Wium v Barloworld South Africa (Proprietary) Limited t/a Barloworld Toyota Centurion and Others (JR 560/2021) [2023] ZALCJHB 343 (6 December 2023)

FLYNOTES: LABOUR – Constructive dismissal – Intolerable conditions – Resignation due to implemented changes to commission structure – Resulting in substantial reduction of earnings – Required to prove that unbearable circumstances were cause of resignation – Further that there was no reasonable alternative – Arbitrator found that employee failed to prove claim – Resigned before new commission structure had been implemented – Did not seriously attempt to do work required under new structure to see if it was workable or not – Resignation was premature and unjustified – Commissioner correctly found applicant failed to discharge onus to prove she had been constructively dismissed – Review application dismissed.

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Case No: JR 560/2021

In the matter between: CAROL JOHANNA WIUM Applicant and BARLOWORLD SOUTH AFRICA (PROPRIETARY) LIMITED t/a BARLOWORLD TOYOTA CENTURION 1st Respondent MOTOR INDUSTRY BARGAINING COUNCIL 2nd Respondent RENE HUYSER N.O. 3rd Respondent

Heard:

01 June 2023

Delivered: 06 December 2023

JUDGMENT

JOLWANA, AJ

Introduction

[1] In the face of an indubitable resignation letter, this review application raises a deceptively simple but actually vexed issue of whether or not the applicant’s dismissal was procedurally and/or substantively unfair in that she was constructively dismissed. If this Court finds in her favour on constructive dismissal, the applicant seeks redress in the form of the review and the setting

aside of the arbitration award[1] issued by the third respondent, (the arbitrator). Furthermore, she seeks other consequential relief all of which hinge on the main

relief.

Background

[2] Applicant was employed by the first respondent (Barloworld) as a Finance and Insurance Business Manager (F & I business manager) for new vehicles at the Barloworld Toyota Centurion branch. On 30 April 2019, she resigned from her employment. In her letter of resignation, she alleges that Barloworld made her continued employment intolerable. This was because Barloworld implemented changes to the commission structure, the net effect of which was that the applicant’s commission earnings which were a substantial

portion of her total earnings were reduced significantly. During the three months immediately preceding her resignation, her average gross monthly income was R82 912.70 which included a basic salary of R18 000.00 per month. Therefore, her average monthly commission was about R64 912.70.

[3] At the time of her appointment she was the only F & I business manager for new vehicles which entitled her to earn commission on the F & I products sold in respect of new vehicles. She would from time to time be requested to train a new F & I business manager or consultant (trainee). In that event, she would share 10% of the commission earned with the trainee until the trainee

was accredited. On accreditation, the trainees would be employed as F & I business consultants at other Barloworld branches.

[4] In 2017, Ms Lala was appointed as a trainee and in April 2018 she was accredited as an F & I consultant. Ms Lala was then appointed as an F & I business consultant at Barloworld Toyota Centurion branch which is where the applicant was working. The applicant says that Ms Lala’s appointment was on the basis that she would earn a basic salary and 20% of the F & I commission payable on the sale of new vehicles. This meant that her commission would be reduced from 100% commission payable on the sale of F &

I products on new vehicles to 80%. This did not bother her that much as she appears to have accepted it without demur even though it resulted in a material reduction in her earnings.

The grounds of review

[5] The applicant has gone into some detail explaining the grounds of review on which she relies for the relief she seeks and in doing so, she relies largely on the evidence that was placed before the arbitrator and challenges the conclusions of the arbitrator in her award. In their simplest formulation, the three grounds of review raised by the applicant are the following. First, the fact that she had elected to resign rather than refer the matter as an unfair labour practice dispute. In this regard, the applicant

contends that the exhaustion of alternative legal remedies to resigning and claiming constructive dismissal does not form part of the test for constructive dismissal. She further contends that the failure to pursue alternative legal remedies was never raised as a defence by Barloworld. Therefore, the arbitrator’s mero motu raising of this defence when Barloworld did not raise it was grossly irregular. Had the arbitrator considered the question she was required to consider, namely whether the reduction in her remuneration rendered her continued employment intolerable, she could have found that indeed her continued employment was intolerable.

