The Unholy Alliance: Toxic Workplaces and Constructive Dismissal

In the realm of employment law, there exists an implicit expectation of mutual trust and confidence in every employment contract that an employer will not, without reasonable or proper cause, conduct itself in a manner calculated to destroy or seriously damage the relationship of trust and confidence between the employer and the employee. A breach of this mutual trust and confidence may expose employers to liabilities for constructive dismissal.

With the above in view, in the context of toxic workplaces, constructive dismissal occurs when an employee resigns because the employer's behaviour has become intolerable or heinous, or the employer has made life so difficult that the employee has no choice but to resign. It also occurs when an employer makes life extremely difficult for an employee to frustrate the employee into resigning. This principle has been underscored in several court cases, a few of which are highlighted below:

In the case of Balonwu vs. VSO International (Suit No. NICN/ABJ/280/2018), the claimant, an employee responsible for maintaining compliance and ethical conduct, reported the persistent misconduct of her subordinate, the People and Operation Manager (POM) to some senior managers in the company. However, her complaints were ignored. In retaliation, the POM filed a malicious petition to the same managers against the claimant alleging “bullying and unfair treatment”. The managers not only suspended the claimant's complaint but also prioritized the POM's complaint (which turned out to be false), appointed the claimant's junior to investigate the new petition and reportedly became hostile toward the claimant. The claimant eventually resigned and still faced ongoing humiliation during her notice period. The Court held that the series of actions and inactions of the employer (defendant) had a material and adverse effect on the claimant’s working conditions, such that she could not reasonably be expected to continue in the said employment.

Uboh v. SOSL (Suit No: NICN/LA/600/2012) is also instructive on the subject. Here, the claimant's case was that he arrived 10 minutes late to work due to traffic and was furiously assaulted by the Managing Director. The Managing Director ignored his plea for mercy and ordered the security personnel to remove him from the premises. Despite the humiliation, the claimant continued to report to work to perform his duties, but the security personnel, acting on the Managing Director's orders, denied him entry. The Court held the employer liable for constructive dismissal, emphasizing that “an employer has a corresponding duty to among other things allow the employer an ample opportunity and make the environment conducive to discharge his duties and responsibilities. Where the employee is willing and able, but the employer's conduct becomes both unbearable and intolerable for the employee to discharge his duty; or where the employee is not afforded opportunity and space to discharge his duty under the contract of employment, then such is construed as constructive dismissal”.

Also, while finding the employer liable for constructive dismissal in Akinlolu-Ojo v. UBA (Suit No: NICN/LA/497/2012) the Court stressed as follows: “I must state that there is no room for unwarranted harassment and humiliation of any employee in the workplace. Section 34 (1) (a) of the 1999 Constitution makes provision for the dignity of person for every citizen. I find that the claimant was forced and humiliated into writing a letter of resignation when she had no such intention, having done nothing wrong. She has been injured by the conduct of the defendant. Her integrity, pride, dignity and sense of self-worth have been affected by the defendant's wrongful action. She is entitled to an award of general damages …...”. ?

In conclusion, employers are increasingly recognizing the significant impact of healthy work environments on productivity, job satisfaction, organizational success and risk management. However, the presence of toxic managers within a workplace can significantly undermine these efforts, and employers can be held liable for constructive dismissal if they fail to address toxic managerial behaviour, or if they enable a workplace culture that condones such behaviour. "With great toxicity comes great liability."

In my next (last) post on the topic, I will share what steps employers must take to avoid the legal liabilities stemming from constructive dismissal.

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