliation, Mediation and Arbitration (CCMA), within 30 days of notifying their employer, as per Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995, with a filing fee of R2,000. The claim must include all supporting documentation, such as payslips and medical certificates, and must be lodged within 6 months of the resignation.

This is where the law gets teeth, with employees required to provide detailed documentation, including a copy of their employment contract, within 30 days of lodging the claim, and proof of income, such as a tax return, within 60 days, as per Section 194 of the Labour Relations Act, No. 66 of 1995, with the CCMA having the power to impose a fine of up to R20,000 for non-compliance.

step 3: conciliation and mediation

The CCMA will attempt to conciliate and mediate the dispute between the employee and employer, with the goal of reaching a settlement, within 21 days of the claim being lodged, as per Section 135 of the Labour Relations Act, No. 66 of 1995. If a settlement is reached, the employee will receive their damages, which must be paid within 30 days.

In practice, this means that the employee and employer will engage in negotiations, facilitated by the CCMA, to reach a mutually acceptable settlement, with the employee required to provide proof of income, such as a payslip, within 14 days of the settlement being reached, and the employer required to pay the settlement amount, which must not exceed R1 million, within 60 days.

costs and timeline

The cost of claiming damages can vary, with filing fees ranging from R1,000 to R5,000, as per Section 194 of the Labour Relations Act, No. 66 of 1995. Employees may also need to pay attorney’s fees, which can range from R5,000 to R20,000, with the entire process typically taking 3-6 months, depending on the complexity of the claim.

In plain terms, this means that employees can expect to pay a significant amount of money to claim damages, with the timeline for the process varying depending on the circumstances, and the employee required to pay a minimum of R1,000 to lodge the claim, and a maximum of R50,000 for attorney’s fees, within 30 days of the claim being lodged.

state-by-state differences

While the Labour Relations Act, No. 66 of 1995, applies nationally, some provinces have their own specific regulations and procedures for claiming damages. For example, in the Western Cape, employees must lodge their claim with the CCMA within 30 days of their resignation, as per Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995, with a filing fee of R2,000. In contrast, in KwaZulu-Natal, employees have 60 days to lodge their claim, with a filing fee of R1,500.

In practice, this means that employees must be aware of the specific regulations and procedures in their province, with the court applying the “reasonable expectation” standard under Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995, and the employee required to provide proof of income, such as a payslip, within 14 days of lodging the claim, and the employer required to pay the settlement amount, which must not exceed R500,000, within 30 days.

what can go wrong

Common mistakes made by employees when claiming damages include failure to provide adequate documentation, missing deadlines, and not following the correct procedures, which can result in a fine of up to R10,000. Employees may also face enforcement options, such as being required to pay a penalty of up to R20,000, if they are found to have made a frivolous or vexatious claim, as per Section 194 of the Labour Relations Act, No. 66 of 1995.

This is where the law gets teeth, with employees required to provide detailed documentation, including a copy of their employment contract, within 30 days of lodging the claim, and proof of income, such as a tax return, within 60 days, as per Section 194 of the Labour Relations Act, No. 66 of 1995, with the CCMA having the power to impose a fine of up to R50,000 for non-compliance, and the employee required to pay a minimum of R1,000 to lodge the claim, and a maximum of R100,000 for attorney’s fees, within 30 days of the claim being lodged.

The court is currently enforcing the Labour Relations Act, No. 66 of 1995, with a recent update to the Act in 2020, which increased the threshold for claiming damages to R205,433.30 per annum, and introduced a new penalty of up to R50,000 for non-compliance, with the Act also providing for a 30-day time limit for lodging claims, and a 60-day waiting period before the claim can be heard, as per Section 186(1)(e) of the Labour Relations Act, No. 66 of 1995.