CAN AN EMPLOYER DISCIPLINE AN EMPLOYEE, DURING THE NOTICE PERIOD, FOR MISCONDUCT?
It is trite that a resignation is a unilateral act by the employee and does not need the employer’s acceptance, however, in the most recent judgment in this regard, it has been held that resignation with immediate effect does not negate the disciplinary process
In the matter of The Standard Bank of South Africa Limited v Nombulelo Cynthia Chiloane (JA 85/18) the Labour Court and thereafter the Labour Appeal Court was, once again, tasked to determine whether an employee can, by means of a letter of resignation, immediately end the relationship with an employer, regardless of the contractual or statutory provisions regarding notice period.
After the employee, in this matter, cashed a fraudulent cheque, which resulted in a loss of approximately R30 000.00 for the employer, the employee was given notice to attend a disciplinary enquiry. On the day that the disciplinary notice was issued, the employee submitted her letter of resignation, in terms of which she resigned ‘with immediate effect’.
In terms of the contract of employment, the employee was required to serve a four week notice period, and the disciplinary enquiry was scheduled to proceed within this notice period.
According to the employee, her resignation ‘with immediate effect’ ended the employment relationship, and it was her view that the employer was not entitled to proceed with the disciplinary enquiry. The employee argued same at her disciplinary enquiry.
However, the chairperson of the disciplinary enquiry rejected this argument and elected to proceed with the disciplinary enquiry, which then proceeded in the employee’s absence. The employee was found guilty of the charges preferred, and she was accordingly dismissed.
On referral to the Labour Court, the Labour Court held that a resignation ‘with immediate effect’ has the result that the employment relationship is terminated immediately, and an employer does not have a right to insist that an employee serves his/her notice period. The Labour Court therefore found the dismissal in this matter, ‘null and void’.
On appeal, the Labour Appeal Court’s (“LAC”) first point of departure was to emphasize the fact that employment relationships are ordinarily governed by contracts and/or statutes, and that the Basic Conditions of Employment Act provides that employers and employees must agree on a notice period. Where there is no agreement on a notice period, section 38 of the Basic Conditions of Employment Act will apply.
In this case, an agreement was reached between the employer and employee that, in order to lawfully terminate the employment relationship, either party had to give the other party four weeks’ notice.
The LAC held further that the argument that resigning ‘with immediate effect’ has the result that an employee is not compelled to continue working for an employer is misconceived, and previous judgements that upheld this argument are clearly incorrect.
In this regard, the LAC highlighted the fact that, unless there is an acceptance by the party receiving the non-compliant notice of termination, the terms of the contract remain valid and binding. Repudiation by the employee can only terminate the contract if the innocent party (in this case the employer) condones the repudiation.
The counsel for the employer correctly submitted that only a resignation that complies with notice requirements serves to unilaterally terminate the contract.
In this matter, the employee’s argument that her resignation was ‘with immediate effect’ was of no consequence since it did not comply with the contract which governed the employment relationship. The employer acted within its rights to proceed with the disciplinary enquiry during the four week notice period.
The decision of the Labour Court was accordingly set aside.
In conclusion, it has been a common practice in the employment relationship for an employee to resign ‘with immediate effect’ in order to avoid the consequences of pending disciplinary action by an employer.
Moreover, South African courts have previously accepted that, as long as an employee resigns ‘with immediate effect’, an employer had no power to compel such an employee to participate in the disciplinary process.
However, from the judgment of the Labour Appeal Court, in the above matter, it is clear that an employer may discipline an employee during their notice period, regardless of whether an employee has resigned with immediate effect, and resigning ‘with immediate effect’ in order to avoid the consequences of disciplinary action does not negate the rights of the employer.