Hogan Lovells Publications | Employment Alert | July 2017

Resignation or dismissal?

Employees who have been charged with misconduct and are due to face disciplinary hearings have been found to resign instead of face the disciplinary hearing, however, at the disciplinary hearing; the employer goes ahead and dismisses them. The question then arises as to whether the dismissal was fair or not? 

Two cases have recently been reported providing conflicting views to that very question. In the case of Mtati v KPMG Services (Pty) Ltd [2017] 3 BLLR 315 (LC) the employee terminated her employment contract by resigning. She submitted two letters of resignation to the employer. The first letter was submitted after the employer informed the employee that it was conducting an investigation into certain allegations against her. The second letter was submitted after the employer had indicated to the employee that it would be commencing with the disciplinary proceedings against her. 

The first letter submitted on 5 September 2016 simply stated "please accept this letter as a notice of my resignation" and the second letter submitted on 14 September 2016 stated "it is with deep regret that I must inform you I am resigning from my employment with PMG with immediate effect". 

At the disciplinary enquiry on 30 September 2016, the employee therefore raised the preliminary point concerning the jurisdiction of the chairperson to discipline her in light of her resignation. The chairperson, however, ruled that he had jurisdiction and found the employee guilty and imposed the sanction of summary dismissal.

The employee then sought an order on an urgent basis from the Labour Court to interdict the employer from proceeding with the disciplinary hearing after the employee's resignation. The judge held that the fact that an employee has given a notice to terminate the employment contract does not take away the power of the employer to discipline him or her serving the notice period. If an employee is serving a notice period, he/she is still subject to the authority and the power of the employer in as far as the employment relationship is concerned. If an employer takes disciplinary action against the employee and dismissed him/her before the end of the notice period, the employment relationship would be terminated. In such circumstances, the termination will not be due to the resignation of the employee but rather the dismissal for misconduct. 

The judge went further to state that there is no requirement in law that an employee who resigns on notice, which is then accepted by the employer, cannot resign with immediate effect during the notice period. The second letter of resignation of the employee therefore changed the status of the employee from that of being an employee to that of being a former employee of the employer. That meant that the termination of the employment contract with immediate effect took away the right of the employer to proceed with the disciplinary enquiry against the employee. 

On that basis the judge found that at the time the chairperson conducted the disciplinary hearing against the employee, there was no employment contract between the parties and thus the employer had no power to discipline her. The ruling of the chairperson of the disciplinary hearing that the employer had jurisdiction to conduct disciplinary proceedings against the employee and the subsequent decision to dismiss her, was a nullity. The employer had no jurisdiction to discipline the employee following her second letter of resignation. 

This judgment is said to be controversial on the basis that the employee had breached her contract by not giving the required notice, and by holding the disciplinary hearing the employer had not accepted the employee's repudiation. 

The second case dealing with the question above is that of Nogoduka v Minister of the Department of Higher Education & Training and Others (2981/2016) [2017] ZAECGHC 74 (16 February 2017). In this case the employee resigned with immediate effect claiming that he was tired of the "political machinations" in the college where he was employed as a lecturer, after he had been suspended and called to attend a disciplinary hearing. The college declined to accept his resignation and proceeded with the disciplinary hearing where he was dismissed. 

Like the first case above, the employee argued that the chairperson had committed an irregularity by dismissing him because at the time he was no longer in the college's employ. He therefore sought an order directing the department to accept his resignation and to set aside the decision to dismiss him.

The court referred to section 16B(6) of the Public Service Act 1994, which expressly provides that once notice of disciplinary action has been given to an employee, the 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 effect of this section is to avoid employees' summarily resigning to avoid adverse findings in a disciplinary hearing, thus leaving them with an ostensibly clean record. 

The court held that the employee was obliged to serve out his notice period and was still an employee when the disciplinary hearing was held and the ruling of dismissal handed down. The dismissal was therefore found not to be unfair and the employee's application was therefore dismissed with costs. 

We dealt with a case of a similar nature, the names of the parties, however, are to remain confidential. In this case, the employee was charged with misconduct and disciplinary proceedings were scheduled to take place. In light of this, the employee resigned on 7 October 2015 with immediate effect. Despite this, the employee served his notice period which resulted in the employment relationship coming to an end on 7 November 2015. 

On 17 February 2016, the employer dismissed the employee, at the conclusion of a disciplinary enquiry. The court was therefore called upon to determine whether the employer, after having knowledge of the employee's resignation, was entitled to dismiss the employee. 

The employee held the position that after 7 November 2015, the employer exercised no power over the employee to effect a termination as the contract had already been terminated. The employee referred to the case of Toyota SA Motors (Pty) Limited v Commission for Conciliation, Mediation and Arbitration & Others (2016) 37 ILJ 313 (CC), which states that "where an employee resigns from the employ of his employer and does so voluntarily, the employer may not discipline that employee after the resignation has taken effect. That is because, once the resignation has taken effect, the employee is no longer an employee of that employer and that employer does not have jurisdiction over the employee anymore".

The court granted the declaratory order that the employee's resignation took effect on 7 November 2015 and directed the employer to record that the reason for the termination of the employment contract was resignation and not dismissal for misconduct.  

From the above it would seem that once an employee has resigned and the employment relationship has terminated, either through resignation with immediate effect or upon expiry of the notice period, the employer does not have jurisdiction to dismiss the employee and such dismissal would be unfair. 

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