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[2019] ZALCJHB 168
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Naidoo and Another v Standard Bank SA Ltd and Another (J1177/19) [2019] ZALCJHB 168; [2019] 9 BLLR 934 (LC); (2019) 40 ILJ 2589 (LC) (24 May 2019)
THE
LABOUR COURT OF SOUTH AFRICA,
JOHANNESBURG
Not Reportable
Case no: J1177/19
In the matter between:
TRISTYN
NAIDOO
First
Applicant
SEDAYSHUM
NAIDU
Second Applicant
And
STANDARD
BANK SA LTD
First
Respondent
SBG
SECURITIES (PTY) LTD
Second
Respondents
Heard:
15 May 2019
Delivered:
24 May 2019
Summary:
Urgent interdict – Jurisdiction of an employer to discipline an
employee post resignation
with immediate effect.
JUDGMENT
NKUTHA-NKONTWANA. J
Introduction
[1]
The first and second Applicants (the Applicants) challenges the
jurisdiction
of the First Respondent Standard Bank of SA Ltd
(Standard Bank) to continue with the disciplinary hearing post their
resignation
with immediate effect on 9 May 2019. Furthermore, they
seek the Court to interdict Standard Bank from proceeding with, and
finalising
such disciplinary hearing post their resignation, and
costs.
[2]
The standard Bank is opposing the application but elected not to file
an answering affidavit and preceded by way of oral legal submissions
in Court.
[3]
The second respondent, SBG Securities (Pty) Ltd (SBG) is joined only
as
an interested party and nothing further needs to be said of that,
save to state that no order is sought against it since it is not
opposing the application.
Background
Facts and Chronology
[4]
The Applicants were employed by Standard Bank as Equities Traders
which
positions they held until their resignations. At the core of
the dispute before this Court is a trade transaction involving the
applicants. According to the founding affidavit, the applicants were
approached by Mr Luke Middlewick: Head of Equities on 1 and
2 March
2019 respectively, to provide statements regarding the said trade
transaction. The applicants duly complied.
[5]
On 4 March 2019, the applicants were issued with notices of
precautionary
suspension. The notification provided
inter alia
,
that the nature of the allegations against the applicants was serious
and that if proven, could impact on the trust relationship
between
them and Standard Bank. On 28 March 2019, the applicants were
notified to attend a meeting scheduled for 29 March 2019
with a
forensic investigator. The applicants attended the said meeting and
again on 4 April 2019, they were requested to attend
a further
meeting with the forensic investigator on 5 April 2019.
[6]
Subsequently, on 7 May 2019, the applicants were informed of a
further
meeting scheduled at Standard Bank on 9 May 2019 which the
applicants duly attended. In this meeting, they were handed notices
to attend a disciplinary hearing on 16 and 22 May 2019 at 09h00
respectively. The charges against the applicants were formulated
as
follows:
‘
The
purpose of the Hearing will be to consider the Bank’s concerns
relating to-
·
Gross misconduct in that on 26
February 2019, you facilitated and/or
executed and/or allowed a trade to the value of R2.500, 000,000.00
for Coronation Fund Managers
(Coronation) without having obtained the
necessary approvals from the appropriate authorities within the
Global Markets Function.
Your conduct resulted in you and/or the Bank
exceeding several limits of which, exposed the Bank to financial
risk.
·
Dishonesty in that on 27 February
2019 and 28 February 2019, you
deliberately and knowingly failed to disclose the Coronation trade
and/or accurately reflect your
position to Market Risk when
submitting your end of day balances. You further knowingly and/or
deliberately failed to accurately
reflect the abovementioned trade
under the Facilitation Account, instead placing the trade under
Proprietary Account.
·
Gross misconduct in that you failed
to abide by the Johannesburg
Stock Exchange Rules when you facilitated the reporting of a trade
for Coronation only on 1 March
2019, outside of the time lines as
stipulated in the Johannesburg Stock Exchange Rules. Your conduct
exposed the Bank to reputational
risk.’
[7]
On the same day, the applicants tendered their letters of
resignation,
which resignation was with immediate effect. The letters
respectively read:
First
Applicant (Tristyn Naidoo)
‘
I hereby tender
formal notice of my resignation as an Equities Trader in terms of my
duel employment contract with SBG Securities
and Standard Bank of
South Africa.
This resignation is
effective immediately and without notice.
Yours sincerely’
Second Applicant
(Sedayshum Naidu)
‘
Please accept this
letter as notification that I am resigning from my position with
Standard Bank on 9 May 2019. I apologise for
not being able to
provide 28 days’ notice. I regret that, due to circumstances
beyond my control, I need to resign immediately.
Please let me know what
the process will be for receiving my last pay cheque and remaining
benefits.