[6] Second, the arbitrator had found that she had resigned before the implementation of the change in the commission structure. She contends that experiencing the intolerability is not part of the test for constructive dismissal. Therefore, she was not required to wait until the implementation of the new commission structure before resigning to know that the significant reduction in her remuneration would be intolerable. She knew that the consequence of the change would be significant and on Barloworld’s own

version, it resulted in a 20% reduction in her earnings which she was aware of even before the change came into effect.

[7] Third, the arbitrator considered the reason behind Barloworld’s decision to implement the change in the commission structure which the arbitrator said was not malicious but was prompted by necessity. In this regard, the applicant contends that the test for constructive dismissal does not include considering the employer’s reasons for its decision to implement or create the

circumstance that leads to intolerability. It being not malicious or the decision being benevolent has no bearing on the test for constructive dismissal, so went the submission. Therefore, the arbitrator erred in taking into account an irrelevant consideration

in deciding whether or not she was constructively dismissed.

Ultimately, the commissioner should have considered whether her continued employment was rendered intolerable as a result of the reduction in her commission earnings. Therefore, the commissioner’s decision was objectively incorrect regard being had to the evidence that was before her. All the above being said, the applicant’s case is that the commissioner was required to consider three questions and test those questions against the evidence before her. Those questions are whether or not she terminated her employment, whether her continued employment had become intolerable, and finally, whether it was Barloworld that made her continued employment intolerable which she contends, is the correct test for constructive dismissal, not the issues that the arbitrator considered.

[8] The applicant submits that it is so that she had terminated the contract of employment. She did resign because her employment was made intolerable by Barloworld. This, she says, she stated quite clearly in her letter of resignation. With respect to whether it was Barloworld that made her continued employment intolerable, she had given evidence that it was the change in her commission structure which had the effect of reducing her earnings by at least 20%. That change was instituted by Barloworld. Therefore, the only question was whether the changing of the commission structure by Barloworld resulted in her employment becoming intolerable.

The new commission structure

[9] Concerning the new commission structure, the applicant’s case is that she gave evidence that during the time of her employment at Barloworld, many changes in the commission structure had been made. She had accepted these previous changes even though the vast majority of them had a negative effect on her earnings. Therefore, it was never an issue that the change in commission structure could prejudicially affect her. However, the 2019 changes had such a detrimental effect on her earnings that her continued employment became intolerable and the author of those changes was Barloworld. It was submitted that the other requirements for a constructive dismissal having been established or not being in dispute, the applicant’s case turns on whether she had in fact shown that her continued employment became intolerable.

[10] As she was not a stranger to training new trainees as F & I business managers, the coming of Ms Lala was no different. In fact, when she was taken on as a trainee F & I business manager she was initially paid by Barloworld head office. When she qualified as an F & I business consultant in 2018, she was entitled to 20% of the commission that the applicant was entitled to earn. Therefore, there was an 80/20 split in the commission payable to the applicant and Ms Lala respectively. It was submitted that, this was a significant blow to the applicant’s earnings in the final analysis.

[11] In March 2019, Barloworld introduced the selling gross target for the F & I employees, that change constituted a material blow. The applicant together with Ms Lala were concerned with this change and raised their concerns with Barloworld on 6 March 2019 because the applicant felt that the change in the selling gross target from a percentage to a rand value reduced the chances of meeting the target, which Mr MacFarlane accepted as a valid concern. However, the applicant’s concerns were not considered in that

the change was implemented without regard to them. It was further submitted that in line with her version, if the applicant had

performed at the same level under the new commission structure, the effect would have been a 20% reduction in her earnings based on Barloworld’s figures presented at the arbitration proceedings, something that had been conceded by both Mr de Bruin and Mr MacFarlane.

[12] On 12 March 2019, the applicant raised her concerns about the selling gross target in a meeting. In that meeting it was announced that there were three options for a new split in commission between herself and Ms Lala. She did not agree to any of the three options that were presented to her and suggested that only three F & I employees were needed which would enable them to get

a better commission split. The next meeting was on 19 March 2019 but that meeting was not a discussion, consultation or even a platform in which Barloworld would consider her concerns. Her feeling was that the decision to change the F & I commission structure was a foregone conclusion and the meeting was for Barloworld to inform her about its decision. This was further illustrated by the brevity of the meeting on the 19th of March 2019.

