Employment Newsletter

RESIGNATIONS: THE “SILVER BULLET” TO DISCIPLINARY

You suspect an employee has committed gross misconduct. You investigate, lay the groundwork and issue a charge sheet calling the employee to a disciplinary hearing. You hold all the cards when – BAM – the employee hands in a letter of resignation. What now?

You suspect an employee has committed gross misconduct. You investigate, lay the groundwork and issue a charge sheet calling the employee to a disciplinary hearing. You hold all the cards when – BAM – the employee hands in a letter of resignation. What now?

Toyota, Mr. M and the Resignation on Notice

  • The Facts
  • M committed misconduct by being AWOL
  • When he returned to work, Toyota instituted disciplinary proceedings against him
  • In the face of pending disciplinary action, Mr. M resigned on notice
  • Toyota rejected the resignation, proceeded with the disciplinary hearing and dismissed Mr. M
  • The dismissal occurred during Mr. M’s notice period in terms of his resignation
  • M referred an unfair dismissal dispute to the CCMA, whereafter a lengthy legal process followed before the matter ended up at the Constitutional Court
  • The Constitutional Court’s decision
  • The question before the court dealt with whether re-instatement was a competent remedy in the situation between Mr. M and Toyota
  • Zondo J, in a minority dissenting judgement, dealt with the effect of disciplinary proceedings in the face of a resignation
  • Once a resignation has taken effect, the employer may not discipline the employee
  • M resigned on notice and the decision to dismiss preceded the termination date of his notice period – therefore, the dismissal, and not the resignation, terminated the employment relationship

Nogoduka and the “Thrill” of Resigning with Immediate Effect

  • The Facts
  • Nogoduka was a lecturer who had been placed on precautionary suspension pending further investigation
  • He was later placed on final suspension and issued with a charge sheet calling him to a disciplinary hearing
  • Before the hearing could be convened, he submitted the following letter of resignation:

“I am thrilled to inform you that I am resigning. I have been waiting for what seems like forever to inform you that I am resigning. I believe I have worked in this institution long enough to understand its cultural, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it. I am tendering my resignation effective immediately (sic).”

  • Despite Mr. Nogoduka’s resignation with immediate effect, the disciplinary hearing proceeded and he was dismissed
  • Nogoduka approached the High Court for relief setting aside the disciplinary proceedings and for an order to the effect that the Minister should take steps to ensure that his employment records reflect that he had resigned.
  • The High Court’s decision
  • In considering the matter, Pickering J referred to Mr. Nogoduka’s contract of employment which provided for a notice period of one month and to s16B(6) of the Public Service Act (“the PSA”) which provides:-

“If notice of a 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.”

  • On the strength of the notice period and s16B(6) of the PSA the Court held that Mr. Nogoduka was precluded from resigning without notice
  • Nogoduka was still deemed to be an employee at the time the decision to dismiss him was taken
  • Therefore, he had been validly dismissed.

When Resigning is so Nice, You Have to do it Twice!

  • The Facts
  • Mtati was being investigated for suspected misconduct
  • When she became aware of the investigation she resigned on notice
  • Her resignation did not dissuade the Company from its investigation and they eventually instituted disciplinary proceedings against her
  • With the threat of impending disciplinary action, Ms. Mtati then issued a second resignation in which she resigned with immediate effect
  • KPMG convened the disciplinary enquiry, which Ms. Mtati challenged on the basis that she was no longer an employee, it proceeded in her absence and she was dismissed.
  • Mtati approached the Labour Court to interdict the disciplinary proceedings from taking effect.
  • The Labour Court’s decision
  • Molahlehi J considered the minority judgement in the Toyota case
  • The Court looked at when the resignation takes effect to establish an employer’s ability to take disciplinary action – whether the resignation was one on notice or one with immediate effect.
  • The conclusion the Court came to was that where a resignation is one with immediate effect, the employer loses the ability to discipline an employee
  • However, when an employee resigns on notice the contract of employment subsists until the end of the notice period within which time the employer and employee can exercise their respective rights – i.e. the employer can take disciplinary action against the employee and the employee can resign with immediate effect

Conclusion

Based on the above, is the effect that an employee can halt disciplinary proceedings at any stage of the process by resigning with immediate effect? Seemingly the answer is yes and until certainty is brought to the issue by a judgment of a superior court, this appears to be the position which is most unsatisfactory.

So, what now for employers? Surely this cannot be looked at in a purely legal context; what of the practical considerations? Look at the example provided in the introduction – so what if the employee resigns before a decision to dismiss is taken? Has the employer not achieved the desired result of terminating the employment relationship? I would suggest employers should adopt a qualitative assessment and practical approach before blindly proceeding with disciplinary action in the face of an employee’s resignation in order “to prove a point”.

 

CASES REFERRED TO:

Toyota SA Motors (Pty) Ltd v Commission for Conciliation Mediation & Arbitration & Others (2016) 37 ILJ 313 (CC): http://www.saflii.org/za/cases/ZACC/2015/40.html

Nogoduka v The Minister of Higher Education & Others [2017] ZAECGHC 74: http://www.saflii.org/za/cases/ZAECGHC/2017/74.html

Mtati v KPMG Services (Pty) Ltd (2017) 38 ILJ 1362 (LC): http://www.saflii.org/za/cases/ZALCJHB/2016/403.html

Note: This information is published for general information purposes and is not intended to constitute legal advice. Specialist legal advice should always be sought in relation to any particular situation. BLC Attorneys will accept no responsibility for any actions taken or not taken on the basis of this publication.

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