Thanks so much for the
support that you have provided me during my tenure with the company.
I greatly appreciate your years of guidance’
[8]
On the same day, at around 17h37/8 the applicants received identical
emails
from Ms Rita Boshoff (Ms Boshoff) Head of HR at Standard Bank
which reads:
‘
I refer to your
resignation letter dated 9
th
of May 2019.
We acknowledge receipt
of such, however we wish to inform you that the Bank is not amenable
to accepting your immediate resignation
and will still hold you to
your 28 days’ notice period as contractually obligated and will
be continuing with our internal
process.
The disciplinary enquiry
will therefore proceed as scheduled as per the attached DE
notification letter handed to you today.
We wish to remind you to
collect your evidence pack as annotated on the letter and to reach
out in need.’ [Emphasis added]
[9]
From that time until the proceedings before this Court, it becomes
apparent
that Standard Bank did not accept the applicants’
immediate resignation and sought to hold them to their notice
periods.
However, the applicants disagreed and this is clear in their
response to Ms Boshoff, which reads in part:
‘…
Kindly note that it is
trite law that my resignation is a unilateral termination of the
employment contract and is therefore not
subject to Standard Bank’s
acceptance or approval.
In light of the fact that
this is an effective termination of the employment relationship,
Standard Bank cannot proceed against
any person who is no longer an
employee of the company.
…’
[10]
In the same email, the applicants outline their lack of faith in the
disciplinary process
by stating, firstly that the chairperson will be
someone on Standard Bank’s retainer and will thus not be
objective, secondly
that their work station has been cleared and
furniture removed, which according to them, is indicative of the fact
that their case
has been predetermined and that they will not be
afforded a fair hearing. As a final point, they made an unequivocal
demand for
a formal an undertaking from Standard Bank not to proceed
with any disciplinary action as the employment relationship has
terminated
and further promised to seek legal remedies should such
undertaking not be forthcoming.
[11]
On Monday 13 May 2019, Ms Boshoff responded to the applicants and
reiterated the stance
of Standard Bank, that it still intended
holding the applicants to their contractual notice period, and that
they remain its employees.
The applicants are further advised that
their disciplinary enquiries will proceed as scheduled on 16 and 22
May 2019 and that should
they fail to attend, the enquiries will
proceed in their absence.
[12]
On the same day, 13 May 2019, the applicants filed this application
on extremely urgent
basis.
Legal
Principles
[13]
The issues that must be determined by this Court are whether the
applicant’s immediate
resignation had the effect of immediately
terminating the employment relationship and whether Standard Bank has
the right to hold
the applicants to their notice periods and if so,
whether it can proceed with the disciplinary enquiries against them
despite their
resignation with immediate effect.
The
effect of resignation
[14]
In
Sihlali
v SA Broadcasting Corporation Ltd
[1]
,
resignation was held to be a unilateral termination of a contract of
employment by the employee. Therefore, resignation brings
an end to
the contract of employment. In legal parlance, once an employee has
resigned, he ceases to be an employee of that employer,
this much is
clear from the authority in
Toyota
SA Motors (Pty) v CCMA and Others
[2]
,
where
the Constitutional Court held thus:
‘
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. That is because, once the resignation has taken effect,
the employee is no longer an employee
of that employer and that
employer does not have jurisdiction over the employee anymore.’
[15]
It is a statutory requirement of our law, for an employee to give and
serve an employer
a notice period upon resignation. However, both
parties may agree to waive the said notice period and the employee is
free to leave.
This is ideally a desirable event-free situation,
however, there are instances where the employer does accept the
resignation but
however, wishes to hold the employee to its statutory
or contractual notice period.
[16]
In giving
effect to the principle in
Toyota
[3]
,
one has to establish when does the resignation take effect. This will
depend on the type of resignation: the first one will of
course be
resignation on notice, in this instance the resignation will only
take effect at the end of the notice period. The second
instance
would be where an employee resigns with immediate effect, which means
that the employee will not serve out his notice
period and the
resignation will take effect immediately.
When
does resignation take effect
[17]
As already stated above, mere resignation does not bring an abrupt
end to an employment
relationship. Statutorily and contractually, an
employee is required to serve out his notice period, if required and
once this
notice period has been served, the resignation can be said
to have taken effect. In the situation however, where the employee
resigns
without giving notice period, such as in this case, she/he is
in breach of the contract of employment.
[18]
In
Sihlali
[4]
the Court held that where an employee resigns without giving the
required notice period, that employee breaches the employment
contract. In this situation, what would be the recourse available to
the employer? This question was aptly answered in
Vodacom
(Pty) Ltd v Motsa and Another
[5]
,
which was quoted with approval in
Sihlali
as follows:
‘
When an employee
gives the required notice the contract terminates at the end of the
notice period. When an employee leaves his
or her employment without
giving the required period of notice the employee breaches the
contract. Ordinary contractual rules dictate
that the employer may
hold the employee to the contract and seek an order of specific
performance requiring the employee to serve
the period of notice.