[13] The new F & I commission structure meant that sales executives were going to be split between the four F & I employees. She was of the view that this would mean that whereas before the appointment of Ms Lala she earned 100% commission and after Ms Lala’s appointment she earned 20% less commission. She would now be entitled to a 50% share in the commission. Mr Macfarlane

referred to a spread sheet indicating her predicted earnings if she had not left Barloworld and continued working under the new

commission structure and had increased her performance by 7.5% - 10%. However, her problem with that spreadsheet was that it was just an informed guess as she and her allocated sales executives and even Barloworld as a whole could potentially perform better or worse than what was reflected in the spreadsheet.

[14] Her version was that if she had performed at the same level under the new commission structure, her earnings would have decreased by 20% based on the figures that Barloworld posited. Both Mr de Bruin and Mr Macfarlane conceded this under cross-examination. Furthermore, Mr Macfarlane gave evidence that the only step he took to make her comfortable with the changes was to inform her that her performance would need to improve. He also conceded that the new commission structure was not tested before its implementation. Her discomfort about the new structure was the fact that more than 80% of her total earnings consisted of commission.

[15] The reason given by Barloworld for introducing the change was that it was not fair for a qualified trainee F & I employees not to be entitled to the same commission as the F & I business managers. However, there was very little regard or consideration of whether the new commission structure was fair to her. The other reason given for the change was to allow the F & I business managers to have a more focused approach to clients in order to sell not only some but all the available products. This was intended to drive a change in their attitude to sell more products and thus earn more commission.

[16] She felt that there was enough incentive already driving her to sell more products under the then existing commission structure and therefore she felt that the new commission structure was not necessary. A 5% to 10% decrease in commission earnings to promote better performance from her could be acceptable to promote better performance. However, a 20% decrease in earnings was, in her view, an unjustified demotion. Her version at the hearing was that the reasons given by Barloworld for the change in commission

structure were irrational and ignored better alternatives that would be fair to both and could achieve the desired behavioral change.

[17] She also took the view that only three F & I business managers were needed and she made this suggestion during the meeting of 12 March 2019. It became clear when both Mr MacFarlane and Mr de Bruin were cross-examined that costs saving was not a factor when the fourth F & I business manager was introduced. Her view was that there was no need for the fourth person as the sales were

declining. Barloworld’s witnesses disputed that the fourth person was unnecessary without any evidence to support their contentions in this regard. She had previously managed perfectly well to deliver an excellent performance on all new car units sold with the assistance of a trainee every few years. The evidence of Barloworld was that her performance in the past was never an issue and in fact she had performed excellently. She contended that the need for the fourth F & I manager was manufactured by Barloworld. Besides, it was Barloworld’s evidence that since her resignation there have only been three F & I business managers.

[18] With all her proposed alternatives to the new commission structure not having been heeded, she was given notification on 25 March 2019 that the new F & I commission structure was to be introduced without any intention of testing it, looking at possible alternatives or even reviewing it. She felt that after serving Barloworld for so long with professional and outstanding service her earnings were now being reduced by as much as 20%. It did not help that some of her colleagues with whom she raised her concerns shrugged her off and even shunned her in some instances. When she resigned there was no attempt to prevent her from resigning. This evidence was also not considered by the arbitrator. She contends that had the commissioner considered all the evidence that was before her, she could have concluded that her employment had become intolerable and she was therefore constructively dismissed.

[19] Even the issue of inequality in treatment between her on the one hand and Ms Lala and Ms Musthan on the other hand was a creation of Barloworld. This was because they were both hired at a time when only three F & I business managers were required, something she communicated to Barloworld. This evidence, she submitted, was also not taken into account by the commissioner. Not considering the evidence before her which in effect was that Barloworld was the sole cause of the inequality and the sole cause of the intolerability of her employment was a reviewable irregularity. It was also a reviewable irregularity that the commissioner failed to apply her mind to the evidence before her which caused her to arrive at an incorrect decision. These were more or less the applicant’s

contentions and the evidence she tendered at the bargaining council hearing some of which she contends was not gainsaid. Most importantly, she contends that had all of this evidence been considered, the commissioner would have found that she had been dismissed through Barloworld’s creation of an intolerable work environment which led to her resignation.

Barloworld’s submissions

[20] Barloworld’s case is that its retail business was taken over by NMI Durban South Motors as a going concern in about June 2021. Barloworld gave a background most of which appears to be the common cause as it was not contested. Some of the facts that are provided give some useful context to the work situation within the Barloworld group at the time across different branches nationwide. The applicant has elected not to file a replying affidavit which is what would have been expected if there was any issue about those facts. They must therefore be accepted as common cause as they have not been denied in any way whatsoever, certainly not by means of a replying affidavit.

