RESIGNATION WITH IMMEDIATE EFFECT

In light of the new judgment handed down by the Labour Appeals Court on 10 December 2020, this common practice will soon fall away.

In its judgment in the matter of STANDARD BANK LIMITED v NOMBULELO CYNTHIA CHILOANE (LAR JA85.18),  the Labour Court of Appeals provided clarity on this subject. It confirmed that it is mandatory for an employee to server his/her notice period, unless such period is waived by the employer.

CASE SUMMARY

In the above-mentioned case, an employee had been given notice to attend a disciplinary hearing for failing to adhere to her employer’s protocols and procedures. The employee had cashed a fraudulent cheque, resulting in a loss to the employer. Upon receiving notice of a disciplinary hearing, the employee handed in her letter of resignation containing the words “resignation with immediate effect”.

The employee had been informed by her employer that her resignation with immediate effect was in direct contravention of her employment contract which required a four-week notice period. As a result her resignation was not accepted.

The employee attended the disciplinary hearing, argued that the employer/employee relationship no longer existed as her resignation was with immediate effect.  She left the hearing which continued in her absence. She was found guilty of the charges accused off and summarily dismissed. 

This resulted in the employee launching an urgent application in the Labour court seeking, inter alia, “an order declaring the decision to “dismiss her pursuant to a disciplinary hearing null and void”. 

FINDINGS OF THE LABOUR APPEAL COURT 

In assessing the issue at hand, the Court reiterated that an employee/employer relationship is governed by the terms of the employment contract or by statute, or both. 

The Labour Appeal Court confirmed that if it is an expressed term of the contract that a notice period is required to terminate employment, such term must be complied with, unless the party receiving the notice agrees to not enforce such term. 

The Court found that “resignation with immediate effect” had no meaning as the employee was bound by the terms of her employment contract. Accordingly, the application brought by the employee in the Labour Court had been dismissed.

WHAT DOES THIS MEAN FOR EMPLOYERS AND EMPLOYEES ?

Simply put an employer is not obligated to accept a resignation with immediate effect and employees can no longer “escape a disciplinary hearing” by resigning with immediate effect.