Finweek English Edition – August 15, 2019

a

n employee is faced with disciplinary

action, but then resigns with immediate

effect. Should the employer continue with

disciplinary action?

The labour law seems to be silent on what the

correct action by employers would be in such cases

and has left it to the discretion of the courts to

decide, says Ivan Israelstam, CEO of Labour Law

Management Consulting.

In the past three years there have been different

decisions on the matter in the Labour Court.

In the most recent case – Naidoo and Another v

Standard Bank SA Ltd and Another – the Labour Court

was called on to determine whether their resignation

with immediate effect meant the employment

relationship was immediately terminated. The

court found that it was.

But in a 2018 case the same court found

that an employment relationship only

terminates once the notice period has been

concluded.

In that case the court also held that

resignations with immediate effect are only

permitted where the employer has committed

a material breach of the employment

contract, or if the employer accepts the

resignation with immediate effect.

Johan Botes, head of Baker McKenzie’s

Employment Practice in Johannesburg,

says the effect of this recent case is that

employers cannot simply continue with

disciplinary action when the person resigns.

The court found that if the employer wanted

employees to honour the contract by serving their

notice period, it had to approach the court for a specific

“performance order” to hold the employees to the

employment contract and finish their notice period. If

the order is granted, the employer can continue with the

disciplinary action.

“In practice courts are reluctant to issue an order

for specific performance if it means holding someone

against their will,” says Botes.

Israelstam says if the employer has a good reason

for a disciplinary hearing, he would advise them to

continue with it.

“You would be protecting yourself against a potential

constructive dismissal claim and also be able to have on

the employee’s record that they were fired.”

He says employees may suspect, and sometimes it

is a genuine suspicion, that the employer has purposely

on the money management

By Amanda Visser

48 finweek 15 August 2019 http://www.fin24.com/finweek

Dealing with disciplinary action

Bringing disciplinary action against an employee is something most employers would hope to avoid. But when it

does come to pass, there are some important steps to follow.

Johan Botes

Head of Baker McKenzie’s

Employment Practice in

Johannesburg

charged them and called them to a hearing in order

to provoke a resignation, and not really because the

employee has done something wrong.

Employers who want to ensure that their action is

not misconstrued, should go ahead with the hearing

so that it is clear that it was not merely a ploy to get

rid of the employee.

If the employer feels there is a “more than likely

chance” of the employee claiming constructive

dismissal by saying they were “coerced into

resigning” because of the threat of disciplinary

action, the employer may feel more comfortable

holding the hearing and inviting the employee to

attend, says Israelstam.

But, according to Israelstam, until a higher court

such as the Labour Appeal Court makes

a ruling, things remain “really messy”. A

much better option would be to institute

criminal or civil action if there has been a

loss suffered by the employer because of

the employee’s conduct.

What about criminal charges?

“If the employer suffered a material,

quantifiable loss as a result of the

premature departure of the employee, the

employer is quite entitled to go to court and

sue the employee for the amount of that

loss,” says Israelstam.

Botes adds that if there has been evidence

of fraud or theft, the employer can lay criminal

charges. It is then up to the National Prosecuting

Authority to decide whether it will prosecute or not.

He says when an employer has to incur additional

expenses by bringing in an expert on short notice to

finish a project, or suffered a penalty because a project

could not be finished on time due to the sudden

resignation, it is entitled to claim the differential

(between the employee’s pay and the additional costs).

Be proactive

Employers can be proactive by making sure their

employment process will be able to catch people

whose conduct at a previous employer will not sit well

with their business.

Botes says employers may request a signed

undertaking from new employees that they have made

a full disclosure of all the facts that may impact on the

decision to employ them or not.

Israelstam advises his clients to request a

Ivan Israelstam

CEO of Labour Law

Management Consulting

“If the employer suffered a

material, quantifiable loss

as a result of the premature

departure of the employee,

the employer is quite

entitled to go to court and

sue the employee for the

amount of that loss.”