4 February 2022
Resignation is a unilateral act, and it does not need to be accepted by the employer, because of this, it has become a common practice for employees to resign to avoid being dismissed for their conduct and consequences and reputational damage that goes with it.
The question then asked is, if employers can proceed with disciplinary action despite the employee already having resigned with immediate effect and there has been conflicting judgements in recent years as to the answer to this.
In the matter of Naidoo and Another v Standard Bank SA Ltd and Another, employees were issued with notices to attend disciplinary hearings and subsequently resigned with immediate effect. The employer proceeded with the disciplinary hearings based on the fact that he had the right to discipline the employees as they were contractually still within their notice period.
The Labour Court ruled that there was a breach of contract by the employees but concluded that the employer had no power or jurisdiction to discipline the employees, as there was no longer an employment relationship. The Labour Court found that the employer had the right to seek an order of specific performance in terms of the material breach of contract and to hold the employees liable to their notice period.
From this judgment it was clear that employers cannot discipline employees, regardless of the type of offence, after they resign with immediate effect, unless they are successful in approaching the Court for an order of specific performance to give them the right to hold the employee to their notice period. The consequence of this is that employees who committed serious acts of misconduct, including sexual harassment and dishonesty, are not called to face their actions.
In Mthimkhulu v Standard Bank of South Africa, the Labour Court had to reconsider the Naidoo case. The employee attended his disciplinary hearing, was found guilty and resigned before his dismissal was effected. The employer however held the employee to his notice period and proceeded to dismiss the employee. The employee, in turn, brought an urgent application to set aside his unlawful dismissal. The Judge in this ruling found that, premature termination of an employment contract, by an employee, amounts to a repudiation of the contract and subsequently found that the employer has the ability to reject the abandonment of the employment contract by the employee, without having to approach the Court for an order of specific performance.
From this case it became clear that an employer may discipline and dismiss an employee who resigns with immediate effect with the sole purpose of avoiding disciplinary action. The ruling further stated that if an employee repudiates or abandons their contract of employment, the employer can either accept the repudiation and sue for damages or reject the repudiation and hold the employee to their notice period.
Mthimkhulu rejects the previous view of Naidoo and sets out that it would not be necessary for the employer to approach the Court for an order of specific performance and the employer is merely required to notify the employee of its decision of rejecting the employee’s repudiation.
The answer to the question posed was finally settled recently by the Labour Appeal Court in Standard of Bank of South Africa Limited v Nombulelo Cynthia Chiloane. The Court held that the employment relationship does not terminate when an employee resigns with immediate effect if their contract makes provision for a notice period and employers have the right to discipline employees during their notice period, irrespective of whether the employee resigned with immediate effect. In the event that an employee, who is contractually bound to a notice period, resigns without notice, the employer can elect when to end the employment relationship, to either seek to enforce the employee’s notice period, or to waive it.
When deciding on either to proceed with disciplinary action should an employee resign with immediate effect or to accept the resignation and move on, an employer should consider the surrounding circumstances of each case. In some instances, proceeding with disciplinary action after immediate resignation might be a waste of time and resources, however, in certain instances the employer may feel the need, from a professional stance to continue with disciplinary action despite the employee resigning, such would be the case when an employee faces allegations of fraud or dishonesty and a guilty finding would render the employee no longer eligible to be registered with certain bodies, or the employer may have a moral or ethical obligation to proceed with disciplinary action, such would be the case when a teacher is facing allegations of sexual offenses towards minors.
In conclusion, employees cannot resign merely to avoid disciplinary action and employers have the right to proceed with disciplinary action, within the employee’s notice period, should they so wish.
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