About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2020
>>
[2020] ZALAC 58
|
|
Standard Bank of South Africa Limited v Chiloane (JA 85/18) [2020] ZALAC 58; [2021] 4 BLLR 400 (LAC); (2021) 42 ILJ 863 (LAC) (10 December 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA,JOHANNESBURG
Reportable
Case
no: JA 85/18
In
the matter between:
THE
STANDARD OF BANK OF SOUTH AFRICA LIMITED
Appellant
and
NOMBULELO
CYNTHIA
CHILOANE
Respondent
Heard:
05 November 2020
Delivered:
This judgment was handed down electronically by circulation to the
parties’ representatives by email, and by publication
on the
Labour Appeal Court website and release to SAFLII, Juta and Lexis
Nexis. The time and date for hand down is deemed to be
10 December
2020.'
Summary:
Discipline—Right of employer to discipline employee for
misconduct within
the employee’s notice
period—Resignation with immediate effect having no effect when
disciplinary hearing takes place
within the notice period
Resignation—Resignation
with immediate effect not terminating employment relationship when
contract stipulates a notice period
unless the other parties waive or
do not seek to enforce it.
Resignation—In
the absence of contractual stipulation of a notice period, Basic
Condition of Employment Act taking effect.
Coram:
Waglay JP, Coppin JA and Savage AJA
JUDGMENT
WAGLAY
JP
[1]
Once again the Labour Court was confronted with the issue of whether
an employee can by a letter of resignation immediately
end his/her
relationship with his/her employer irrespective of the contractual or
statutory provisions which provide for notice
to be given before
termination can take effect.
[2]
This judgment like the others on this issue raises the rights of
employers
and employees in respect of discipline where an employee
resigns in the face of disciplinary charges.
[3]
In this matter, the employee (respondent in this appeal) was given
notice
to attend a disciplinary hearing. The employee was said to
have cashed a cheque without following proper procedures. It later
transpired
that the cashed cheque was fraudulent, which caused the
employer a loss of just under R30 000.00.
[4]
On the day that the employee received the notice to attend the
disciplinary
hearing, she handed her superior, Ms Matlhajoa, her
letter of resignation. The letter stated that she was tendering her
“resignation
with immediate effect”. Matlhajoa accepted
the letter and informed her that she would speak to the Human
Resource official
as she did not know what should be done about the
letter.
[5]
Matlhajoa consulted with the Human Resource official and was told
that
the employee was required to serve a four-week notice period as
provided in her contract of employment. Matlhajoa informed the
employee that she would have to serve her notice period and since she
was on suspension, she needed only to phone her employer every
day.
The disciplinary hearing was set to continue as it was within the
employee’s notice period.
[6]
Various correspondences were exchanged between the employee’s
attorneys
and the employer (the appellant) between 4 June, the date
on which she handed in her letter of resignation, and the date of the
hearing which was scheduled for 11 June 2018. The employee took the
view that her letter of “resignation with immediate effect”
ended the employment relationship and as such, the employer was not
entitled to proceed with the disciplinary hearing.
[7]
On 11 June 2018, the employee and her attorney presented themselves
at
the disciplinary hearing and argued against its continuation on
the ground of an absence of an employment relationship. The
chairperson
presiding rejected the argument and decided to proceed
with the hearing. At this point, the employee and her attorney left
the
hearing and the hearing proceeded in the employee’s
absence.
[8]
The employee was found to have committed the misconduct with which
she
was charged and the sanction of summary dismissal was imposed.
This was then communicated to the employee.
[9]
Some two weeks after the employee was informed about her dismissal,
she
brought an urgent application to the Labour Court seeking: (i) an
order declaring the decision to “dismiss her pursuant to
a
disciplinary hearing null and void”; (ii) interdicting and
restraining the employer from enlisting her name on the Banking
Association of South Africa’s central database “the
Register for Employees Dishonesty System” (REDS) and (iii)
costs.
[10]
The employer opposed the application on various grounds,
inter
alia
: that the employee’s letter of resignation was not
valid because it did not give four weeks’ notice of her
resignation
as was required in terms of her contract of employment.
