Resignation In The Face Of Disciplinary Action

Written by Lovanya Moodley

(Labour Law Department)

Employers often underestimate the importance of following a correct procedure during internal disciplinary hearings, which is often to their detriment.  I am not referring to the ‘usual suspects’ of procedural fairness, such as sufficient notice; or allowing the employee the opportunity to cross examine witnesses and so forth. There are more technical points that sometimes arise, which your line managers (and anyone else in your organisation who chairs hearings) need to be aware of. I will confine myself to comment on resignations.

Employees frequently resign in the face of disciplinary action. Employers in the private and public sector will be all too familiar with this scenario:

An employee is served with a notice to attend a disciplinary hearing. Shortly thereafter, the employee forwards you a letter of resignation. 

As a chairperson, under what circumstances would it be competent in law to proceed with the hearing? These are the questions you need to consider:

1. Firstly, is the employee resigning with notice?

1. Is the employee resigning with immediate effect? That is, the employee refuses to work out his notice period.

The recent judgment of Kalipa Mtati v KPMG Services Pty Ltd (case number J2277/16) provides guidance.  It sets out a summary of the principles relating to resignation and serves as a good refresher on the subject.  In this case, the Labour Court considered the power of the employer to discipline an employee after she resigned.

FACTS  

The employee, Mtati, approached the Labour Court on an urgent basis, to interdict the employer, KPMG, from proceeding with her disciplinary hearing, after her resignation. The background to this application was that Mtati terminated her employment contract by resigning twice.  The first resignation came shortly after KPMG informed her that it was investigating misconduct allegations against her involving, among other issues, conflicts of interest and directly competing with her employer. She denied these allegations.

KPMG acknowledged receipt of Mtati’s first “notice of resignation.” They further informed her that their investigation was complete; they noted that she was still in her notice period; and that she would shortly receive a notice to attend a disciplinary hearing.   In response, Mtati penned a second letter of resignation to KPMG and specifically resigned from employment “with immediate effect”. The employer disputed the validity of the second letter and invited Mtati to make representations to the chairperson at the scheduled hearing, as to why the hearing ought not to proceed.

Mtati raised the jurisdiction of the chairperson to preside over her hearing, given her summary resignation. She informed the chairperson that should the hearing proceed, she will seek urgent interdictory relief to stay proceedings.  The chairperson ruled that she did in fact have jurisdiction to chair the hearing (it is unclear in the judgment as to why she was of this view).  Mtati left, and the hearing proceeded in her absence. She was found guilty and the chairperson imposed the sanction of a summary dismissal.

The Court held that despite the employer “accepting” first letter of resignation, she was still entitled to terminate her contract in the middle of her notice period, summarily.   Further, the court held that at the time that the chairperson concluded the hearing and made a finding against Mtati, there was no employment relationship between the parties. Therefore, the employer had no power to discipline her and the chairpersons ruling is in effect, a nullity in law.

I pause here to note some of the most relevant legal principles considered in this judgment:

• 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.

• Where the resignation is with immediate effect, the employer loses the right to discipline the employee, also with immediate effect.

• If an employee resigns and then has a change of heart and wishes to revoke the resignation, it cannot be withdrawn unless the employer agrees to this.

• Resignation is unilateral act and does not require the acceptance or consent of the employer to take effect.  All that is required is for the employer to receive the notice of termination.

• If notice is given late, that is, the employee works a shorter notice period than is contractually agreed, then the employee is acting in breach of contract. The employers remedy would be to either hold the employee to what’s left of the contract (that is, demand specific performance, which in this case would be no more than to work out the agreed notice period) or to cancel it and sue for damages.

CHAIRPERSON’S TAKE HEED:

• The Court commented that the chairperson ought to have postponed the matter or stood the matter down, and gave Mtati time within which she could present to the Chairperson, copies of the court papers challenging her ruling (that she had jurisdiction to proceed).

• The employer had no jurisdiction to discipline Mtati following her second letter of resignation

• The hearing convened by the employer was declared null and void

• The employer was ordered to pay the employees costs in the Labour Court.

SUMMARY: 

1. Is the employee resigning with notice?

If so, then it is still competent to convene the hearing during the notice period if you so desire. If the hearing is concluded BEFORE the notice period ends, then the reason for the termination, would be dismissal (if that was the sanction that the Chairperson decided upon.)

1. Is the employee resigning with immediate effect?

Given that resignation is a unilateral act, resignation terminates the employment relationship immediately. Your appointed chairperson has no jurisdiction to chair the hearing.

Inlexso offers training on Labour Relations. One of the popular workshops is “How to Chair a Disciplinary Hearing”, which course covers the above technical points and more. For more information on the courses offered kindly contact Inlexso on 012 307 3458/52.