Resignation revisited once again!

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After Naidoo and a fellow employee resigned from Standard Bank with immediate effect, they were told that the employer would continue with their disciplinary hearings nevertheless. In the circumstances they approached the Labour Court on an urgent basis.

Case law history of resignations with immediate effect

When the Labour Court was called upon to determine the matter of Naidoo and Another v Standard Bank SA Ltd and Another (J1177/19) [2019] ZALCJHB 168, two other Labour Court decisions relating to resignations with immediate effect had already left their mark.

It was held in the matter of Mtati v KPMG Services (October 2016) that the employer could not proceed with the disciplinary hearing following a summary resignation, as the resignation terminated the employment contract.

When the court handed down the decision in the matter of Coetzee/ v Zeitz Mocca Foundation Trust and Others (June 2018) a different approach was adopted in that the court held that contractually and statutorily an employee’s contract of employment comes to an end only once his resignation takes effect at the end of his notice period.

By resigning with immediate effect, an employee is in breach of contract. At this point it is up to the employer to hold the employee to the contractual notice period.  Alternatively, the employer may accept the resignation, cancel the contract and claim damages.

Coetzee’s employer elected to hold him to the notice period stated in his contract. In practical terms this meant that the employer could continue with a disciplinary hearing during the notice period as the employment contract had not yet come to an end.

The Standard Bank decision is the third decision that deals with the same issues.

Facts

The applicants tendered their respective resignations as Equities Traders at Standard Bank with immediate effect when they were instructed to attend a disciplinary hearing where the would face charges relating to gross misconduct and dishonesty.

Standard Bank did not accept the letters of resignation and the applicants were informed that they were required to work out the notice period, and that the disciplinary hearing would take place during that period. They were told that if they failed to attend, their respective hearings would proceed in their absence.

They approached the Labour Court to interdict the bank from proceeding with a disciplinary hearing against them. They inter alia argued

  • That the employer had cleared their workstations and removed the furniture while they were suspended from work. This indicated to them that the employer was intent upon terminating their services;
  • The chairperson of the disciplinary hearing was an attorney on the bank’s panel and therefore they had reason to believe that they would not be afforded a fair hearing;
  • HR told them in an email that if they were found guilty, their names would be entered into the REDS register;
  • The bank was precluded from proceeding with the disciplinary hearing as the employment relationship had terminated.

The court had regard to the various judgments in which decisions relating to the question of resignation were handed down.

It relied on the authority of the Constitutional Court judgment in the matter of Toyota SA Motors (Pty) v CCMA and Others  (CCT 228/14) [2015] ZACC 557 (15 December 2015)   where the Zondo J held (in a minority judgment)s:

[142]  ‘Where an employee resigns from the employ of his employer and does so voluntarily, the employer may not discipline that employee after the resignation has taken effect. That is because, once the resignation has taken effect, the employee is no longer an employee of that employer and that employer does not have jurisdiction over the employee anymore.’

The court per Nkutha-Nkontwana J concluded that:

[29]       I have already alluded to the fact that resignation with immediate effect, as in this case, brings about an end to the employment relationship in breach of the termination clause. Whilst I sympathise with Standard Bank, it is not without remedies but self-help is not one of them and this Court cannot sanction it.  Once the employer elects to hold the employee to the terms of the contract, it must enforce that election by means of a court order.

Reason for the decision

Paragraph [19] of the judgment is at the heart of the reason for the decision:

[19]       At this juncture, it is apposite to deal with the misconception amongst employers that they have a right to refuse to accept a resignation  –  this is flawed and was frowned upon by the Court in Sihlali where the Court held at paragraph [11] such conduct to amount to a form of indentured labour: it said:

‘If resignation to be valid only once it is accepted by an employer, the latter would in effect be entitled, by a simple stratagem of refusing to accept a tendered resignation, to require an employee to remain in employment  against his or her will. This cannot be-it would reduce the employment relationship to a form of indentured labour’.

The importance of this judgment

This decision has confirmed the principles in both the KPMG and the Zeitz Mocca Foundation Trust decisions in such a way that the apparent contradictions have been clarified.