[11]
The Labour Court (Cele J) held that once an employee hands in her
resignation indicating
that the resignation is with immediate effect,
the employment relationship comes to an immediate end and the
employer has no right
to insist that the employee serves his/her
notice period. The Labour Court went on to declare the employee’s
dismissal pursuant
to the disciplinary hearing “null and void”.
[12]
The Labour Court made no comment on the interdict and restraint
sought by the employee,
nor did it grant that prayer. It also made no
order as to costs.
[13]
This matter
comes before this Court with the leave of the Labour Court. As a
starting point, it again needs to be emphasised that
employment
relationships are governed by contract or statutes or, in most cases,
both. So if an employer
and its
employee do not expressly agree for either of them to give the other
notice to terminate their relationship, the Basic Conditions
of
Employment Act (“BCEA”)
[1]
provides that they do so.
[14]
It is common cause that the employer and employee had agreed that one
would give the other
four weeks’ notice of termination of their
employment contract. In these circumstances, for the employer or the
employee
to lawfully terminate their employment relationship, one had
to give the other four weeks’ notice. The party receiving the
notice of termination which does not comply with the agreed notice
period may, however, agree to forgo that term of the agreement.
Where
there is no agreement unless it is expressly stated that there is no
need to serve the four weeks’ notice, it has to
be complied
with in terms of the contract..
[15]
The argument that where an employee gives notice of termination by
way of resigning with
immediate effect, such an employee cannot be
compelled to continue working for the employer because resignation is
a valid unilateral
act that comes into effect on the date the
employee dictates that it will come to an end is misconceived.
[16]
An
agreement between the parties that in the event of either terminating
their relationship, they must give four weeks’ notice
has
meaning. It requires, in express terms, that one party must give the
other four weeks’ notice unless, as
stated
earlier, the party receiving the notice of termination does not seek
to enforce that term of the agreement. The notice term
remains valid
and binding
and where
no such term is agreed upon the parties are still required to give
such notice as provided for in the BCEA.
[2]
[17]
The Labour
Court, in coming to the decision it did, followed a number of
judgments handed down by it. Perhaps the leading judgment
may be seen
to be that of
Lottering
& others v Stellenbosch Municipality
[3]
(
Lottering
)
where the
court said:
‘
Once
given, the contractual terms dealing with the period of notice take
effect. The failure to give proper notice is a breach of
contract
entitling the employer under the ordinary principles of law relating
to breach either to accept the repudiatory breach
or terminate the
contract summarily or to hold the employee to the contract.
It
follows that the act of termination is a unilateral act permitted by
the contract.
The fact
that the notice period is not in compliance with the contract and
accordingly a breach does not mean that that breach should
reach
backwards
and
contaminate the act of termination. In my view, the act of
resignation (the communication of the decision to terminate) is not
a
breach or a repudiation of
the
contract but an exercise of a right conferred by the contract. It is
a legal act
and its
consequences for the date of termination are determined by the
contract,
not what might be stated in the notice.’
[4]
[18]
Lottering
and the
judgments that follow similar arguments are clearly wrong. Where
termination of employment is in breach of a contractual
term which
requires the giving of notice or, absent such term, where termination
of employment is in breach of the BCEA unless
there is an acceptance
by the party receiving the non-compliant notice of termination, the
terms of the contract
or the
statute remain valid and binding. This is so “
since
repudiation terminates
the
contract only if the innocent party (here the employer) elects not to
act on it.”
[5]
[19]
As counsel for the appellant properly stated, resignation that is not
in compliance with
contractual notice requirements does not validly
terminate the contract of employment unilaterally; it is only the
resignation
that complies with notice requirements that serves
unilaterally to terminate the contract.
