2021-01-21

What remedies does an employer have should an employee give short notice when they resign?

Dave Pattle

“Falling on the sword”- what remedies does an employer have should an employee give short notice when they resign?

The recent unreported case of Mthimkhulu v Standard Bank of South Africa LC J928/20, 18-9-2020, the Labour Court was called up to apply its mind to the legal consequence of a resignation tendered by an employee after having been found guilty of serious charges of dishonesty and fraud.  The employee tendered his immediate resignation prior to a sanction being delivered.  Three days later the employer responded by reminding the employee that he was obliged to serve a thirty-day notice period and dismissed him.

The employee approached the Labour Court on an urgent basis to nullify the sanction of dismissal.  Jurisdiction issues aside, the Court dealt with the issue of whether an employer can discipline an employee after the employee resigned with immediate effect.

The Court referred to the minority Judgment of Zondo J in the Constitutional Court matter of Toyota SA Motors (Pty) Ltd v CCMA and Others (2016) 37 ILJ 313 (CC).  Zondo J concluded that once a resignation takes effect, an employer has no right to discipline the employee.

Properly considered, the employee had in the Standard Bank matter, repudiated the contract of employment as he did not serve the requested notice period.  The basic principles of the law of contract provide the employer with the right to either accept the repudiation and then elect to sue for damages or cancel the contract, or seek specific performance i.e., hold the employee to the terms of the contract, in this case to serve the thirty-day notice period.  The Court went on to say that while the resignation prevents the employer from taking disciplinary action against the employer from suing for specific performance.

The Court concluded that it had no jurisdiction to entertain the question of the dismissal as the matter needed to be referred to conciliation first.

The end result would have of course presented both parties with a practical conundrum – we don’t want “you” but you must serve your notice period – bearing in mind that the employee may have referred the matter to the CCMA – taking far in excess of 30 days to resolve.

I think there is something to be said for pre-empting these scenarios (short notice) which are fairly common-place by making provision for it in the contract of employment.  I think it needs to be stated clearly that in the event that the employee fails to provide the contractually agreed upon notice period that the employee agrees that the employer may withhold any payments due to the employee to the extent of the harm resulting from such short notice.

Article written by Dave Pattle, Solutions Services Manager at Drake International South Africa, [email protected].