We have accepted for a very long time that the decision to terminate an employment relationship by means of a resignation constituted a unilateral act effected by the employee. This meant that employees could either resign “with immediate effect”, or by giving notice, whereafter they worked out the notice period if so required.
When the Labour Court held in the matter of Kalipa Mtati v KPMG Services (Pty) Ltd J2277/16 that an employer loses the right to discipline an employee who resigns “with immediate effect”, a number of employees may have heaved a sigh of relief.
This principle brought only temporary respite because in 2018 the Labour Court held in the matter of Coetzee v Zeitz Mocaa Foundation Trust and Another (C517/2018) that an employee’s contract only terminated at the end of the notice period. This meant that the employer could proceed with such a hearing for the remainder of the notice period.
The Zeitz Mocaa Foundation Trust decision was, however, short lived because in 2019 the Labour Court held that the employer could only proceed with the disciplinary hearing after it had approached the court for an order to compel the employee to serve out the required notice period.
The uncertainty created by these conflicting judgments came to an end on 10 December 2020 when the LAC handed down the judgment in the matter of Standard Bank of South Africa Ltd v Nombulelo Chiloane (JA85/18).
After Ms Chiloane was dismissed in absentia following her election not to attend her hearing as she believed her resignation “with immediate effect” had terminated the employment relationship, she turned to the Labour Court where her dismissal was declared “null and void”.
Standard Bank appealed against the decision of the Labour Court.
The LAC held that the understanding that an employee who had resigned “with immediate effect” could not be compelled to work out the notice period, was “misconceived” because the terms of the contract remained valid and binding on that employee. The employee would only be released from these terms if the employer elected not to hold the employee to their contractual agreement which required either party to give notice of a termination.
The LAC went further and said in paragraphs 14 – 20 that if the notice period was not agreed in the contract, it would be regulated by the notice period as provided in the Basic Conditions of Employment Act (BCEA), sections 37 and 38.
This decision means that employers may continue to subject employees to disciplinary hearings for the duration of the notice period agreed in the contract of employment or in terms of the BCEA.
It would be fair to say that the LAC has now firmly closed the escape hatch on which so many employees relied when resigning “with immediate effect”.