Standard Bank of South Africa Ltd v Nombulelo Cynthia Chiloane [2021] 4 BLLR (LAC)

The employee mistakenly processed a fraudulent check resulting in the loss of approximately R30 000.00 for which the employer was held liable.

The employer issued the employee with a notice to attend a disciplinary hearing whereafter the employee handed in her resignation with immediate effect. The employer informed the employee that she was liable to work out her notice period of four weeks.

The disciplinary hearing was scheduled to take place during the employee’s notice period. The employee failed to attend the hearing as she was of the opinion the employer did not have the authority to discipline her as she had resigned with immediate effect. The hearing proceeded in her absence and she was found guilty of the allegations brought against her. A sanction of summary dismissal was imposed by the employer.

In keeping with previous decisions in Mtati v KPMG Services (Pty) Ltd [2017] 3 BLLR 315 (LC) and Naidoo v Standard Bank of South Africa [2019] 9 BLLR 934 (LC) the employee brought an urgent application asking the LC to declare that (a) the employer was not within its right to insist she work out her notice period and (b) the sanction of dismissal is ‘null and void’.  The LC granted the order in favour of the employee.

The employer thereafter approached the LAC to have the LC judgment set aside. The LAC held that –

(1) the idea that an employer can’t compel an employee to continue to work until the end of the contractual notice period due to the resignation being a ‘unilateral act’ is misguided;

(2) like all contractual provisions, a notice provision must have some meaning; despite the immediate resignation the notice provision remains valid and binding unless waived by the employer; and

(3) repudiation terminates the contract of employment only if the interested party (the employer) elects not to act on it, i.e. call for specific performance.

The LAC ruled in the employer’s favour and the LC judgment was set aside.  

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 accept the employee’s repudiation, cancel the contract and claim damages.

Based on the above, an employee can not evade disciplinary action by simply resigning with immediate effect. By an employer notifying the employee that he/she is required to work the notice period, the repudiation of the contract of employment is not accepted, and the employer keeps the employment relationship ‘alive’ until the end of the notice period. While resignation need not be accepted by the employer to become effective, the parties remain bound to the contractual terms if the employer does not waive its right to have the employee work his/her notice period.