INTRODUCTION

In the instance where an employee commits gross misconduct, an appropriate and reasonable sanction may be dismissal. However, does a dismissal sanction still have effect under circumstances where an employee resigns prior to the sanction being imposed?

In the case of Mthimkhulu v Standard Bank of South Africa (2021) 42 ILJ 158 (LC), the Labour Court (“LC”) was tasked with determining whether the Applicant avoided the sanction of dismissal by ‘beating their employer to the punch’ and resigning subsequent to the disciplinary hearing but prior to the dismissal sanction being imposed or whether the resignation may be deemed invalid.

BACKGROUND

Pursuant to a disciplinary hearing, the Applicant was found guilty of gross dishonesty and fraudulent misconduct. The Respondent afforded the Applicant an opportunity to present factors in mitigation of the sanction to be imposed. The Applicant responded by resigning with immediate effect.

In reply, the Respondent elected (instead of accepting the Applicant’s repudiation of his employment contract, which required him to serve a thirty day notice period), to enforce specific performance of the employment contract by holding the Applicant to his notice period. Two days later, the Respondent dismissed the Applicant.

The Applicant claimed that the Respondent lacked jurisdiction over him (and could not dismiss him) once he resigned, prior to the dismissal sanction having been imposed. The Respondent adopted the stance that the standard contractual thirty day notice period voided the Applicant’s resignation and that the dismissal was effective. The Respondent instituted urgent proceedings in the LC to set aside his ‘unlawful’ dismissal.

THE LC

The LC was required to determine what effect the resignation had on the dismissal sanction. The Court considered it apparent that the Applicant’s resignation was “a stratagem…[aimed at avoiding] the inevitable consequence…of dismissal”.

Although resignation is a unilateral act, which does not require any acceptance on the part of the employer, it does not necessarily take effect without bearing in mind other considerations.

A key consideration is whether the employee is required, in terms of their employment contract, to serve a notice period upon resignation. In this instance, the Applicant was required to serve a standard contractual thirty day notice period upon resignation. The notice period applied notwithstanding the Applicant having repudiated the employment contract by resigning with immediate effect.

Upon repudiation of any contract, the aggrieved party may elect either to:

1. cancel the contract and sue for damages; or
2. seek specific performance.

The LC concluded that, based on the Respondent’s election to enforce specific performance of the Applicant’s notice period obligations under the employment contract, the contract was kept ‘alive’.

The resignation was deemed to have no legal effect on the sanction of dismissal and accordingly, the Respondent was entitled to enforce the sanction.

The Court also held that it lacked jurisdiction to make a determination on the ‘unlawfulness’ of the Applicant’s dismissal – in so far as he contended that contractually the Respondent had no powers to dismiss him. For the LC to have jurisdiction to preside over a dismissal dispute, the fairness of the dismissal must first be referred to the Commission for Conciliation Mediation and Arbitration.