Resignations

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Resignations – The Basics 

Jan du Toit

 

For some reason employers and employees are still extremely confused when it comes to resignations and the subsequent issues that may arise. Let us first look at notice periods as described in the Basic Conditions of Employment Act – section 37.

 

The Act prescribes notice periods not less than;

 

a)  one week, if the employee has been employed for six months or less;

 

b)  two weeks, if the employee has been employed for more than six months but not more than one year;

 

c)  four weeks, if the employee--

 

i)   has been employed for one year or more; or

 

ii)  is a farm worker or domestic worker who has been employed for more than six months.

 

From the above it is clear that the Act does not make provision for a resignation with a notice period shorter than one week. In other words an employment contract may not allow for notice periods shorter than the periods indicated above, the employer and employee may however agree on notice periods longer than the minimum prescribed periods. As per section 37(3) it is required that such notice periods must be applicable to both parties. Employers and employees are advised to carefully consider the notice periods that they agree upon since it could have far-reaching consequences in the future. It may be that a three month notice period is agreed upon but the employee receives a job offer and cannot accept because he / she must first serve a three month notice period. On the other hand it could be that the company decides to retrench employees and then have to honour the three month notice period agreed upon or pay the employee for the notice period if he / she is not expected to work during the notice period.

 

Employees must understand that if they agree to a notice period longer than the minimum prescribed by the Act, they cannot later claim that the Act only requires four weeks’ notice. It is important to remember that according to section 37 (4) (a) notice of termination of the employment relationship (includes a resignation) must be done in writing and once accepted by the employer there would be nothing compelling the employer to accept a request to withdraw the resignation if the employee later changes his / her mind.

 

Work during notice period

The Act further demands that an employer must pay an employee for his / her notice period if the employer does not want the employee to serve / work his or her notice period. Assuming that an employee works with confidential information and as such pose a potential risk for the company during the notice period, the company may require that the employee leave prior to the completion of the notice period; provided that the employee is remunerated for the remainder of the notice period. Such a request from the employer will not be seen as a dismissal because section 38 (2) of the Act makes provision for such an arrangement. Should the employee on the other hand indicate that he or she is not willing to serve the full notice period then the employer does not have to remunerate the employee for the remainder of the notice period.

 

When may notice be given?

Section 37 (5) of the Act states that;

 

Notice of termination of a contract of employment given by an employer must--

 

a) not be given during any period of leave to which the employee is entitled in terms of Chapter Three; and

 

b) not run concurrently with any period of leave to which the employee is entitled in terms of Chapter Three, except sick leave.

 

In other words an employer may not give notice of the termination of the employment relationship during any period of leave that the employee is entitled to such as sick leave, annual leave, maternity leave or family responsibility leave. It is further prohibited to give notice of the termination of the employment relationship a day or two before the employee goes on annual leave in order to ensure that the employee’s annual leave will run concurrently with the notice period.

 

Section 20 (5) (b) further prohibits an employer from requiring or allowing an employee to take annual leave during a period of notice.

 

24 Hours Notice

I often get asked by frustrated employers what rights they have if an employee failed to serve the notice period agreed upon. Unfortunately there is not much that an employer can do other than to refer the matter to a civil court. In such a case the employer will have to prove that the business has suffered damages as a result of the breach of the employment agreement that existed between the two parties. This is a costly exercise and employers will have to weigh up the damages that they suffered against the cost of pursuing this matter in court.

 

Unfortunately it is also not possible to withhold the final salary or accumulated annual leave of such an employee unless it was agreed to. In other words the employer must still pay the employee even though he / she failed to serve notice and the employer as a result suffered damages. Section 34 of the Basic Conditions of Employment Act prohibits deductions from an employee’s salary without the written consent of that employee. Careful consideration must be given to what would constitute an agreement to withhold the final salary and accumulated annual leave of the ex-employee in lieu of notice not served. We strongly recommend that such an agreement is included in the contract of employment or that a separate agreement is entered into with the employee in order to avoid having the civil courts as the only recourse. It is extremely important that such an agreement must indicate that the employee gives his / her express consent for such a deduction or withholding of payment.

