Disciplining of employees during Notice Periods

Often employees will resign with immediate effect in order to avoid disciplinary charges. However, can an employee end his or her employment relationship irrespective of a contractual or statutory provision which provide for notice to be given before termination can take effect?

In Standard Bank of South Africa Limited vs Nombulelo Chiloane, the Labour Appeal Court was tasked on ruling on such a matter. In casu, the employee (respondent) was given notice to attend a disciplinary hearing with charges relating to her cashing a cheque without following proper procedures. It was found that the cheque was fraudulent, resulting in a loss to the employer of about R30 000.

On the day she received her notice to attend a disciplinary hearing, she handed in her resignation to her senior Mr. Matlhajoa, effective immediately. Upon consulting Human Resources, Mr. Matlhajoa was informed that the employee was required to serve a four-week notice period as provided for in her contract of employment. Mr. Matlhajoa subsequently informed the employee. She was suspended and the disciplinary hearing set to continue within the employee’s notice period.

During this time various correspondences was exchanged between the employee’s attorneys and the employer, with the employee holding the view that her resignation with immediate effect terminated the employment relationship and as such, the employer was not entitled to proceed with the disciplinary hearing.

On the day of the hearing, the employee and her attorney presented themselves and argued against its continuation on the ground of an absence of an employment relationship. The chairperson rejected this view and proceeded with the hearing. At this point the employee and her attorney left the hearing and the hearing proceeded in the employee’s absence. The employee was subsequently found guilty of the misconduct and summary dismissed.

About two weeks after being informed of her dismissal, the employee brought an urgent application to the Labour Court seeking: (i) an order declaring the decision to dismiss her pursuant to a disciplinary hearing null and void, (ii) interdicting and restraining the employer from enlisting her name on the Banking Association of South Africa’s central database “the Register for Employees Dishonesty System (REDS) and (iii) costs.

The employer opposed the application, inter alia, that the employee’s letter of resignation was not valid because it did not give four weeks’ notice of her resignation as was required in terms of her contract of employment.

The Labour Court found that once an employee hands in her resignation with immediate effect, the employment relationship comes to an immediate end and the employer has no right to insist that the employee serves her notice period. Subsequently the Labour Court declared the employee’s dismissal null and void”.

On appeal, the Labour Appeal Court found, that as a starting point, the employment relationship is governed by either contract, statute, or both. As such, if the parties do not agree to give the other notice, then the Basic Conditions of Employment Act provides that they do so. The Labour Appeal Court found that it was common cause that the parties agreed, in contract, to give four weeks’ notice and as such the employment relationship only terminates once four weeks of notice was given. The parties, however, may agree to forego that agreement.

The Labour Appeal Court further found that the argument that ‘an employee cannot be compelled to continue working for an employer because resignation is a valid unilateral act that comes into effect on the date the employee, so dictates’ is misconceived. In addition, if parties did not agree to give notice, then parties are still required to give such notice as provided for in the BCEA.

The Labour Appeal Court stated:

“Lottering and the judgments that follow similar arguments are clearly wrong. Where termination of employment is in breach of a contractual term which requires the giving of notice or, absent such term, where termination of employment is in breach of the BCEA unless there is an acceptance by the party receiving the non-compliant notice of termination, the terms of the contract or the statute remain valid and binding. This is so “since repudiation terminates the contract only if the innocent party (here the employer) elects not to act on it.”

And

“As counsel for the appellant properly stated, resignation that is not in compliance with contractual notice requirements does not validly terminate the contract of employment unilaterally; it is only the resignation that complies with notice requirements that serves unilaterally to terminate the contract. “

The Labour Court’s ruling was set aside.

What we learn from this case is that a resignation is only effective after notice was served in terms of the contract of employment or statute, unless the parties agree to waive notice periods, or the employer do not seek to enforce the contract or statutory provision. In such circumstances whereby an employee does not serve notice in circumstances whereby the employer requires such notice to be served, the employment relationship is not terminated and the employee may still be subjected to disciplinary action.

It is advisable for employers to ask for the assistance of a professional Labour Relations Specialist when facing employment law difficulties. Tobie Nel is the Managing Director for Effectus Harmony (Pty) Ltd and has over 15 years’ experience in Labour Law. You can contact him, by phone: 0824479512, by email: [email protected]