Resignation means different things and depends on the nature of the underlying contractual or other relationship.  Some persons may resign without having to provide any notice and may do so informally.  In some instances resignations have to be accepted.  In other words it becomes an offer to leave and only becomes effective when it is accepted.

With regard to employees both the common law and the BCEA, but not the LRA, require reasonable notice to terminate an employment relationship. There are exceptions, such as death, impossibility of performance and expiry of an agreement based on age or the completion of a project.  Age is contentious because it suggests that employers have a right to discriminate and this still needs to be properly understood.

Notice to terminate

Generally speaking employees may ‘resign’ by notifying the employer in writing of the decision, and  unless otherwise agreed, they must tender their services during the notice period.  Employers are not legally required to accept resignations.  But employees who ‘resign’ without notice may allow employers to treat it as a ‘repudiation’ and cancel the contract either summarily or on payment instead of notice.

Once accepted a resignation may not be withdrawn except by mutual agreement.

Doubt has now been cast over the right of employers to contest the withdrawal of a resignation before final acceptance.  See Resignation: Potential shades of grey.

Toyota’s blunder

This brings us to the recent Toyota judgment where the employer unsuccessfully relied on the employee’s resignation.  Toyota simply disregarded the employee’s letter terminating the contract on notice.  During the notice period the employer alleged a reason for dismissal, followed a procedure and then dismissed, presumably without notice, about a week before the contract was due to expire.

Toyota only appears to have argued that the employee had resigned at the appeal stage.  It seems that it only has itself, or its advisors, to blame for being forced to reinstate the employee with substantial back-pay, estimated at R2 million by Zondo J, who dissented.

It seems Toyota was intent on disciplining and dismissing the employee.  Toyota could have accepted the ‘resignation’, paid the employee out for the balance of the notice period.  The contract would then have ended by ‘mutual agreement’ and there would not have been any ‘dismissal’ to refer to the CCMA.

No automatic termination

Under our common law a breach of an employment contract does not automatically result in termination.  There are reciprocal rights and duties, so our law deliberately refrains from dictating to the parties.  Our law respects the autonomy of the parties and simply provides options.

The aggrieved party has choices depending on the nature and extent of the breach.  Party A may accept B’s breach and lawfully terminate on reasonable notice.  Alternatively A may treat B’s serious breach as a repudiation and cancel the contract summarily; but then A must prove the material breach.

Alternatively A may decide to retain the relationship and claim damages resulting from the breach.  A may also decide to keep the contract going but inform B that the breach has seriously damaged the employment relationship and warn that it cannot continue if trust and confidence is further damaged or the relationship becomes intolerable.

Notice requirements

But our law does insist that an employment relationship can only be ended on reasonable notice, unless it can be proved that there was a material breach.  The common law was supplemented by legislation in 1979.  The novel concept of an ‘unfair labour practice’, based on the thinking of the ILO Recommendation in 1963, was introduced into our law following the acceptance by the government of the recommendations of the Wiehahn Commission in 1979.

It is very important to understand what actually was intended.  The common law regarding notice was not changed at all.  All that changed was the requirement for employers to justify any ‘dismissal’, whether lawful or unlawful, by proving a valid and fair reason after following a fair procedure.

With regard to procedure this simply meant allowing the employee to respond to any allegations and in effect to be ‘heard’.  No formal enquiry or hearing has ever been required.  With regard to the reason it could take various forms, provided only that there was a ‘commercial rationale’, in the words of Martin Brassey.

So to be rational and justifiable the vaid and fair reason has to

    • relate to the employee’s conduct or capability, or
    • be based on the ‘operational requirements’ of the enterprise.

Consequences of fault

It is important to note that under the common law, and even labour law, fault as such is not a legal or jurisdictional requirement to end an employment contract.  This is perfectly logical because if fault was required employers would never be able to base the reason for dismissal on the ‘operational requirements’ of the enterprise.

The common law and the BCEA insist on employers providing reasonable notice to terminate employment.  But notice is not required when the reason is related to a  material breach of contract by the employee.

In the words of the BCEA notice is not required if there is a ‘cause recognised by law as sufficient’ to terminate without notice.  In plain language it simply means employers may terminate summarily, or without notice, by proving serious or gross misconduct.  This would usually include crimes and gross insubordination.

Nutshell

Generally managers cannot prevent employees from ‘resigning’ on notice.  But if they do the contract can be ended by mutual agreement forthwith provided money is paid instead of working out the notice period.  The employee will not be able to refer an alleged ‘unfair dismissal’ to the CCMA because the employee is not ‘dismissed’, as defined in the LRA.

If managers attempt to discipline the employee during the notice period they run the risk of the dismissal being regarded as unfair and reinstatement being ordered, as in the Toyota matter.