 

What is a calendar month?

This is another area of mass confusion between the employer and employee. The contract of employment clearly states that an employee must give a calendar month’s notice, the employee therefore tenders his resignation on the 15th of the month arguing that a calendar months could be from the 15th of one month to the 15th of the following month and doesn’t necessarily have to be from the 1st to the 31st of a month. In his book, Interpretation of Statutes (Juta & Co. Ltd, first edition), Professor G.E. Devenish describes a calendar month as;

 

“A calendar month is a month according to the almanac or common calendar. A calendar month is therefore not a fixed number of days but varies according to the Actual month concerned. A calendar month need not necessarily run from the beginning of a month. In ascertaining a certain number of calendar months the civil method of computation is used: the first day of the period is included and the last day excluded. However the application of this definition is ambiguous. The term “calendar month” may be interpreted in two ways: either as a month as it appears on the calendar, (1 January until 31 January) or a month reckoned in terms of one day in a particular month until the corresponding day of the next month; thus for example, from the fourth day of March until the fourth day of April. Both possibilities arise in practice.”

 

From the above it is clear that both the employer and employee could be correct in their interpretation of a calendar month and we therefore recommend that employers indicate in contracts of employment that notice must be given between the 1stand the 3rdof a month in order to ensure that employees serve a complete month as notice.

 

Too much notice

It often happens that troublesome employees give far too much notice in anticipation of being remunerated for their notice periods instead of requiring them to serve the excessively long period of notice. It could also be that the employee works with sensitive information and poses a real risk to the employer if allowed to continue employment during the period of notice, especially if the employee is going to work for the competition.

 

This is exactly what happened in Uthingo Management (Pty) Ltd v Shear NO & others (2009) 18 LC 7.1.1, reported in Butterworth’s [2009] 6 BLLR 590 (LC).

 

Two employees tendered their resignations respectively on the 19thand 26 of February 2007 indicating that their last working day would be the 31stof March 2007. The employees knew that they would receive bonuses if they were still in the service of the employer at the end of March 2007. Obviously the employer was not impressed by this, especially since the two employees accepted employment at its competition. The employer noted that contractually the employees agreed to give four weeks’ notice and subsequently accepted their resignations indicating that the employees last working days would be on the 19thand 26thof March 2007 respectively.

 

The two employees challenged this and argued that a dismissal took place as the employer changed the terms of employment prior to the last working day they indicated on their resignation letters. The CCMA Commissioner, incorrectly, agreed with the employees’ argument that the purpose of giving more notice than required was for the employer to make the necessary arrangements to replace the employees. The Commissioner subsequently ruled that the actions of the employer constituted an unfair dismissal. The Labourcourt however disagreed with this finding and Judge Molahlehi in his judgement referred to the remarks of Judge Spoelstra in Humphries & Jewell (Pty) Ltd v Federal Council of Retail & Allied Workers Union & others (1991) 12 ILJ 1032 (LAC) at 1037G; “ the fact that the respondent erred by referring to a notice period when the repudiation was acted upon, is in my view not relevant to the issue before us, it should not be left to an employee to dictate the terms on which his employer should accept his repudiation.”

 

Judge Molahlehi accordingly substituted the award of the Commissioner with this one.

 

a.   The applicants, Mr Du Plessis and Mr Mills, were not dismissed.

 

b.   Mr. Du Plessis and Mr. Mills voluntarily resigned from the employ of the respondent.

 

c.   The CCMA, does not have jurisdiction to entertain the dispute.

 

From this case it is clear that employers do not have to accept extended notice periods that they did not agree upon. Employers would be within their rights to revert back to the agreement reached upon commencement of employment and to insist on the agreed (shorter) period of notice.

 

For more information contact This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

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