Can an employee avoid a disciplinary action on their record by resigning with immediate effect? Like any relationship in life, things sometimes go sour. When that relationship happens to be the employee/employer relationship, there are a number of laws that govern what the rights of each party is, and how they can remove themselves from the relationship.
In my 4 decades of working in the labour law field, this is a question that has often cropped up.
The short answer is no, you cannot avoid dismissal and disciplinary hearings by resigning, but it is important to understand the reasons why, as there are nuances to this that could affect the outcome of the situation.
Common law in South Africa holds that when an employee resigns with immediate effect, it is a unilateral decision that immediately breaks the employer/employee relationship and at the same time any contractual agreements between the two.
This has led to a situation where it is common in South Africa for employees to resign as a way to avoid disciplinary action, since the employer loses the right to compel the employee to appear for a hearing, but a recent case in the Labour Appeal Court (LAC) has muddled the waters on this assumption.
The case of Standard Bank of South Africa Limited versus Nombulelo Cynthia Chiloane
Background
In the recent article on Moneyweb, the case of Standard Bank of South Africa Limited versus Nombulelo Cynthia Chiloane was highlighted. Ms Chiloane, the employee, failed to follow procedures that led to the employer suffering financial loss. The employer then sought to charge the employee with misconduct that could result in dismissal. This case had more dire consequences for the employee, should she be found negligent, as it could mean she would be placed on the Register of Employees Dishonesty (REDS) system. This would bar her from working in the financial sector in South Africa again. Deciding that the stakes were too high, Ms Chiloane decided to rather resign instead of taking the chance of getting blacklisted in her industry.
This resignation was initially accepted by her superior, but after consulting with the HR official, the superior was informed that the employee was still under written contract of employment for her notice period, and that the hearing would go ahead.
The hearing
On the day of the hearing, the employee and her representative attended but contended that it was unable to go ahead, as the resignation was initially accepted and that there was no relationship anymore that could compel her to attend or be disciplined. The employer disagreed and went ahead with the hearing, where the decision was taken to dismiss the employee.
Labour Court ruling
The case was then referred to the Labour Court, where the court agreed that the employer was in the wrong and that there was no relationship anymore, therefore the employer could not “dismiss” someone who was not in their employ anymore.
Appeal
Following this outcome, the employer went ahead and referred the case to the Labour Appeal Court (LAC) and this is where it becomes interesting. The LAC ruled that the “resignation with immediate effect” was of no consequence, since the employment contract was a mutual decision that stated the employee would serve 4 weeks notice after resigning.
According to the LAC, the employee does not have the right to unilaterally override the mutual agreement, and that she was still an employee with all relevant rights and responsibilities for the duration of the notice period. This meant that the employer had full right to go ahead with the disciplinary hearing and the subsequent dismissal.
Consequences of the ruling
This creates a problem, since it essentially means that, unlike it is commonly accepted, the LAC confirmed that the “resignation with immediate effect” does not terminate the employment relationship where the employee’s contract of employment provides for a notice period. As long as an employer wishes to hold an employee to such a notice period, they will have the right to do so, including bringing disciplinary action against the employee during this time.
So, after all of that, let us visit the question again, can you resign to avoid dismissal or disciplinary action?
The answer is.. it depends. If the employer accepts your resignation with immediate effect then both parties agree that the relationship is terminated and you are not held to any further instructions from the employer. If, however, the employer does not accept the “immediate effect”, you are still in the employ of that employer for the duration of your notice period as stated in your employment contract.
Can an employer force you to continue working for the company during your notice period when you resign with immediate effect?
No, but they may go ahead with disciplinary action for absconding, and even “dismiss” you during this time. For most people this will probably not be a big problem, as the relationship has probably turned sour by then, but you need to consider the impact of this on your record, as in the case of Ms Chiloane where she could be blacklisted in her industry.
In most cases where an employee resigns with immediate effect it would be unwise for an employer to force the employee to show up for work, as you would have an obstructive, and possibly destructive, person on your premises.
Can an employer conduct disciplinary hearings and dismiss an employee after the employee resigned?
Yes, provided that there is a notice period in the contract and that the disciplinary action is scheduled during this period.
Can an employee be dismissed in their notice period?
Yes, provided the employer did not accept the resignation “with immediate effect” and insisted that the employee work the notice period.
Should you, as the employer, go ahead with disciplinary actions during the notice period?
This would depend on the merits of the decision. In the case explored above there was serious mismanagement and dishonesty, and the employer wanted to make sure this person is blacklisted in the financial sector. It was therefore in their interest to forge ahead with the hearing and subsequent appeal.
Dismissal cases that end up at the CCMA can be expensive to the company, and it is no secret that the CCMA leans heavily toward the rights of the employee.
In recent case **(CASE (20/11/19 ), the employer referred a case to the Labour Court for a reduction in compensation after the employee won a CCMA case and was awarded 8 months compensation. The Labour Court reduced the compensation since the employee tendered her resignation before the dismissal, and the Labour Court wrongly assumed this was a voluntary act.
The employee then referred the case to the Labour Appeal Court (LAC) on the grounds that the Labour Court (LC) had no proper grounds to interfere with the discretion of the arbitrator, and the LAC agreed. The LC judgment was set aside and the award was restored.
Essentially, my advice to any employer would be to only go ahead with disciplinary action if there is a very good reason*, and then make sure every single procedure is followed to the letter.
*to make a point is never a good reason
**Referenced Case Details
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA 41/2018
In the matter between:
RONÈ BESTER (SCOTT) Appellant
(Third Respondent in
court a quo)
and
In re:
SMALL ENTERPRISE FINANCE AGENCY SOC LTD Applicant
THE COMMISSION FOR CONCILIATION
MEDIATION AND ARBITRATION First Respondent
L NOWOSENENTZ N.O. Second Respondent
RONÈ BESTER (SCOTT) Third Respondent
Held: 20 November 2019
Delivered: 11 December 2019