[21] That background information is to the effect that when the applicant resigned, Barloworld had approximately 40 motor retail dealerships nationally across various brands including Toyota, Ford and Volkswagen in all of which there were approximately 120 F & I managers, consultants and representatives (the F & I’s) whose job functions were essentially the same. The applicant was one of all those F & I’s based at the respondent’s Centurion Toyota dealership. All of those employees earned a basic salary and commission which was subject to change at the discretion of Barloworld.

[22] Barloworld contends that the applicant’s contract of employment contained a clause in terms of which the commission structure could be changed from time to time. It further appears that the changes in the commission structure were not a rare occurrence in that they were made at least annually at the commencement of their new financial year. The relevant clause in the applicant’s contract of employment reads:

‘Commission will be paid according to your employer’s commission scheme as explained to you. Commission may change from time to time and you will be given notice of any changes as and when they occur.’

[23] Mr de Bruin, Barloworld’s group executive for F & I’s for the Barloworld group investigated the state of commissions payable to all the F & I’s at the beginning of 2019. This investigation revealed that the commission was structured differently at four of their 40 dealerships. These were Toyota Centurion, Toyota Kuilsriver, Toyota Tygervalley and Ford Tygervalley. The anomalies that he found were the following:

‘7.1 Trainees and junior F & I’s would work with a qualified F & I. Their work would be pooled and the trainee/junior would earn commission of 10-20% of the pool and the qualified F & I would earn the rest of the pool.

7.2 Once an F & I was qualified and could work independently, salespeople would be apportioned to them and they would earn commission based on the work done, i.e. 80/20 split would come to an end.

7.3 At the average sized dealerships, one F & I would look after new car sales and one would look after used car sales. In large dealerships (such as Toyota Centurion – which is the largest dealership for the first respondent in the country) two F & I’s would look after new car sales and two would look after used car sales. Specific salespeople would either be appointed to each F & I, or – if they were agreeable to it – the work for their specific department (new or used car sales) would be pooled and they would split the commission 50/50.

7.4 It was found that at the 4 dealerships in question, the 80/20 split had persisted even after the new F & I’s were qualified for some time.’

[24] Mr de Bruin felt that the new F & I’s were being treated unfairly at these 4 dealerships and he took steps to rectify the anomalies. He engaged with the regional F & I managers and the dealer principals of each of the 4 dealerships in question seeking to establish if the new F & I’s in these dealerships could work independently. Where they could work independently, the 80/20 split in commission was done away with. Specific salespeople were either assigned to the F & I’s in these dealerships or the commission would be pooled and the commission pool would be split 50/50.

[25] Mr de Bruin established that the new F & I’s at Toyota Centurion where the applicant worked who had been qualified since 2018 could work independently. This led to his engagement with the applicant who represented the F & I’s there. At a later

stage, he engaged with all F & I’s at the dealership. The result of this engagement was that the 80/20 split in favour of the applicant was done away with and specific salespeople were assigned to the F & I’s. This decision did not sit well with the applicant as a result of which she resigned before its implementation.

[26] In her resignation letter the applicant stated the following:

‘I hereby give notice of my resignation with effect from 30 April 2019. The reason for my resignation is that my continued employment with Barloworld Toyota Centurion has become intolerable.

What has made it intolerable is the manner in which I have been treated in relation to the commission I earn and in particular the fact that with effect from 1 May 2019 I will only be entitled to earn 50% of the commission I was previously entitled to earn.

This unilateral change to the commission will have a material and significant impact on my earnings, with the affect that I am unable to continue to work in an environment where for no reason related to my work or my ability to perform the work, I have been forced to accept a deduction in my commission earnings of 50%.

I have raised my concerns regarding the deduction in my earnings previously, and it has been made clear to me that the company will not review or change its decision. In such circumstances, I am left with no alternative but to resign with immediate effect as I hereby.’

[27] Barloworld contends that at the arbitration hearing the applicant had alleged that the reduction in her commission earnings took place because she was being victimized in order to work her out of the business. Furthermore, she attempted to supplement the reasons for her resignation by making further submissions such as reference to previous commission changes and the general atmosphere in her workplace after the last change.

