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Legal implications of a resignation - International Law Office

International Law Office

Employment & Benefits - South Africa

Legal implications of a resignation

September 15 2010


Employers must frequently deal with employees resigning without giving proper notice. A number of questions commonly arise in this context. The analysis recently set out by the Labour Court in Lottering v Stellenbosch Municipality(1) is instructive in this regard.

The case involved a number of executive directors employed by the municipal council. The appointments were 'political' in the sense that the ruling party appoints the directors and the municipal manager. The opposition party had obtained a majority in the council in coalition with others in November 2009, which led to conflict among certain employees. These issues caused Mr Lottering and his colleagues to give notice of their resignation on November 6 2009, stating that their last working day would be November 30. This was short notice in terms of both their contracts and the Basic Conditions of Employment Act 1997. They later tried to withdraw their resignations but the municipality refused to accept. Instead, it advertised their positions.

Lottering and his colleagues approached the Labour Court on an urgent basis. They argued that (i) their resignations were invalid because they did not give proper notice, and (ii) therefore, they were still employed and the municipality should recognise their contracts and stop recruiting to fill their posts.

The Labour Court first confirmed the following principles relating to resignation in South African law:

  • Notice of resignation must be unequivocal. The notice must indicate clearly that the employee intends to resign.
  • Once an employee has communicated his or her resignation, he or she cannot withdraw it unless the employer agrees.
  • Resignation by the employee is a unilateral act which does not require acceptance by the employer.
  • The contract does not terminate on the date that the notice is given. It terminates only when the notice period expires (unless the employer waives the notice requirement).
  • If, after he or she has given notice, the employee does not work out the notice period, the employer need not pay him or her (on the basis of the no work, no pay principle).
  • If the employee gives late or short notice that is a breach of contract, the employer can either hold the employee to what is left of the contract or cancel it and sue for damages.
  • If the employee does not give proper notice and the employer chooses to hold him or her to the contract, the contract terminates after the full notice period.

The court went on to confirm that there are two elements to a resignation when employees have to give notice to terminate their contracts: (i) the unilateral act of resignation; and (ii) the requirement to give notice.

The court stated that resignation is not invalid if the employee does not give proper notice; it simply creates a breach of contract. The employer can decide whether to accept that breach and waive compliance with the notice period. Alternatively, it can hold the employee to the notice period, but that does not change the fact that there is still a valid resignation. It merely means that the employee must work out the full notice required and, if he or she does not, the employer can claim for damages.

Lottering and his colleagues lost their case and had to pay their employer's costs. The court stated they had themselves to blame for their predicament. More important, however, is the clarification given to the legal implications of an act of resignation. Employers can now apply these principles to answer the queries that often arise.

One such query is whether an employer can discipline an employee who has resigned. Applying the above principles, it is clear that an employer can still take disciplinary action against an employee who has resigned and is working out his or her notice period if it so wishes. The employee is still employed until the end of the notice period. Therefore, if an employee commits misconduct during this period (or the employer becomes aware of such misconduct), it still has the right to discipline the employee. If the employer has taken disciplinary action against the employee and he or she is summarily dismissed before the notice period ends, the employment relationship will then terminate because of a dismissal for misconduct and not because of resignation. However, if the employer does not complete the disciplinary process before the notice period expires, it cannot carry on with the disciplinary action because the person is no longer an employee.

For further information on this topic please contact Susan Stelzner at ENSafrica by telephone (+27 21 410 2500), fax (+27 21 410 2555) or email (sstelzner@ens.co.za).

Endnotes

(1) As yet unreported judgment given on May 7 2010.


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