Member Article

In a previous ENSight, we discussed the decision of the Labour Court in Mtati v KPMG Services (Pty) Ltd. In this case, it was decided that employees may not be disciplined if they have resigned “with immediate effect”. The resignation is regarded as terminating the contract of employment immediately and the consequence is that the employer is denied the opportunity to pursue disciplinary action against the employee. A subsequent dismissal will be null and void. This judgment has been criticised and is considered to be controversial. 

The Mtati judgment was recently considered in the judgment in Mark Michael Coetzee v The Zeitz Mocca Foundation Trust and Another. During the course of a meeting between the applicant employee in this matter and representatives of his employer that took place on 15 May 2018, the employer’s representative handed the applicant a document, in terms of which he was suspended, as well as a letter in terms of which he was given the opportunity to respond to certain disciplinary charges brought against him. It was made clear that this opportunity constituted a disciplinary hearing as envisaged in the Code of Good Practice: Dismissal. A further meeting then took place between the applicant and the employer’s representatives on 16 May 2018. What occurred at this meeting is the subject of dispute. 

The applicant then approached the Labour Court on an urgent basis seeking the following relief:

• a declaratory order to the effect that the disciplinary process instituted by the employer against the applicant was unlawful, invalid and of no force and effect; or
• an order interdicting and restraining the employer and its trustees from continuing and finalising the disciplinary process instituted against the applicant in light of the applicant’s resignation from employment with immediate effect; and
• an order declaring that the employer had no jurisdiction to discipline the applicant and interdicting the employer and its trustees from continuing with the disciplinary inquiry following the applicant’s unequivocal and immediate resignation without notice.

The relief sought was based on the allegation that, at the meeting on 16 May 2018, the applicant had resigned with immediate effect. The court refused to grant the applicant the relief sought. It did so on the basis that the employer had not, on the facts as established in the affidavits, accepted the dismissal with immediate effect. 

The principle that an employer may accept or agree to a resignation with immediate effect is not controversial and this case therefore differs from the decision in Mtati where it was held that dismissals with immediate effect are permitted even if the employer does not agree to this. 

However, during the course of its decision, the court referred to the Mtati judgment. It pointed out that the Mtatijudgment had recently been overturned on appeal. As a consequence, the court held that the Mtati judgment was “no longer persuasive”. It referred to the following excerpt from the decision in Vodacom (Pty) Ltd v Motsa and another as a correct statement of our law:

“[19] The principles that regulate a resignation are well-established. Resignation is a unilateral act; see Sihlali v South African Broadcasting Corporation (J799/08; 14 January 2009)). When an employee gives the required notice, the contract terminates at the end of the notice period. When an employee leaves his or her employment without giving the required period of notice, the employee breaches the contract. Ordinary contractual rules dictate that the employer may 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 elect to accept the employee’s repudiation, cancel the contract and claim damages. Of course, it is always open to the parties to terminate an employment contract on agreed terms and for either of them to waive whatever rights they might otherwise have enjoyed.”

It also referred to similar views expressed in an obiter statement by Zondo J in Toyota SA Motors (Pty) Ltd v Commission of Conciliation, Mediation and Arbitration.

This approach remains controversial as the argument can be made that an employee may be forced to work his or her notice period. Critics argue that the effect of such a judgment is akin to condoning forced labour or slavery. 

The decision in Nogoduka v Minister of the Department of Higher Education & Training and Others is also of interest in this regard. In this matter, the High Court had to consider section 16B(6) of Public Service Act, 1994 (the “PSA”), which provides:

“if notice of disciplinary hearing was given to an employee, the relevant executive authority shall not agree to a period of notice of resignation which is shorter than the prescribed period of notice applicable to the employee”.

The employee in this matter also resigned with immediate effect prior to a disciplinary hearing taking place. The disciplinary hearing took place in his absence and he was dismissed. He subsequently sought an order in the High Court in terms of which he, inter alia, sought to have his dismissal reviewed and set aside. His argument appears to have been that the employer had accepted his resignation. The High Court held that it had the necessary jurisdiction to consider the dispute as it was empowered by section 77(3) of the Basic Conditions of Employment Act, 1997 to do so. The court held that section 16B(6) of the PSA was specifically included to avoid situations where employees, upon being notified of disciplinary action, would resign with immediate effect and avoid the adverse consequences of a disciplinary hearing. The court held that the PSA did not permit the employer to accept the resignation of the employee as the employee was obliged to serve his notice period. Therefore, the employer was entitled to discipline the employee as he was still employed during his notice period.

In conclusion, while employers in the private sector may agree to accept notices of termination with immediate effect, thus negating any agreed notice periods, employers who fall within the ambit of the PSA may not do so. Should an employer in the private sector not want to agree to such an immediate termination, and want to proceed with disciplinary steps, it should do so as soon as possible so as to complete the process prior to the expiry of the period of notice.