- THE PRESENT LAW
- The Labour Appeal Court (“LAC”) recently rendered a significant judgment on resignation by an employee as a method to avoid disciplinary measures (disciplinary hearing). The matter of The Standard Bank of South Africa Limited v Nombulelo Cynthia Chiloane (JA85/18) (“Chiloane”) is the case in reference, which was handed down on 10 December 2020 by the LAC.
- It has been a long-accepted principle by labour forums that resignation is a unilateral act on the part of the employee which does not require acceptance by the employer. The debate arose where misconducting employees resigned with immediate effect, in breach of their contracts and the stipulated notice periods therein, in order to escape discipline. Will resigning “with immediate effect” allow the employee to escape discipline and a possible “misconduct dismissal” on his/her employment record that will result in a tarnished CV in future? Can the employer accept the resignation but still compel the employee to attend a disciplinary hearing during the contractual notice period? What follows below is a quick review of previous case law, for a fuller understanding on how the law has developed over the last few years, and the current law on this subject.
- THE PREVIOUS LAW
- There have been conflicting views from the Labour Court on the matter of immediate resignation and the employer’s right to convene a disciplinary enquiry during the notice period of the employee. The Labour Court, in different judgements, has ruled that:
- If an employee resigns with immediate effect, there is no longer a contract of employment and hence the employer had no right to discipline the employee;
- Where an employee receives a notice to attend a disciplinary hearing and resigns immediately, the contractual authority to discipline remains;
- An employer cannot proceed with a disciplinary hearing if an employee resigns with immediate effect before the actual commencement of the disciplinary hearing. The employer would need to obtain an order of specific performance from a court in order to compel the employee to honour his/her contractual requirements of notice and consequently attend the hearing, thereby costing the employer in legal fees simply to proceed with a disciplinary hearing for misconduct.
- The matter appears to now be settled by the recent LAC judgement of Chiloane. The LAC was decisive in its verdict that the resignation of an employee that is not in compliance with the relevant notice period does not validly terminate the contract of employment unilaterally. Accordingly, the employee’s resignation only comes into operation when the contractual period of notice expires or, if there is no contract of employment, on expiry of the notice period as stipulated in terms of Section 37 of the Basic Conditions of Employment Act. The employer can of course accept the resignation and waive the required notice period, but this is at the election of the employer.
- In summary of the above, the LAC has ruled that the resignation of an employee with immediate effect does not automatically terminate the employment relationship where there is an agreed upon period of notice in the employment contract. The employment relationship can only terminate at the election of the employer, who may either insist on the notice period or choose to waive it. Should the employer choose to enforce the notice period, disciplinary measures may still proceed during the period of the notice. If there is no written contract of employment, the employer may elect to follow the notice periods as promulgated in the Basic Conditions of Employment Act, and hence still proceed with disciplinary action during such period.
- It is no longer a requirement for an employer to have to approach the court for an order of specific performance, as was ruled in the Naidoo matter (see Footnote 3).
- We submit that this finding of the LAC is the correct interpretation in terms of the law, and it should not be a requirement for an employer to have to approach the courts in order to enforce and maintain disciplinary measures in the workplace.
The content of this article is to provide general guidance and understanding on the subject matter and should not be construed as providing full legal advice on the topic. Detailed specialist advice should be sought for specific situations.
BSoc Science, LLB, AdvDip in Labour Law
Labour Law Department
Phone: 012 361 9823
 Mtati v KPMG Services (2017) 38 ILJ 1362 (LC).
 Mzotsho v Standard Bank of South Africa J2436-18 / 24 July 2018 (unreported).
 Naidoo and Another v Standard Bank of SA and Another (2019) 40 ILJ 2589 (LC).
 Basic Conditions of Employment Act 75 of 1997.