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Resigning may not be a safe escape route for erring employees

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Resigning may not be a safe escape route for erring employees

Resigning may not be a safe escape route for erring employees

22nd October 2020

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Resigning in the face of disciplinary action may no longer be an easy way out for employees who commit gross acts of misconduct.

A common escape route for such employees has been to resign with immediate effect. Indications are that some of the legal difficulties employers have had in holding erring employees to account are being cleared out of the way.

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This is according to Sibusiso Dube, senior associate in the Employment Practice of leading African law firm, Bowmans. He was commenting on the most recent Labour Court judgment on the question of employees’ notice periods.

‘The legal implications of resigning with immediate effect in the face of disciplinary action has been the subject of numerous conflicting judgments in the Labour Court in recent years,’ says Dube. ‘While a court of higher status will eventually have the final say on this, the latest Labour Court judgement may offer employers some relief.’

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Before the judgment in Mthimkhulu v Standard Bank, employers wanting to pursue disciplinary action had to go to court for an order of specific performance against an employee who had resigned with immediate effect. 

Dube says this impractical and costly burden is believed to have deterred many employers from proceeding with disciplinary action. ‘The potential result was that employees who are alleged to have committed serious acts of misconduct, such as fraud, theft, sexual harassment and gross dishonesty, could never be called to account.’

This could pose a significant risk for future employers, Dube says, especially in industries such as the banking sector.

Now, the ‘laborious step’ of going to court for an order of specific performance has been done away with by the Labour Court decision on the Mthimkhulu case. 

Karabo Tshabuse, associate in the Employment Practice at Bowmans, further adds that the judgment confirms, as a principle, that an employer has a right to hold an employee to the notice period in terms of the employment contract. It also makes clear the manner in which the employer can enforce its right in this regard. 

The pertinent points are as follows:

  • Where an employee seeks to terminate his or her employment contract prematurely, that amounts to a repudiation of the contract.
  • The employer may then elect to accept or refuse the repudiation.
  • Where the employer accepts the repudiation, the contract comes to an end.
  • Alternatively, where the employer elects not to accept the repudiation, it can hold the employee to his or her notice period. In this instance, the employer is merely required to notify the employee that it wishes to hold him or her to the notice period.
  • The employer may then proceed with taking disciplinary action against the employee during the subsistence of the person’s notice period.

Dube says that this approach is consistent with a plethora of jurisprudence on the subject, and ensures that employees who commit serious acts of misconduct are held accountable for their actions. 

He warns, however, that previous Labour Court judgements on the topic of resignation with immediate effect remain relevant. 

‘As things stand, employers and employees may continue to advance differing arguments based on the available jurisprudence. A court of a higher status will in the future be required to make a pronouncement on the correct and final legal position.’

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