It is trite that a resignation is a unilateral act by an employee that does not require the employer’s acceptance. The employment contract usually makes provision for notice periods that an employee must work subsequent to him resigning. If a contract of employment does not make provision for the notice period that must be worked, an employee must still, by operation of law, work a notice period in terms of Section 37 of the Basic Conditions of Employment Act. An employee’s notice period may, however, be waived by the employer, but should the employer not waive this, the employee must still work his notice period.
What happens when an employee acted in a way that warrants dismissal but resigns “with immediate effect” in an attempt to evade disciplinary measures being taken against him? Previously, our labour courts have had conflicting views regarding the employer’s right to institute disciplinary measures against an employee who resigned “with immediate effect”. In the 2017 Labour Court case of Mtati v KPMG Services, the Court held that when an employee resigns with immediate effect, the contract of employment is terminated, and the employer has no right to discipline such employee.
In the 2018 case of Mzotsho v Standard Bank of South Africa, the Labour Court held that if an employee resigns immediately after receiving a notice to attend a disciplinary hearing, the employee is contractually bound by his employment contract and must attend the disciplinary hearing. It is highly unlikely that an employee will voluntarily agree to attend a disciplinary hearing after his resignation. This issue was dealt with in the 2019 case of Naidoo v Standard Bank of SA and Another, where the Labour Court held that if an employee refuses to attend a disciplinary hearing by virtue of his resignation, the employer must approach a Court and obtain an order of Specific Performance compelling the employee to honour his contractual obligations, same of which is a very costly exercise.
On 10 December 2020, the Labour Appeal Court handed down a ground-breaking judgment in the case of Standard Bank of South Africa Limited v Chiloane in which the issue of resignation to avoid disciplinary measures seem to have been settled. The Court held that resignation with “immediate effect” does not validly terminate the contract of employment and will only be terminated if the employer accepts the resignation and waives the notice periods. If the employer chooses not to waive the notice period, the employee remains contractually bound, and his employment contract only terminates after the notice period. The Court also found that it is not necessary for the employer to approach the courts for an order of specific performance, and should the employee refuse to attend the disciplinary hearing, the hearing may proceed in his absence, and upon being found guilty, he may still be dismissed.
Employees can thus no longer resign with immediate effect to avoid disciplinary actions. An employee’s resignation with immediate effect is therefore only valid if the employer accepts the resignation and waives the notice period.
Article by: Etienne Fourie
Dispute Resolution Official – East London