The employment relationship
is based on the Law of Contract in that a Contract of Employment governs the
details of the relationship as is prescribed by labour legislation. In the case
of
Sihlali vs SABC Limited, (2010) 31 ICJ 1477 (LC), the trite position
in law was reiterated that resignation is a “unilateral” act. It is however so that almost all Contracts of
Employment require the employee to give notice of termination of employment.
The Basic Conditions of Employment Act prescribes the minimum notice period
which must be given depending on the duration of employment. Resignation in terms of the statutory or
contractual notice period will result in the contract only terminating on the
last day of the applicable notice period. The status of an employee during this
period does not change and therefore an employer has the full right to proceed
with a disciplinary hearing after notice of resignation but before the expiry
of the notice period.
In the matter of
Mtati
vs KPMG Services (Pty) Limited (2017) 38 ILJ 1362 (LC), the employer
was investigating allegations of serious misconduct against an employee. The
employee then decided to resign by giving the prescribed notice, but the
employer, in turn, indicated its intention to continue with disciplinary action
notwithstanding the resignation of the employee. The employee then resigned
again but this time with immediate effect. At the disciplinary hearing, the
point was raised that the chairperson did not have jurisdiction to continue
with the disciplinary proceedings as the employee has resigned. The chairperson
ruled that the hearing would continue, and the employee then walked out of the
disciplinary proceedings which continued in her absence. She was found guilty
of the allegations against her and dismissed. However, at the Labour Court the
Judge held that:
“In my view, the
second letter of resignation of the Applicant changed the status of the
employee from that of being an employee in the ordinary sense of the word, to
that of being the erstwhile employee of the Respondent. This means that the
termination of the Employment Contract with immediate effect took away the
right of the First Respondent to proceed with the disciplinary hearing against
her”. The disciplinary hearing was consequently declared null and void and set
aside.
This aspect also
served before the Labour Court in the matter of
Coetzee vs The Zeitz MOCCA Foundation
Trust and Others (2018) 39 ILJ 2529 (LC), where the focus
was specifically placed on the contractual relationship between employer and employee.
The Judge held as follows:
- An employee is
entitled to resign with immediate effect only in the case of a preceding
material breach of contract by the employer or where the employer accepts the
resignation with immediate effect.
- Statutorily and
contractually the employee in this instance was bound to give at least four
weeks’ notice of his resignation.
- During an employee’s
notice period, there is no legal impediment to the prosecution of disciplinary
proceedings and if warranted, the subsequent dismissal of an employee for
misconduct.
So, in effect, the
only instance where an employee could rely on immediate resignation as a change
of his employment status was where the employer would accept the resignation
with immediate effect (as was the instance with the Steinhoff CEO whose
immediate resignation was accepted by the Board).
By accepting
whether expressly or tacitly a resignation with immediate effect from the
employee, the Court found that the employer has waived his right to proceed
with disciplinary proceedings against the employee.
However, this is
not the final position. In the latest case, in the matter
Tristyn
Naidoo and Sedayshum Naidu vs Standard Bank SA Limited and SBG Securities (Pty)
Limited, case number: J1117/190, the employees sought to challenge the employer’s
jurisdiction to continue with their disciplinary hearing relating to charges of
gross misconduct and dishonesty after they have resigned with immediate effect.
The employer in this instance responded on receipt of the resignations with
immediate effect by stating that they did not accept the resignations and
sought to hold the employees to their notice periods. The Court held that,
where an employee resigns without giving notice, the employee is in breach of
the Employment Contract and because this is a contractual breach of contract,
the employer must, therefore, hold the employee to the contract by seeking an
Order for specific performance. In other words, approach the Court for an Order
to enforce the notice terms of the Employment Contract. The Court then in this
matter went on to state that there is no legal basis for an employer to proceed
with a disciplinary hearing against an employee who resigned with immediate
effect, without first approaching the Court for an Order for specific
performance. In short, it was therefore
held that the resignation with immediate effect brings about an end to the
status of the employee in that the employment relationship, even though it is
in breach of the termination clause, is terminated unilaterally with immediate
effect, and the employer, therefore, has no power or jurisdiction to discipline
the employee after they have resigned with immediate effect.
Conclusion:
From the latest
case law, it seems that an employee can escape a disciplinary outcome by
resigning with immediate effect.
An employer’s
options are:
- Make it clear that you
do not accept immediate resignation. Approach the Court and ask for an Order of
specific performance. However, in practice, I foresee that this would rarely
happen.
- It is important to
remember that in cases of serious misconduct and allegations involving a
criminal element such as assault, theft or fraud, that employers have the right
to report such conduct to the relevant authorities, notwithstanding the
immediate resignation of an employee.
Reference list:
- South African Labour
Guide Article: “I am leaving, no you are fired” – Nicholas M Preston.
S Coetzer. 22 November 2016.
- South African Labour
Guide Article: “You can’t
discipline me I have resigned. Yes, I can” – Gavin Stanfield. 4 July 2017.
- South African Labour
Guide Article: ” Is an employee able to avoid a disciplinary hearing or a
disciplinary sanction by resigning?” Bradley Workman-Davies. 9 October
2018.
- South African Labour
Guide Article: Escape route:
“Resignation with immediate effect” Michael Yeates, Kirsten
Swanepoel. 5 June 2019.
- South African Labour
Guide Article: “The untouchables – disciplining employees after
resignation” – Ndumiso Zwane. 31 July 2018.
- Business Report
Article: “Steinhoff shares nosedive after Markus Jooste resigns” 6
December 2017
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)