Can an Employee Resign to Avoid Disciplinary Action? (Law@Work)

March 2020

Employers often ask about the legal rules that apply in the situation where an employee chooses to resign rather than to face a disciplinary hearing.  The starting point is that Employers are legally permitted to discipline their employees when they commit misconduct.  If found guilty thereof, the employee’s employment record will be tarnished, and it might even be difficult for them to find employment.  It is either for this reason, or for the fear of the legal process, or to prevent the disgrace that employees often choose to resign rather than appear at a disciplinary hearing.

There has recently been a number of cases in which such situations had to be adjudicated.  We specifically have three Labour Court decisions, two of which share the same view while the third contradicts them on this issue.

In Mtati v KPMG Services (Pty) Ltd (2017) 38 ILJ 1362 (LC) the Labour Court distinguished between a situation where an employee resigns and agree to serve a month’s notice, and a situation where an employee resigns with immediate effect.  The court held that an employer can only proceed to conduct a disciplinary hearing and dismiss an employee if she resigned and agreed to serve notice.  However, if the employee resigns with immediate effect, the employer does not have jurisdiction to discipline them as they would no longer be an employee of that employer.

In Coetzee v Zeitz MOCCA Foundation Trust and Others (2018) 39 ILJ 2529 (LC) the Labour Court decided that an employee who chose to resign in order to avoid a disciplinary hearing can still be disciplined by the employer for such misconduct as the employment relationship only comes to an end once the employer has accepted the employee’s resignation, and after serving the notice period.  The effect here is that before the employer accepts the employee’s resignation and before serving the notice period, the employer can institute disciplinary actions against the employee, even if he/she resigned with immediate effect, as the employee is contractually expected to serve a month’s notice.

In Naidoo and Another v Standard Bank SA Ltd [2019] 9 BLLR 934 (LC) the Labour Court was called to give clarity on whether an employee’s immediate resignations had the effect of immediately terminating the employment relationship and whether the employer has the right to hold the employee to their notice period and if so, whether it can proceed with the disciplinary enquiry against him/her despite a resignation with immediate effect.

The Labour Court held that once an employee resigns with immediate effect, this ends the employment relationship with the employer.  For the employer to hold the employee to the terms of the contract, it must first approach the court to seek specific performance on the part of the employee. Once the employer succeeds with a claim for specific performance, it can then proceed with a disciplinary hearing against the employee.

At this point in time, the two opposing views remain and clarity will only be obtained once a higher court pronounces on the preferred interpretation of the law.   In our view, in the interim, a very simple and practical test should be applied in situations like these:  The employer has the right to apply discipline up to the time when an employee actually leaves their employ.

K. Cowley
(Chairperson – (CEA – TESD)