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Further consideration is needed with regard to the judgment of Halton Cheadle in this case in the light of the latest Constitutional Court case in the Toyota matter. Wallis AJ, supported by two other judges, has questioned the notion that a resignation should always be regarded as a unilateral act that has the effect of ending the employment relationship.
When a resignation is not wrongful and the necessary period of notice is given it is understandable that the contract will end on the expiry of the notice period. Perhaps the same argument can be used when the resignation is on ‘short notice’. But when the resignation is expressed to be immediate surely it amounts to a breach of contract? If this is so then it does not end the contract and allows the employer to treat it as a repudiation and cancel the contract, or hold the employee to the contract until proper notice if given.
This is important for some employers who are obliged by agreements with others to establish whether employees who have worked for them have done something that needs to be reported to protect other employers from employing them.
If that is so then employers can reject the summary resignation and conduct a full investigation with the necessary right to be heard before taking a final decision.
See Muthusamy v Nedbank Ltd (2010) ILJ 1453 (LC) per K Tip AJ.
Extracts from an article by Whitear-Nel and Alli Is resignation vitatited by the failure to give proper notice? A discussion of Lottering & others v Stellenbosch Municipality (2013) 130 SALJ 18 at 23.
“The court disagreed with the applicants’ argument that the act of resignation could not be separated from the act of giving deficient notice, and that therefore the act of resignation was itself a repudiatory breach of contract which would have no legal effect unless the employer chose to respond to it by cancelling the employment contract in response. The court held that the act of resignation and the giving of notice thereof were two distinct elements, which had to be considered separately (Lottering para 17).
It is submitted that this approach is wrong because it ignores the fact that the right to resign, as contained in the applicants’ contracts of employment, was a conditional right. It was subject to the condition that 30 days’notice be
given. As such, the right to resign was dependent for its existence on the fulfillment of the condition. Public policy determines whether contractual terms in a contract of employment are enforceable, but this is a separate issue.
. . . .
This approach is in contrast to the views expressed by learned authors Brassey and Grogan, both of whom make general statements to the effect that if a resignation is in breach of contract, it is a repudiation and thus must be acted upon by the employer for it to have legal effect (Martin Brassey Employment and Labour Law vol 3 (1998) A8-26; John Grogan Dismissal, Discrimination and Unfair Labour Practice 2 ed (2007) 157, cited in Lottering para 24). Their view, in other words, is that if deficient notice is given, and the employer does not waive the outstanding notice or cancel the contract in response to the repudiatory breach, the purported resignation will have no legal effect on the employment relationship. Cheadle AJ explained that the authors’ statements are taken from works which are intended as ‘broad summaries of the law seeking to encapsulate both fixed term and indefinite contracts and termination by cancellation or notice’ (Lottering para 25). He found that they were not appropriately relied upon by the applicants in the context of their case, but added that ‘if these summaries do represent [the authors’] views in respect of termination on notice, I must respectfully disagree with them, because as a matter of principle a decision to terminate on notice can never be a repudiation or breach, although the failure to properly give notice may do so. The breach is not the decision to terminate, but the failure to give proper notice’ (Lottering para 25). This, Cheadle AJ found, is the correct way to interpret the case of Nationwide Airlines (Pty) Ltd v Roediger & another (2006) 27 ILJ 1469 (W): the breach of contract in that case was the giving of deficient notice, not the act of termination.
. . . .
CONCLUSION
It is our submission that the reasoning on which the Lottering decision is based is wrong, and unnecessarily convoluted (although we do agree with the final outcome of the case). The applicants were employed in terms of fixed term contracts of employment and their right to resign was conferred on them by an express contractual term. The right to resign was unambiguously conditional upon their giving thirty days’ notice. This condition was not fulfilled. Ordinarily, therefore, their purported resignations would not take effect. However the resignation clause also provided that the respondent could waive any part of the notice period, and that is exactly what it did when it confirmed that the applicants’ last working day would be 30 November 2009: a date falling before the expiry of the proper notice period. Thus, the condition upon which the applicants’ right to resign depended was waived, and the applicants’ acts of resignation took legal effect.
. . . .
Possibly, the approach of the court was influenced by an awareness of the potential unfairness that could be perpetrated on an employee by preventing his resignation from taking effect where he has indicated his unwillingness to continue to work by tendering a resignation, albeit a defective one. This echoes the general distaste the courts have shown for forcing employees to work against their will — exhibited in their traditional reluctance to enforce specific performance as a remedy for breach of an employment contract (Van Jaarsveld & Van Eck op cit at 98). What must not be ignored, however, is the strong argument that parties should be required to comply with their contractual obligations in all circumstances other than where this would be inimical to public policy (Bredenkamp v Standard Bank 2010 (4) SA 468 (SCA) paras 36–40). The application of the maxim pacta sunt servanda in the employment context does raise the issue of power imbalances between the contracting parties. However, this issue has been addressed through legislation, which is surely preferable to permitting ‘idiosyncratic decision-making’ on the basis of the slippery and vague concept of fairness (F D J Brand ‘The role of good faith equity and fairness in the South African law of contract: The influence of the common law and the Constitution’ (2009) 126 SALJ 71 at 89)”.