Our courts have rendered contradictory judgments regarding whether, or not, employers are allowed to schedule disciplinary hearings after an employee has resigned. In the Public sector, due to a prevailing collective agreement, the position is quite clear, an employee may resign at any time prior to a disciplinary hearing being finalised, at which time the disciplinary hearing stops. This enables, wrongly in our view, employees to avoid possible sanction for misconduct, serious or not.
But that’s the Public sector. The position in the private sector has been less clear. On 24 May 2019, the Labour Court, in Tristyn Naidoo & Sedayshum Naidu v Standard Bank SA (Ltd) & 1 other (Case number J1177/19) was once again required to answer this question.
In this instance, the applicant’s challenged the jurisdiction of the respondent “to continue with the disciplinary hearing post their resignation” and to interdict the respondent from proceeding with their scheduled disciplinary hearing post their resignation.
Both applicants had been employed as equities traders up until their resignation. On 4 March 2019, the applicants were issued with notices of precautionary suspension, which noted that “the nature of the allegations against the applicants was serious and that if proven, could impact on the trust relationship between them” and the respondent. After having attended various meetings with forensic investigators, the applicants were issued with notices to attend a disciplinary hearing on 16 and 22 May 2019. Two allegations of “gross misconduct”, and one of “dishonesty” were levelled against the two applicants. The applicants tendered their letters of resignation the same day “with immediate effect”.
Later that day, the applicants received identical correspondence from the employer’s Head of Human Resources, amongst other things, stated that “the Bank is not amenable to accepting your immediate resignation and will still hold you to your 28 days’ notice period as contractually obligated and will be continuing with our internal process. The disciplinary enquiry will therefore proceed as scheduled ..”.
The applicants replied to this by stating that “it is trite in law that my resignation is a unilateral termination of the employment contract and is therefore not subject to Standard Bank’s acceptance or approval. In light of the fact that this is an effective termination of the employment relationship, Standard Bank cannot proceed against any person who is no longer an employee of the company”.
The applicants then approached the Labour Court, which was required to determine whether “the applicant’s immediate resignation had the effect of immediately terminating the employment relationship and whether Standard Bank has the right to hold the applicants to their notice periods and if so, whether it can proceed with the disciplinary enquiries against them despite their resignation with immediate effect”.
In reviewing the effect of resignation in case law, the Court began by referring to Sihlali v SA Broadcasting Corporation Ltd (2010) 31 ILJ 1477 (LC), which held that resignation is a unilateral termination of a contract of employment by the employee. This view was reiterated in Toyota SA Motors (Pty) Ltd v CCMA & others (2016) 37 ILJ 313 (CC), which held that “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 any more”.
The Labour Court held that Standard Bank “has no power to discipline the first and second applicant’s subsequent to their resignation with immediate effect, and Standard Bank was interdicted from continuing with the disciplinary enquiries.
The Court acknowledged that the applicants were in breach of their contracts of employment. However, the remedy available to the ‘employer’ is to either “hold the employee to the contract and seek an order of specific performance requiring the employee to serve the period of notice. Alternatively, the employer may accept the employee’s repudiation, cancel the contract and claim damages”.
The judgment noted, in essence, that holding disciplinary hearings after an immediate resignation, was a form of employer “self-help .. and this Court can’t sanction” such self-help.
So, there we have it, in cases of immediate resignation, an employee does not work out their notice period, and the resignation takes effect immediately.