[28] It was further contended that the reason the for applicant’s resignation was recorded in her letter of resignation being the 50% reduction in commission which would result from the changes in the commission structure which was to be implemented from 1 May 2019. Now that the applicant has subsequently become aware that her assumption in that regard was incorrect, she has sought to manufacture different reasons such as an unpleasant working environment and ongoing victimization as reasons for her resignation. These should be rejected. Barloworld denies dismissing her and avers that the commission structure had many components. First, the commission earned from the banks otherwise known as the dealer incentive commission which in essence is the commission for securing finance for customers to purchase the vehicles. The second component is commission earned from the sale of financial and/or

insurance products (the products) by the F & I’s to the customers.

[29] With regard to these components of the commission, Barloworld says that there was a shift in focus to maximizing income for Barloworld through the sale of these products. The sale of products was incentivized which in turn increased commission earnings for the F & I’s. The applicant admitted to not believing in the products which she in fact did not sell. Her refusal to sell the

products was to the detriment of Barloworld’s business. For an applicant to earn a substantial commission without selling the products, her volume of vehicle sales had to significantly increase if she was to rely on dealer incentive commission. Barloworld on the other hand intended to ensure that its F & I’s spent sufficient time with customers to sell the products. The failure to spend sufficient time with customers explaining the products in detail resulted in a considerable compliance risk for Barloworld, and so goes the submission.

[30] In the final analysis, Barloworld contends that the applicant’s remuneration was never reduced. Her commission structure was changed and the applicant could have earned the same commission as before the change if she had sold the products as she was required to do. It would have been her refusal to do so that would have resulted in her earning less commission. It was mistaken of the applicant to assume that a 20% reduction in the volume of vehicle sales would automatically result in a 20% reduction in earnings. The allocation of specific salespeople was done to put an end to the unfair treatment of the new F & I’s which Barloworld was in any event obliged to do. That allocation was skewed in favour of the applicant, regard being had to their experience. The

changes in the commission structure were motivated by the operational requirements and were applicable across Barloworld’s business. It was denied that the changes that were implemented were intended to victimize her and were intended to work her out of the business as she alleged.

The arbitrator’s award

[31] In his ruling the arbitrator identified the issues to be decided as, first, whether or not the applicant was dismissed as provided for in section 186(1)(e)[2] of the Labour Relations Act[3] (the LRA). The second issue was whether or not the applicant’s dismissal was substantively, constructively and/or procedurally unfair and finally the appropriate relief. After a very brief summary of the evidence that was led before her, the arbitrator stated, correctly, that the onus of proving that a constructive dismissal has occurred rests on the employee. The employee must discharge this onus by proving firstly that the employment circumstances were so intolerable that the employee could truly not continue to stay on. Secondly, the unbearable circumstances were the cause of the resignation of the employee. Thirdly, an employee has to prove that there was no reasonable alternative at the time but for the employee to resign to escape the circumstances. Fourthly, the employee must prove that the unbearable situation must have been caused by the employer. Finally, the employer must have been in control of the unbearable circumstances. After analysing the evidence, the arbitrator issued an award in which she concluded that the applicant failed to discharge the onus of proving that she had been constructively dismissed.

The issues

[32] The attorney for the applicant succinctly summarized the issues for determination by this Court. He submitted that an employee has to prove that the employee terminated the contract; that the continued employment became intolerable for the employee; and that it is the employer that made the continued employment intolerable. It is common ground that the applicant sent the letter of resignation to Barloworld in which the reasons for her resignation are well articulated. It is the conduct of the employer, Barloworld, which the applicant blames for that resignation as having created an intolerable work situation. This is the change in the commission structure which the applicant alleges, led to a substantial reduction in her income. The real issue if not the only issue, as the attorney for the applicant put it, is the narrow question of whether that conduct, the changing of the commission structure, created an intolerable work environment that would entitle the applicant to a claim of constructive dismissal.

[33] The jurisprudential philosophy underpinning the concept of constructive dismissal as provided for in section 186 (1)(e) of the LRA was endorsed by the Constitutional Court and elaborated on in Mvumbi[4] as follows:

‘Section 185(a) of the Labour Relations Act confers “the right not to be unfairly dismissed”. Section 186 (e), defines “dismissal” as including a situation where “an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee”. This definition gives statutory embodiment to the jurisprudence of constructive dismissal that preceded it. The CCMA concluded that Mr Redgard had been constructively dismissed. In its application to this court, the employer contends that the CCMA ̶ and the Labour Courts in refusing to review its determination ̶ misconceived the jurisprudential prerequisites for constructive dismissal, since on Mr Redgard’s own version he had a choice whether to resign or be subjected to poor performance procedures. It asks this Court to step in.

