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Resignation with immediate effect in the face of misconduct allegations, what does our Labour Appeal Court say?

Fasken
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The question of whether an employee can resign with immediate effect and end the employment relationship with his/her employer irrespective of the contractual or statutory provisions which provide for notice to be given, has finally been resolved by the Labour Appeal Court. 

In Standard Bank of South Africa Limited v Nombulelo Cynthia Chiloane, the employee was given notice to attend a disciplinary hearing by her employer, Standard Bank, and was alleged to have cashed a cheque without following proper procedures.  The cashed cheque was later on discovered to be fraudulent, causing Standard Bank financial loss.  On the same day that the employee received the notice to attend the disciplinary hearing, she tendered a written letter of “resignation with immediate effect” to her superior. 

The employee was later informed by her superior that she was required to serve her four week notice period as provided for in her contract of employment.  The employee was on suspension at the time and she was informed that the scheduled disciplinary hearing would continue, as it would fall within the employee’s contractual notice period.

In correspondence exchanged between Standard Bank and the employee’s attorney, the employee maintained her view that her letter of resignation with immediate effect stood as ending the employment relationship with immediate effect and accordingly, Standard Bank was not entitled to proceed with the disciplinary hearing.

Despite the employee’s objection, the disciplinary hearing nonetheless continued in her absence and the presiding chairperson found the employee guilty of the misconduct and recommended a sanction of summary dismissal. Standard Bank, as a result, accordingly dismissed the employee.

After having been informed of her dismissal, the employee instituted an urgent application in the Labour Court seeking an order that her dismissal is to be held to be invalid.  Standard Bank, in turn, opposed the application on the basis that the employee’s letter of resignation was not valid because she had not given the required notice in terms of the notice provision provided for in her contract of employment.

The Labour Court held that a resignation with immediate effect terminates the employment relationship immediately and an employer is not entitled to require an employee to serve his/her notice period.  Accordingly, the Labour Court declared the employee’s dismissal pursuant to the disciplinary hearing null and void.

On appeal, the Labour Appeal Court reiterated that employment relationships are governed by contracts and/or statutes.

If the contract of employment is silent on the issue of contractual notice, then the Basic Conditions of Employment Act (BCEA) has application.

The Labour Appeal Court, having closely considered various judgments previously handed down by the Labour Court on the issue, confirmed that where an employment contract provides for a particular notice period, an employee is obliged to give notice for the period provided in the contract. 

The contract of employment, and reciprocal obligations contained in it, only terminate when the period specified expires.  In the absence of a contractual term, the parties are bound by the statutory notice provisions provided for in the BCEA.

This judgment confirms the rights of employers and employees in respect of discipline where an employee tenders resignation with immediate effect in the face of misconduct allegations or pending disciplinary action.  Importantly, in light of the latter, an employee’s resignation with immediate effect does not preclude an employer from proceeding with disciplinary action during the employee’s notice period (as regulated either by the contract of employment or the BCEA).

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