By Teboho Mokoena

Through this column, we look at a myriad of topical issues that crop up in the workplace.

The question that arises is: Can one, in general, resign with immediate effect? Or specifically, can one resign with immediate effect when one is served with a notice to attend a disciplinary inquiry?

The case in question was heard in the Labour Appeal Court (LAC). Parties involved were Standard Bank (Appellant) and Nombulelo Cynthia Chiloane (Respondent). The matter was heard on 5 November 2020 and the judgment was handed down on 10 December 2020.

According to court records, Chiloane was given notice to attend a disciplinary inquiry. She was reported to have cashed a cheque without following proper procedure. It later transpired that the cashed cheque was fraudulent, and her employer incurred a loss of about R30,000.

On the day Chiloane received the notice to attend the disciplinary hearing, she handed her resignation letter to her superior, Matlhajoa. In the letter, Chiloane stated that she was “resigning with immediate effect”.

Matlhajoa accepted the letter and informed her she would speak to a Human Resource official as she did not know what to do under the circumstances.

Matlhajoa duly consulted with Human Resource and was told that Chiloane was required to serve a four-week notice period as stated in her employed contract.

Chiloane was further informed that in light of the fact that she was currently on suspension, she only needed to report daily to her employer, via a telephone call, as per her conditions of suspension.

The employer further informed Chiloane that the envisaged disciplinary hearing would continue as it was scheduled to take place during her notice period.

On the day of the hearing, Chiloane and her representative were present at the inquiry. But they objected to inquiry proceedings and argued that, based on their understanding her resignation “with immediate effect” had, in essence, terminated the employment relationship.

Therefore, the employer had no grounds to proceed with the inquiry.

The presiding officer at the hearing rejected this argument and proceeded with the inquiry. At this point, the employee and her attorney left the inquiry and it proceeded in their absence.

Chiloane was subsequently found guilty and summarily dismissed, by way of a sanction. The outcome of the hearing was relayed to her.

Chiloane 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” and (iii) costs.

On the other hand, the employer opposed the application, among others, and critically so.
Chiloane’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.

The employer argued that her resignation was not in compliance with contractual notice requirements and does not unilaterally terminate the contract of employment.

It is only the resignation that complies with notice requirements that serves unilaterally to terminate the contract.

But the Labour Court (LC) held that once an employee hands in a letter indicating that the resignation is with immediate effect, the employment relationship comes to an end immediately and the employer has no right to insist that the employee serves his/her notice period.

The LC went on to declare the employee’s dismissal pursuant to the disciplinary hearing “null and void”.
The matter was then escalated to the LAC. In summary, the LAC found in favour of the employer. The basis of their finding is as follows:
Firstly, the LAC, placed reliance, and rightly so, on Section 37 of the Basic Conditions of Employment Act (BCEA).
Sec 37 provides that:
(i) Subject to Section 38 ,a contract of employment terminable at the instance of a party to the contract may be terminated only on notice of not less than: one week, if the employee has been employed for six months or less.
(b) two weeks, if the employee has been employed for more than six months but not more than one year, four weeks, if the employee has been employed for one year or more…

In essence, the LAC, and this can be deduced from the court records, that in light of the fact that Chiloane had been employed for more than a year, she was, by law, compelled to serve a notice period of four weeks.
The LAC further stated that, while bearing in mind the above BCEA provisions, in the event that the party receiving the notice of termination expressly decides to forgo the said terms of the agreement, the notice
period contained in the contract remains valid and binding, and as such, has to be complied with.

Now, as we shall remember, Chiloane’s line manager, upon receipt of her letter of resignation “with immediate effect”, consulted the Human Resource unit and was informed that, contractually, Chiloane had to serve a four-week notice period.

It is therefore clear that in this instance, the employer had elected not to forgo the contractual terms agreed to with Chiloane and sought refuge, as it were, within the above-stated provisions of the BCEA.
Grogan (2005, Workplace Law, 8th Edition), concurs with the LAC when he states that:
“Employees are obliged to work through a notice period, unless the employer exempts them from this obligation in which case, they must be paid in lieu of the notice.”

The LAC also made reference to the matter of Steenkamp & others v Edcon Ltd (National Union of Metal workers of SA intervening (2016)37ILJ564(CC), wherein the Constitutional Court held that:
“Except where summary dismiss alis warranted, the unilateral act of the employer in terminating the contract, whether by notice or other conduct, does not without more bring an end to the contract of employment. The same applies to an employee who gives short notice in violation of the contract: he or she may be obliged to serve out the notice period. In neither case does the unlawful repudiation of the contract have to be accepted by the other party.”

In closing, I have come across numerous cases where employees, who are facing disciplinary inquiries, elect to resign with immediate effect.

One can reasonably postulate that they do so in order to avoid going through the pending hearings. This case, and more importantly, the Steenkamp matter, which was decided at the apex court, unequivocally tells us that one must look at the terms and conditions of one’s employment contract before deciding on an appropriate course of action when confronted with a situation such as Chiloane’s.