Alternatively, the employer may elect to accept the employee’s
repudiation, cancel the contract and
claim damages.’
[19]
At this
juncture, it is apposite to deal with the misconception amongst
employers that they have a right to refuse to accept a
resignation-this is flawed and was frowned upon by the Court in
Sihlali
[6]
where the Court held such conduct to amount to a form of indentured
labour: it said:
‘
If resignation 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’.
[7]
[20]
It is
patently clear that in this matter there is a breach of contract by
the applicants, therefore, what needs to be addressed
are the
remedies available to Standard Bank for the breach?
Vodacom
[8]
restates the contractual principle that an employer may hold the
employee to the contract by seeking an order for specific
performance.
This is an equitable remedy where a court issues an
order requiring a party to perform per the contract. This, in the
ordinary
course of events, would entail an application or in
instances such as the present, a counter-claim by Standard Bank, to
seek an
order for specific performance in order to hold the
applicants to their notice periods. Unfortunately, this is not the
case in
this matter. There was no claim for specific performance and
therefore the Court is not in a position to order such.
Conflicting
authorities of this Court
[21]
The
applicants hinged their case on
Mtati
v KPMG Services (Pty) Ltd,
[9]
where the Court, confronted with similar facts, found as follows:
[24]
In my view, the second letter of resignation of the applicant changed
the status of the employee from
that of being an employee, in the
ordinary sense of the word, to that of being the erstwhile employee
of the respondent. This means
that the termination of the employment
contract with immediate effect took away the right of the first
respondent to proceed with
the disciplinary hearing against her. The
powers of the employer to discipline an employee post the resignation
is well illustrated
by what is said in the decision of the Labour
Appeal Court of Lesotho in the case of
Mahamo v Nedbank
Lesotho Limited
, where it is held that:
“
Resignation
is a unilateral act which brings about termination of the employment
relationship without requiring acceptance...Whilst
the Respondent
took every effort to ensure that the disciplinary hearing was
procedurally fair, its efforts were unnecessary because
the
employment contract had already been terminated by the Applicant
himself on 20
th
October
2000. . .”’
[22]
Even though
Mtati
[10]
was
appealed successfully, the Labour Appeal Court (LAC) only dealt with
the grounds of mootness of the application.
The
ratio decidendi
in
Matati
was endorsed in unreported decision in
Chiloane
v Standard Bank of South Africa Ltd,
[11]
where the Court emphasised that the employer’s power to
discipline the employee ceased when she tendered an unequivocal
resignation with immediate effect but that the employer could avail
itself to common law remedies. I agree.
[23]
A different
view was expressed in
Coetzee
v Zeitz Mocca Foundation Trust and Others
[12]
and unreported case of
Mzotsho
v Standard Bank South Africa Limited
.
[13]
In
Coetzee
,
the Court seems to suggest that
Mtati
is no longer persuasive since the correct reflection of the law is
the one expounded in
Vodacom
.
As stated above,
Vodacom
restates the contractual principle that an employer who is confronted
with an immediate resignation in breach of the contract of
employment
may hold the employee to the contract by seeking an order for
specific performance. Since it is accepted that the resignation
terminates the contract of employment unilaterally, the order of
specific performance would, in essence, reinstate the contract
and
direct performance with its terms.
[24]
It is
accepted that an order for the specific performance of a contract of
employment will, in the exercise of the court’s
discretion, not
normally be granted.
[14]
However, it does to mean it would never be granted. A typical example
is to be found in
Nationwide
Airlines
(Pty)
Ltd
v
Roediger
and
Another,
[15]
where
an airline captain was held to his contractual undertaking to
give three months’ notice.
[25]
Whilst I concur with both
Coetzee
and
Mzotsho
on
contractual principles, I do however disagree with the view that the
employer may proceed with the disciplinary hearing without
first
approaching the court for an order for specific performance. There is
no legal basis for such an approach.
A
case for urgent relief
[26]
Turning now to the issue of relief: To be entitled to such, on an
urgent basis, requires
for an applicant to demonstrate to a court
inter alia
, that he has no alternative remedy and that he has
a reasonable apprehension of irreparable harm. In this matter, the
applicants
were at pains to demonstrate their apprehension towards
the fairness of their disciplinary enquiries. They contend in the
founding
affidavit that the disciplinary enquiries will not be fair
and that their fate has already been decided by the applicant. Of
issue
is the contents of the email from Ms Boshoff that the Bank
intends to register the names of the applicants in the REDS. It
apposite
to quote the email exchange between the parties on this
issue. The first applicant as part of his email that brings about
his
apprehension. It reads:
‘
I would also like
to take this opportunity to voice my disappointment in the manner in
which the Standard Bank has handled this
matter.
