Resignation with Immediate effect in the face of Misconduct Allegation

Can an employee resign with immediate effect in the face of misconduct allegations?

There have been conflicting decisions and uncertainty whether an Employer can still take disciplinary action against an Employee who resigned with immediate effect in the face of misconduct allegations.

In the matter of The Standard of Bank of South Africa Limited v Nombulelo Cynthia Chiloane, (LAC) (reportable case no: JA 85/18) the Labour Appeal Court found that an employee may not resign with immediate effect to end the employment relationship with his/her employer and so prevent an employer from proceeding with disciplinary action during the employee’s notice period (as regulated either by the contract of employment or the Basic Conditions of Employment Act [BCEA]).

In this case, Standard Bank gave its employee, Chiloane, notice to attend a disciplinary hearing, alleging that she cashed a cheque without following proper procedures, causing Standard Bank financial loss.  On the same day that the employee received the notice to attend the disciplinary hearing, she tendered a written letter of “resignation with immediate effect” to her superior. 

The bank told Chiloane that she was required to serve her four-week notice period as provided for in her contract of employment.  Through her attorney, the employee maintained that her letter of resignation ended the employment relationship with immediate effect and accordingly, Standard Bank was not entitled to proceed with the disciplinary hearing. Despite this, the disciplinary hearing continued in her absence and the presiding chairperson found the employee guilty of the misconduct and recommended a sanction of summary dismissal. Standard Bank accordingly dismissed the employee.

After having been informed of her dismissal, the employee instituted an urgent application in the Labour Court seeking an order that her dismissal was invalid.  The Labour Court held that resignation with immediate effect terminates the employment relationship immediately and an employer is not entitled to require an employee to serve his/her notice period.  Accordingly, the Labour Court declared the employee’s dismissal pursuant to the disciplinary hearing null and void.

On appeal, the Labour Appeal Court reiterated that employment relationships are governed by contracts and/or statutes. The court held inter alia, “In this matter, the employee’s narration that her resignation was with “immediate effect” was of no consequence because it did not comply with the contract which governed her relationship with her employer and the employer was thus correct to read into the resignation a four-week notice period within which period it was free to proceed with the disciplinary hearing.”

The Labour Appeal Court thus confirmed that where an employment contract provides for a particular notice period, an employee is obliged to give notice for the period provided in the contract.  The contract of employment, and reciprocal obligations contained in it, only terminate when the period specified expires.  In the absence of a contractual term, the parties are bound by the statutory notice provisions provided for in the BCEA.

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