Resignations with immediate effect – Employer remedies?

Mar 25, 2020

An employee is entitled, at any time in an employment relationship, to resign and walk away from the employer.

In such instances when the employee does not work the required notice period, what remedies are at the disposal of the employer.

This right to resign (unlike in the case of an employer, which must in terms of the Labour Relations Act [LRA] always be able to demonstrate that there is a fair reason for it to terminate the employment relationship and that it has followed a fair procedure to do so) is subject only to the condition that the employee should work out the required notice period.

However, there are many circumstances in which any employee does not wish, or even refuses to do so. What rights, if any, does an employer have in this case?

The only limit to an employee resigning is that, ordinarily, the notice period must be worked out. The notice period can be determined either from the contract of employment entered into between the parties, or if the contract is silent, the Basic Conditions of Employment Act (BCEA). The contract can be more favourable, but can never allow for a lesser period of notice than that provided for by the BCEA, which requires a minimum notice period of one week’s notice for the first six months of employment, two weeks notice for between 6 and 12 months employment, and four weeks (one month’s) notice after a full year of employment.

Interestingly, the BCEA also requires that although these amounts can be increased, the employee can never be required to give more notice than that required of the employer. As mentioned above, however, what if the employee simply resigns with immediate effect?

In the first instance, such conduct would be a breach of the contract of employment, or a breach of the employee’s statutory obligation in terms of the BCEA.

A first possible remedy that the employer may invoke, provided it is a condition in the employee’s contract of employment, is that should the employee terminate the employment contract without tendering the prescribed written contractual notice period, the employer reserves the right to deduct the applicable notice period from the employee’s final payment as well as all outstanding statutory monies and outstanding loans due to the employer. This remedy does not rectify the fact that the employee did not work the required notice period.

However, if the employer deems it important that the employee should work the required notice period, based on operational requirements, the only other remedy the employer has is to approach the court for contractual breach. Since the relationship between the parties is a form of contract, this breach would ordinarily entitle the employer to approach the court for the usual remedies, being either an order compelling the employee to comply with the contractual or statutory obligation. In addition, if the employer has suffered damages due to the employee’s breach, the employer could seek an order compensating it for such damages.

However, the Labour Courts have realised that employment is a special form of contract and have held that, where an employee unilaterally resigns without giving the require notice, the employer cannot simply ignore this fact, withhold acceptance of the resignation and insist that the employee work out the proper notice period. In Sihlali v SA Broadcasting Corporation Ltd (2010) the Labour Court held that “If resignation were to be valid only once it is accepted by an employer, the latter would in effect be entitled, by a simple stratagem of refusing to accept a tendered resignation, to require an employee to remain in employment against his or her will. This cannot be — it would reduce the employment relationship to a form of indentured labour.”

This principle was followed more recently by the Labour Court in Naidoo & another v Standard Bank SA Ltd & another (2019). Here, two employees were facing serious disciplinary action arising out of allegations of gross misconduct relating to the authorisation of trades by the Bank in excess of internal limits; when they resigned, Standard Bank sought to hold them to their 28 day notice periods and to proceed with the disciplinary processes. However, the Labour Court found that the employee’s unilateral act to resign with immediate effect, although a breach of contract, was (absent the Bank obtaining an order compelling the employees to comply with their notice periods, which the Bank had not sought) a valid act.

Employers should be aware that when an employee resigns with immediate effect, the employer’s failure to accept such resignation is legally irrelevant, and the employment relationship has been terminated. The only recourse for the employer is to approach a court to compel the employee to work out the contractual or statutory notice, and to then act in that period before the employment relationship expires at the end of the notice period.

Author:

Wallace Albertyn

Wallace Albertyn is a Senior Associate and Legal Advisor at LabourMan Consultants.

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