Resignation to Avoid the Chopping Block

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The moot question as to whether an employer may lawfully proceed with and conclude disciplinary proceedings against an employee, post-resignation, before the end of the employee’s notice period, is now settled.

What was known as a trite legal position was disturbed in the Labour Court matter of Kalipa Mtati v KPMG Services (Pty) Ltd . In Kalipa, the Labour Court held that a Chairperson of a disciplinary enquiry does not have power to make a dismissal determination, if an employee resigned with immediate effect, before the conclusion of a disciplinary hearing. The impact of Kalipa, if followed, is that the employer is disempowered from flexing its disciplinary arm, even if an employee breaches the statutory or contractual notice period.

It was brought to light in a recent judgment of the Labour Court in the matter of Mark Michael Coetzee v the Seidz Mocaa Foundation Trust and others , a judgment of the Labour Court determined by Judge Rabkin-Naicker that:

• The Kalipa judgment has been overturned on appeal by the Labour Appeal Court. Accordingly, insofar as
Kalipa conflicted with the application of law, it is no longer persuasive authority.

In the Coetzee case, the Court cited with approval the matter of Vodacom (Pty) Ltd v Motsa and another determined by Van Niekerk J, that the following legal position is correct and stands as good law:

“(19) The principles that regulate a resignation are well established. Resignation is a unilateral act (C Sihlali vs Broadcasting Commission Ltd [2010] 31 ILJ 1477 (LC)). When an employee gives the required notice, the contract terminates at the end of the notice period. When an employee leaves his/her employment, without giving the required period of notice, the employee breaches the contract. Ordinary contractual remedies dictate that the employer may hold the employee to the contract and seek an order of specific performance requiring the employee to serve the period of notice. Alternatively, the employer may elect to accept the employee’s repudiation, cancel the contract and claim damages. Of course, it is always open to the parties to terminate an employment contract on agreed terms and for either of them to waive whatever rights they might otherwise have enjoyed.”

In the Vodacom case, the issue at hand concerned a dispute over a post-employment restraint covenant. The employer sought to enforce the contractual notice period during which the employee was placed on “garden leave”. The Court held that an employer is entitled to require an employee to remain at home on “garden leave” for any period of contractual notice, and that the employee is prohibited during that period from working for anyone else. Such leave is an exercise of the employer’s contractual right. Reasonableness of any restraint covenant may be assessed by a Court of law to vary restraint periods.

In the Coetzee case, the Court cited the obiter dictum of Zondo J. (as he then was) in his dissenting judgment in the matter of Toyota SA Motors (Pty) Ltd vs CCMA and others: Zondo J. (as he then was) said the following:

“(144) Since an employee has no right of withdrawing a valid and lawful resignation, once it has been communicated to the employer, except with the consent of the employer, this means that as the date of dismissal, Mr Makhotla was bound to leave Toyota’s employee on 31 March 2011. As already indicated, Mr Makhotla was dismissed a few days before his resignation would take effect. One can, therefore, say that the dismissal interrupted the resignation. That is why we cannot say that Mr Makhotla’s employment with Toyota came to an end as a result of his resignation. We say that it came to an end as a result of his dismissal on 24 March 2011. However, the fact that Mr Makhotla’s employment came to an end as a result of dismissal and not as result of resignation, does not mean that the fact that he was dismissed at the time when he submitted a letter of resignation and was serving his notice period, was due to leave Toyota’s employ in seven days’ time is irrelevant. The fact that Mr Makhotla was dismissed at a time when, in seven days’ time his contract of employment with Toyota could have come to an end by his resignation, and he could have left Toyota’s employment is highly relevant if his dismissal dispute is arbitrated or adjudicated after the date when he would have left Toyota’s employ, had he not been dismissed.”

In the Coetzee case, the Court confirmed the legal position to be that as set out in the Vodacom case cited above.

The implication of the Coetzee case and the Labour Appeal Court’s decision to overturn the judgment of the Labour Court in Kalipa, is that an employer may lawfully proceed with disciplinary action against an employee, despite an employee’s resignation as long as the proceedings take place and is concluded within the employee’s notice period.

The position in law is that it falls within the province of the employer’s managerial prerogative to make the election as to whether or not to proceed with disciplinary action during an employee’s notice period.
Employees who resign to avoid the chopping block and who without just cause, refuse to participate in disciplinary proceedings, will not be entitled to complain about procedural unfairness.