[20]
It is also
argued that in the matter of
Toyota
SA Motors (Pty) Ltd v Commission
for
Conciliation, Mediation and Arbitration & others
[6]
(
Toyota
),
the Constitutional
Court held
that notwithstanding the absence of notice, an employee’s
resignation served to unilaterally terminate the contract
of
employment thus depriving the employer of the power to discipline an
errant employee. That is not so. The only comment on this
issue made
in the
Toyota
matter
was in the minority judgment of Zondo J (as he then was) where, in
dealing with the jurisdiction of the CCMA to arbitrate
a dismissal
dispute he stated that where an employee hands in a letter of
resignation which is to come in to effect at some future
date (after
the notice period has expired) the employer is entitled to discipline
the employee within that notice period and if
the employee is
dismissed consequent upon the disciplinary hearing before the expiry
of the notice period the CCMA has jurisdiction
to entertain a
dismissal dispute.
However,
the
relief
that
the
CCMA
is
competent
to
give
is
limited
to:
(i)
compensation
in the amount that the employee would have received from the date of
dismissal to the date when the resignation would
have come into
effect,
or
(ii) reinstatement from the date of dismissal to the date when the
resignation
would have
come into effect, because they could be no employer employee
relationship between the parties once the notice period
had come to
an end.
[21]
Similarly
in the matter of
Steenkamp
& others v Edcon Ltd (National Union of Metalworkers of SA
intervening)
[7]
it was
said:
‘
Except
where summary dismissal is warranted, the unilateral act of the
employer in terminating the contract, whether by notice or
other
conduct, does not without more bring an end to the contract of
employment. The same applies to an employee who gives short
notice in
violation of the contract: he or she may be obliged to serve out
the notice period. In neither case does the unlawful
repudiation of
the contract have to be accepted by the other party.
It
is this common-law location of the statute as a whole that the
language of s 189A invokes. The same applies to the BCEA. Under
that
statute, it is well accepted that a dismissal on short notice is not
effective to terminate the contract of employment. When
either
employer or employee seeks to terminate, the BCEA requires that each
give notice in terms of s 37. If either party does
not, the contract
of employment continues to subsist, affording both
employee
and employer a range of statutory remedies to enforce it.’
[8]
[22]
In the circumstances, where a contract prescribes a period of notice
the party withdrawing
from the contractor or resigning is obliged to
give notice for the period prescribed in the contract. The contract
and the reciprocal
obligations contained in it only terminate or
take
effect
when the specified period runs out. Alternatively, absent
a contractual term the parties are bound to the notice period
provided
in the BCEA.
[23]
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.
[24]
The decision of the Labour Court is thus liable to be set aside.
[25]
On the issue of seeking an interdict and restraining the employer
from enlisting the employee’s
name on REDS. The employee
continued with this prayer even after receiving papers stating that
her name would not go on REDS, because,
and as she was aware she was
neither charged nor was she found to have committed any misconduct
which amounted to dishonesty. It
is not clear why no costs order was
considered against the employee. In any event, I see no need to
intervene.
With
regards to the costs of this appeal, it is only because the matter
was unopposed that there is no order as to costs.
[26]
In the result, the following order is made:
(i)
The appeal succeeds;
(ii)
The order of the Labour Court is set aside and substituted with the
following:
“
The
application is dismissed”.
Waglay
JP
I
agree
Coppin
JA
I
agree
Savage
AJA
APPEARANCES:
FOR
THE APPELLANT:
Adv. A Myburg
Instructed
by Mervyn Taback Inc
No
appearances for the respondent
[1]
75 of 1997.
[2]
Sec 37 provides that:
(a)
Subject to section 38, a contract of employment terminable at
the instance of a party to the contract may be terminated only on
notice of not less than: one week, if the employee has been employed
for six months or less;
(b)
two weeks, if the employee has been employed for more than six
months but not more than one year;
(c)
four weeks, if the employee
(i)
has been employed for one year or more; or
(ii)
is a farm worker or domestic worker who has been employed for more
than six months.
(1)
[3]
(2010) 31 ILJ 2923 (LC).
[4]
At paras 18-19.
[5]
See Brassey Commentary on the LRA at A8-26.
[6]
(2016) 37 ILJ 313 (CC)
[7]
(2016) 37 ILJ 564 (CC)
[8]
At paras 65 and 68.