There are two reasons why the invitation cannot be accepted. The first is that the employer’s submission overlooks Mr Redgard’s uncontested evidence to the effect that his work situation had become intolerable and that the alternative to resignation was a sham since the employer would find a reason to dismiss him anyhow. This means there was no “choice”. The second is that it misconceives the test for constructive dismissal, which does not require that the employee have no choice but to resign, but only that the employer should have made continued employment intolerable.’

[34] While what the test for constructive dismissal is, is common cause, that is, in my view, not the end of the matter. There has to be a basis for a finding whether or not an employee was constructively dismissed. The applicant’s contentions were raised with admirable clarity as regards the criticisms levelled against the commissioner’s findings. However, her submissions were not so clear on how the commissioner should have determined the intolerability. Certainly, there are factors in any situation that

the commissioner should consider to come to a conclusion that the employer has made the work environment intolerable. Intolerability

cannot be determined in a vacuum.

[35] What is being contended for on the applicant’s behalf is that some or all of the things that the commissioner considered which were referred to earlier are not part of the test for constructive dismissal. However, I am of the view that it is an overly simplistic analysis of the award. On reading the award I do not get the impression that the commissioner did not know or was confused about what the test is. It seems to me that she understood the test very well and applied it to the material that was before her. With reference to case law, she considered various factors some of which she even itemised in a bullet-point fashion. It is clear to

me that she did apply her mind to the test for constructive dismissal and the evidence and other material that was placed before her. The submission that the award was the outcome of a wrong application of the test for constructive dismissal is unsustainable.

[36] The other difficulty with the applicant’s contentions is that not much is said about the indisputable fact that the contract of employment specifically made provisions for the changes in the commission structure. The applicant contends on the one hand that the reduction of as much as 20% of her remuneration is what caused the intolerability which would have been the effect of the new commission structure had she not resigned. The 20% reduction which now seems to be the cause of the intolerability was not cited as a reason for the resignation in the resignation letter. It was in fact a 50% reduction in commission earnings that was cited as a cause of the intolerability. It seems that the source of the 20% reduction is what Barloworld was seemingly able to demonstrate as being the negative effect of the change in the applicant’s earnings if she performed at the same rate as before the change. This appears to have changed the applicant’s stated cause of intolerability from what was stated in her resignation letter.

[37] It would seem that there has since been somewhat of a shift in the applicant’s basis for her resignation. In her email dated 26 April 2019, the applicant makes it abundantly clear what it is that she regarded as being the cause of the intolerability. Her reasons in that regard are worth repeating.

‘The reason for my resignation is that my continued employment with Barloworld Toyota Centurion has become intolerable.

What has made it intolerable is the manner in which I have been treated in relation to the commission I earn, and in particular the fact that with effect from 1 May 2019 I will only be entitled to earn 50% of the commission I was previously entitled to earn.

This unilateral change to the commission structure will have a material and significant impact on my earnings, with the effect that I am unable to continue to work in an environment where for no reason related to my work or my ability to perform my work, I have been forced to accept a deduction in my commission earnings of 50%.’

[38] The resignation letter makes no mention of a 20% reduction. I must say that a 50% as against 20% reduction as reasons for the resignation are so vastly different that one cannot be mistaken for the other. It seems that once Barloworld was able to demonstrate that the reduction in her earnings in a worst case scenario would have been no more than 20%, the applicant basically moved her goal post regarding the cause of the intolerability.

[39] In any event, on the applicant’s own showing she did not have a problem with a 20% reduction. This she clearly says so herself in her founding affidavit where she makes the following averments.

‘20. Ms Lala was appointed as a trainee in 2017 and qualified and was accredited as a F & I Consultant in 2018, and she was appointed as such by Barloworld in April 2018 at the Centurion branch being the branch where I worked.

21. Ms Lala was appointed by Barloworld in April 2018 on the basis that she earned a basic salary and 20% of the Finance and Insurance Commission payable on the sale of new vehicles.

22. The appointment of Ms Lala on these terms meant that my entitlement to commission reduced from 100% of the commission payable on the sale of F & I products on new vehicles to 80%.’

