Employees who commit misconduct and are issued with a notification of disciplinary enquiry, commonly tender their resignation in an attempt to avoid the consequences of disciplinary action and the stigma attached to a dismissal if found guilty.

In order to fully understand whether such resignation deprives an employer of the right to pursue the disciplinary process, it is important to understand the facts and fallacies of resignation. It is also important to differentiate between instances of resignation with an intention to serve out a notice period versus resignation with immediate effect.

Resignation is a unilateral act by an employee indicative of their intention to end the employment relationship. Resignation does not require the acceptance of an employer and, once communicated, cannot be withdrawn unless an employer consents to the withdrawal.

Resignation on notice

Most contracts of employment contain a termination clause allowing either party to end the contract of employment provided they tender the stipulated notice period or waive their entitlement to the salary for the notice period.

If a contract of employment is silent on the notice period, then the party electing to terminate the contract is required to give notice as specified in section 37 of the Basic Conditions of Employment Act, 1997. The notice period varies and is dependent on the employee’s period of service so that it is:

·        one week, if the employee has been employed for six months or less;

·        two weeks if the employee has been employed for more than six months  but less than one year; or

·        four weeks, if the employee has been employed for more than one year or is a farm worker or domestic worker employed for more than six months.

Employees often do not appreciate that their resignation (other than immediate resignation) only comes into effect at the expiry of the notice period. During the notice period, the employment relationship, and in this instance the employer’s right to pursue disciplinary action against the employee, remains in effect until the expiry of the notice period. The employer is therefore entitled to proceed with disciplinary action before the expiry of a notice period.

If the employee has been properly notified of the disciplinary enquiry date, and fails to appear at the disciplinary enquiry, an employer is entitled to construe the employee’s absence as a waiver of the employee’s right to be present and put forth a defence. The disciplinary enquiry can then proceed in the absence of the employee.

Should an employee be found guilty, the termination of the employment relationship will be reflected as a dismissal and not resignation.

Resignation with immediate effect

In differentiating between resignation on notice and resignation with immediate effect, it is important to consider the Labour Court case of Mtati v KPMG Services (Pty) Ltd [2017] JOL 37427 (LC). The employee tendered two resignation letters to her employer. The first was resignation on notice on becoming aware that her employer was investigating allegations of misconduct against her. The second resignation letter was resignation with immediate effect.

Despite the second resignation letter, the employer continued with the disciplinary enquiry. The employee challenged the employer’s authority to discipline her in light of her second resignation letter. The disciplinary enquiry chairperson ruled that she could proceed with the disciplinary, found the employee guilty and recommended dismissal.

The Court drew a distinction between resignation on notice and resignation with immediate effect, and the consequence on an employer’s authority to discipline an employee.

In the first instance, of a termination on notice, an employer is entitled to take disciplinary action against the employee during the notice period, as the employment relationship and all its rights and obligations are still in existence.

But, where an employee tenders their resignation with immediate effect, the employer immediately loses jurisdiction to discipline an employee as the resignation has taken effect immediately and there is no longer an employment relationship.

The Court accordingly found that the employee’s immediate resignation terminated the employment relationship and the chairperson’s decision was null and void.

Recourse for employer

Following the Mtati decision, whilst resignation with immediate effect defeats an employer’s right to discipline an employee, the employer still has recourse in that the employee in tendering their immediate resignation may have acted in breach of their contract of employment and this entitles the employer to a civil claim for breach of contract against the employee.

More often than not, employees resign to avoid disciplinary action in the face of serious allegations of misconduct like theft, unauthorised possession of company property or fraud. In such instances, an employer may elect to pursue a criminal case against the employee.

Disgruntled employees, who tender their resignation to avoid disciplinary action, often refer constructive dismissal disputes to their respective bargaining councils or the Commission for Conciliation, Mediation and Arbitration (CCMA). It is commendable to note that our Courts endeavour to identify true instances of constructive dismissals and do not readily reinstate or grant compensation to employees who resign with an ulterior motive.

In the case of Mvamelo vs AMG Engineering (2003) 11 BALR 1294, an employee was informed that he was to face a disciplinary hearing for theft. He then resigned and later claimed he had been constructively dismissed.  It was held that the employee failed to make out a case of constructive dismissal and that he resigned to avoid disciplinary action being taken against him.

In the Labour Appeal Court case of Kynoch Fertilizers Limited v Webster [1998] 1 BLLR 27 (LAC) the Court found that the resignation of an employee who had resigned and whose resignation was accepted by an employer amounted to a settlement between them. Therefore, any rights that may have accrued to the employee by virtue of a dismissal are negated by the settlement and it was therefore not open to the employee, to then seek relief by way of reinstatement or compensation for a constructive dismissal after having elected to resign.

This article was written by Danielle Ebrahim-Naseem, Associate, Norton Rose Fulbright South Africa Inc

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