In
this regard, I note the following:
1.
I suggest a mutual separation and was advised that such a process
would need
to be submitted in writing in order to initiate. The
timelines for consideration and resolution of this post the
submission were
not made clear and beyond the mandate of the people
present in the room.
2.
In the discussion it was made clear that a possible chairperson for
the internal
hearing is someone who the bank has on a retainer. How
can such a person be completely independent or objective.
3.
I have been informed that Standard Bank has already removed by
furniture at my
workspace. And this is a clear indication that the
bank has already predetermined the merits before even affording me
the courtesy
of a response.’
[27]
On 13 May 2019, Ms Boshoff respondent and stated:
‘
Dear Tristyn
I refer to your email
below.
I do not intend to
address all the allegations you have set out in your email below and
reserve the Bank’s right to do so
at the appropriate time and
forum. I further do not intend to debate the legalities by way of
correspondence.
Please note that the bank
maintains the view that it is entitled to hold you to your
contractual notice period, being 28 days. You
therefore remain an
employee of the Bank until 6 June 2019. The disciplinary enquiry will
therefore proceed as scheduled on 16
May 2019. Should you fail to
attend, it will proceed without you.
As you are aware, you
have been charged with dishonesty and as such, in addition to the
abovementioned rights in terms of notice
period, the Bank retains the
right, post termination of your employment, to place you on the REDS
(Register of Dishonest and Dismissed
Employees). Database following a
post termination REDS hearing.
The Bank reiterates its
intention to proceed with the hearing of the matter in a manner that
is fair and just and which will allow
you the opportunity to make
full representation of the charges levelled against you.’
[28]
It would seem that the applicants have a genuine complaint. A reading
of Ms Boshoff’s
email evinces Standard Bank’s motive for
holding of the disciplinary enquiry come hell or high waters, post
termination of
the employment.
[29]
I have already alluded to the fact that resignation with immediate
effect, as in this case,
brings about an end to the employment
relationship in breach of the termination clause. Whilst I sympathise
with Standard Bank,
it is not without remedies but self-help is not
one of them and this Court cannot sanction it. Once the
employer elects to
hold the employee to the terms of the contract, it
must enforce that election by means of a court order.
[30]
What Standard Bank seeks to do in this case is the control over the
applicants in order
to proceed with the disciplinary enquiry and
eventually enlist their names on REDS, which has reputational and
professional consequences
for the applicants. This it can only do if
the applicants are still in its employ.
Conclusion
[31]
In all the circumstances,
there is merit in
the applicant’s papers and they have, in my view, made out a
case for an interdict.
Costs
[32]
Although the applicants have sought a costs order, I am of the view
that this matter raised
pertinent questions that called for a
ventilation by this Court. Therefore, in applying the principles of
law and fairness, I will
not make an order as to costs.
[33]
In the premises, I make the following order:
Order
1.
The
first respondent (Standard Bank of South Africa) has no power to
discipline the first and second respondents subsequent to their
resignation with immediate effect.
2.
Standard Bank is interdicted from continuing with
the disciplinary enquires against the applicants that were scheduled
to commence
on 16 March 2019 and 22 March 2019 respectively.
3. The
is no order as to costs.
__________________
P. Nkutha-Nkontwana
Judge
of the Labour Court of South Africa
Appearances:
For
the applicant: Advocate:
C Goosen
Instructed
by
Vanessa
Naidoo
Attorneys Inc.
For
the respondents: Advocate:
G Fourie SC
Instructed
by Mervyn
Taback Inc.
[1]
(2010) 31 ILJ 1477 (LC).
[2]
(2016) 37 ILJ 313 (CC);
[2016] 3 BLLR 217
(CC);
2016 (3) BCLR 374
(CC) at para 142.
[3]
Supra n 2.
[4]
Supra
n
1.
[5]
[2016] 5 BLLR 523
(LC); (2016) 37 ILJ 1241 (LC).
[6]
Supra
n 2 at para 11.
[7]
Id n 5.
[8]
Supra
n
5.
[9]
[2016] ZALCJHB 403;
[2017] 3 BLLR 315
(LC); (2017) 38 ILJ 1362 (LC)
at para 25.
[10]
Ibid.
[11]
Unreported case of the Labour Court J2270/2018 handed down on 5 July
2018.
[12]
(2018) 39 ILJ 2529 LC;
[13]
J2426-18 10 July 2018.
[14]
Masetlha
v President of the Republic of South Africa
2008
(1) SA 566 (CC).
[15]
[2006] JOL 17221
(W).