[40] It does not appear that the applicant had a serious problem with a 20% reduction in her commission as what she says above predates the introduction of the new commission structure. In her founding affidavit, the applicant does not refer to any of the reasons for her resignation which she had cited in her resignation letter. In fact, those reasons are conspicuous by their absence. This

bolsters Barloworld’s contention that new reasons were put forward at the arbitration hearing which are different from those

cited in the resignation letter. Furthermore, the 50% reduction in her commission earnings is made only once in her founding affidavit

albeit in a different context where the applicant says:

‘67. The new F & I Commission Structure meant that the Barloworld sales executives would be split between the four Finance and Insurance employees. My version was that the change meant the commission pot would effectively be split in half and that I would only be entitled to a 50% share in the commission, where I previously was entitled to 80% (and before the appointment of Ms Lala 100%).’

However, she does not explain the reasons for her intolerability changing from 50% reduction in commission earnings which is cited in her resignation letter to now 20% reduction being at the centre of the intolerability. The applicant’s heads of argument make it plain that her problem was not the 50% reduction which was cited in the resignation letter. Her problem or cause of the intolerability was the 20% reduction in her commission earnings which was mentioned for the first time at the arbitration hearing. This part of the applicant’s case is expressed as follows in the applicant’s heads of argument. “A 20% decrease in earnings, however, is less of a mechanism to change employee’s behaviour and more of an unjustified demotion”.[5]The legal position

[41] This takes me to the approach adopted by the arbitrator in this matter before she arrived at the conclusion that she did. As earlier

indicated she relied on several cases which are directly referred to in the award to support her conclusions. I generously quote from the case of Bakker[6] which, in my view, shows that there was a legal basis for the arbitrator’s approach. I find that case to be very useful in

its exposition of the legal position on constructive dismissal:

‘[12] ‘Intolerable’ is not defined in the LRA, but it is a strong word which suggests a high threshold: In this regard, Grogan, in his Workplace Law states:

‘[T]he requirement that the prospect of continued employment be “intolerable” … suggests that this form of “dismissal” should be confined to situations in which the employer behaved in a deliberately oppressive manner.’

[13] The Labour Court has held that if an employee is too impatient to wait the outcome of the employer’s attempts to find a solution to the perceived intolerable situation and resigns, then constructive dismissal is almost always out of the question.

[14] Furthermore, the court has held that an employee who resigns instead of taking an opportunity to defend herself in terms of a LRA process, such as a disciplinary enquiry or a performance counselling process cannot claim constructive dismissal.

[15] The Constitutional Court in Strategic Liquor Services v Mvumbi N.O. & others, held that the test for constructive dismissal does not require that the employee have no choice but to resign, but only that the employer should have made continued employment intolerable.

[16] In Distinctive Choice 721 CC t/a Husan Panel Beaters v Dispute Resolution Centre (Motor Industry Bargaining Council) & others, Hulley AJ opined that the above statement in Strategic Liquor Services must be understood to mean the absence of reasonable alternatives. He said:

‘[129] It seems to me that this latter statement must be understood to exclude a “reasonable” choice. If it was intended to mean that an employee was not required to demonstrate that he or she had no “reasonable” alternatives to resignation it would be in conflict with the language of the section. Quite apart from all the authorities on the question, the ordinary meaning of the word “intolerable” connotes the absence of a (reasonable) choice. I emphasize the meaning of the phrase intolerable and its various synonyms as set out above. If an employee has reasonable alternatives, it implies that the conduct of the employer is not unbearable or not beyond the limits of tolerance.

[130] Thus, in Albany Bakeries, Pillay AJA, with reference to the judgment of Conradie JA in Old Mutual Group Schemes v Dreyer & another held:

“[28] Conradie JA referred to the Loots case where mention was also made of a belief of the employee that the employer would never reform or abandon the pattern of creating an unbearable work environment. How will an employee ever prove that if he has not adopted other suitable remedies available to him? It is, firstly, also desirable that any solution falling short of resignation be attempted as it preserves the working relationship,

which is clearly what both parties presumably desire. Secondly, from the very concept of intolerability one must conclude that it does not exist if there is a practical or legal solution to the allegedly oppressive conduct. Finally, it might well smack of opportunism for an employee to leave when he alleges that life is intolerable but there is a perfectly legitimate avenue open to alleviate his distress and solve his problem. ...

[30] In addition, even if an employee was dissatisfied with the manner in which he was dealt with in terms of the grievance procedure, he could have made use of the machinery of the Act. Schedule 7 item 2(1)(b) of the Act provides that an employer is guilty of an unfair labour practice if it commits any form of unfair conduct relating to the provision of benefits to an employee. A person alleging an unfair labour practice relating to demotion may refer the matter to a council or if no council has jurisdiction to the CCMA for conciliation and arbitration. The first respondent did not make use of any of these procedures.”

[131] If an employee finds herself confronted by conduct which she considers intolerable, but the employee can avoid such (intolerable) conduct by taking some course of action which is reasonably within her power, other than resignation, then the employee should follow such other course of action. To hold that the employee is entitled in such circumstances to resign and claim constructive dismissal would, in my view, undermine the right to fair labour practices enshrined in s. 23 of the Constitution which requires that fairness be viewed from the perspective of both employer and employee.’

Conclusion

[42] Sight should not be lost of the fact that the conduct of Barloworld in introducing the change in the commission structure was not only not occurring for the first time to the applicant but also it is provided for in her employment contract. When she signed that contract she effectively accepted that such new forms of the commission structure may be introduced from time to time as and when the employer deemed it necessary. Furthermore, as the commissioner found, she resigned prematurely when in fact it was open

to her to continue working and marketing the products which the applicant had no contractual right to refuse to market. She is even suggested to have indicated that she did not believe in the products. It was her job to market the products. I can only say that if she operated under the impression that she either had a choice on what to market and what not to market as she pleased, that belief or understanding had no basis in the contract that she entered into with Barloworld.

[43] On a proper consideration of all the evidence that was presented during the arbitration hearing and all the material that was before the commissioner, I am of the view that the applicant’s resignation was not only premature but also unjustified. It seems to me that on the facts of this case, the applicant could complain of an intolerable work environment after it had been implemented and after she would have at the very least, made a serious attempt to do the work she was required to do in terms of the new commission structure and see if it was workable or not. She instead, decided that she would not even try which was very unconscionable, so that she would be able to say that, the situation was unworkable. It is only after the practical realities have manifested themselves to her after the implementation of the new commission structure that she could be in a position to complain that her employer had created an intolerable work environment.

[44] It is in that way that she would have known that with her best efforts her commission earnings fell far below her level of tolerance. The conclusion that she based her decision to resign on a speculative hypothesis of what the new commission structure would entail in real terms is unavoidable in the circumstances. The commissioner correctly found based on all the material that was before her and what the legal position is, that the applicant had failed to discharge the onus resting upon her to prove that she had been unfairly (constructively) dismissed.

[45] When the Constitutional Court in Mvumbi, said that the employee was not required to show that he or she had no alternative but to resign, I do not understand it to have said that the employee must, on the rejection of his or her proposals which he or she considers to be reasonable, she would, without more, be entitled to a finding that she had discharged the onus to prove that she was constructively dismissed by the employer who rendered his or her work environment intolerable. The employee must prove that in his or her circumstances, her work environment had been rendered intolerable by the employer. An unreasonable refusal to accept new changes in the company policy which does not violate the employment contract would make it difficult generally, for an employee to succeed in a claim for constructive dismissal.

[46] In the result, the following order shall issue:

Order

1. The review application is dismissed.

2. There shall be no order as to costs.

M Jolwana

Acting Judge of the Labour Court of South Africa

Appearances:

For the applicant: Mr L. Frahm-Arp Instructed by: Fasken (Incorporated in South Africa as Bell Dewar Inc.) For the first respondent: Mr J. Jones Instructed by: MacGregor Erasmus Attorneys

[1] Section 145 (1) of the Labour Relations Act, 66 of 1995 in part reads: “Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the Commission may apply to the

Labour Court for an order setting aside the arbitration award…”

[2] Section 186 (1)(e) reads: “Dismissal means that an employee terminated employment with or without notice because the employer made continued employment intolerable for the employee”.

[3] Act 66 of 1995, as amended.

[4] Strategic Liquor Services v Mvumbi NO & others [2009] 9 BLLR 847 (CC); 2010 (2) SA 92 (CC) at 94 paras 3-4.

[5] Para 64 of the applicant’s heads of argument.

[6] Bakker v Commission for Conciliation, Mediation and Arbitration and others [2018] 6 BLLR 597 (LC); (2018) 39 ILJ 1568 (LC) at paras 13-16.