Resignation

Most of us have entered into employment agreements with our employers or employees. Most employment agreements contain provisions regarding the termination thereof, especially concerning the notice period of resignation.

The question is now what can an employer when an employee resigns without giving the notice required in terms of the employment agreement? Can an employer, in such circumstances, claim the employee's salary in respect of the notice period not worked?

The Labour Court was requested to answer these questions in the matter of South African Music Rights Organisation Ltd v Mphatsoe (2009) 7 BLLR 696 (LC).

The facts of this case can be summarised as follows: Mphatsoe's employment agreement provided that his employment was terminable on one calender month's notice. When he returned from leave on 8 January 2008, he handed in his letter of resignation, which stated that he gave notice and that he would leave on 31 January 2008. SAMRO informed him that his notice did not comply with the provisions of his contract, because the notice was supposed to run from the first day of the month. It was further argued by SAMRO that his notice would only become effective on 1 February 2009 and that the notice period would therefore expire on 29 February 2008. Mphatsoe conceded that his notice period would not expire on 31 January 2008, but he argued that the notice period would expire on 8 February 2008. He then left SAMRO on 8 February 2008.

SAMRO proceeded to approach the Labour Court for an order in terms of Section 77(3) of the Basic Conditions of Employment Act, Act 75 of 1977, declaring that Mphatsoe's notice on 8 January 2008 was ineffective to terminate his employment agreement, that the employment agreement only terminated on 29 February 2008 and that Mphatsoe breached the agreement when he left work on 8 February 2008. SAMRO further sought damages in the amount of R 185-12, namely the amount Mphatsoe would have received in remuneration had he remained in employment until 29 February.

Regarding the requirement of a "calender month's notice" the Court agreed with the decision of the Labour Appeal Court in the matter of Edgars Consolidated Stores Ltd v Federal Council of Retail and Allied Workers Union (2004) 25 ILJ 1051 (LAC) which held that a "calender month" does not necessarily start on the first day of the month. What is required is to ascertain the intention of the parties to the agreement by way of interpretation. The Labour Court thus proceeded to analise the employment agreement as a whole, and reached the conclusion that by using the term "calender month" in the notice clause, the parties had clearly intended a different meaning, namely, that notice would take effect from the first day of the month and run to the last day of the month. Thus, it was held that Mphatsoe did indeed breach his employment agreement when he failed to work until 29 February 2009.

As regards the damages, the court held that an employer could not rely on the Basic Conditions of Employment Act, 1983, anymore. Thus an employer seeking damages due to an employee's failure to work the contractual notice period should prove such damages. The court observed that it is conceivable that the failure to work the contractual notice period could, in certain circumstances, not cause any damages at all, whereas in other circumstances the damages concerned could be well in excess of the remuneration the employee would have earned. SAMRO did not manage to prove its damages, and thus the claim for damages was dismissed.

Note: It is conceivable that an employer may accept the resignation of the employee, even if such notice does not comply with the provisions of the employment agreement. It is, further, conceivable that an employer may even inform the employee that he accepts the notice with immediate effect, that the employee must immediately leave his work place, and that he will still receive his full salary for the notice period.

What is constructive dismissal?

Definition of constructive dismissal

Constructive dismissal means the employee resigns and claims that the resignation occurred as a result of the employer's intolerable conduct. The employee further claims that he actually did not want to resign. Because of the fact that the employee alleges that the resignation was involuntary and was intentionally or unintentionally coerced by the employer, the resignation thus becomes a constructive dismissal.

Requirements to establish constructive dismissal:

To convince an arbitrator or judge that unfair constructive dismissal has taken place the employee must show that:

• The employment circumstances were so intolerable that the employee could truly not continue to stay on;
• The unbearable circumstances were the cause of the resignation of the employee;
• There was no reasonable alternative at the time but for the employee to resign to escape the circumstances;
• The unbearable situation must have been caused by the employer;
• The employer must have been in control of the unbearable circumstances.

Section 186 (1) (e) of the Labour Relations Act includes in the definition of dismissal the situation where "… an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee".

It should be noted that not all questionable acts of the employer will always constitute unfair constructive dismissal. This will depend on the extent to which the employer's conduct falls within the five tests for constructive dismissal as set out above.

Interpretation of the 5 (five) tests:

Employers need to be careful in interpreting the meaning of these five tests.

For example, test number 3, where the employee must show that he had no reasonable alternative but to resign, must not be simplistically interpreted.

For instance, it is often the case that the employee theoretically has the option of remaining in the employment relationship and referring an unfair labour practice to the CCMA or other tribunal.

Where the employee fails to do so and resigns instead, this will not always mean he has failed test number 3. Passing this test will depend a great deal on whether, under the circumstances at the time, the employee could reasonably have been expected to stay in the employer's employ for purposes of referring the unfair labour practice dispute.

Truly unendurable circumstances would make such a route unreasonable.

Employees must be equally careful not to misinterpret the law. Where, for example, an employer notifies an employee of a disciplinary hearing, this could genuinely be seen as unbearable to the employee.

However, a resignation by the employee for purposes of avoiding the disciplinary hearing is unlikely to constitute unfair constructive dismissal.

For example, in the case of Mvamelo vs AMG Engineering (2003,11 BALR 1294) the employee was informed he was to face a disciplinary hearing for theft and that criminal charges would also be laid. He resigned and claimed constructive dismissal, but lost the case because it was found by the arbitrator that he had resigned to avoid the disciplinary steps of which he had been notified.

However, where disciplinary steps have been taken unfairly and this renders the employment circumstances intolerable, this can constitute constructive dismissal. In the case of Solidarity obo Van Der Berg vs First Office Equipment (Pty) Ltd (2009, 4 BALR 406) the employee was found to have been performing his work poorly. As a result the employer decided to stop paying him his salary and replaced it with a commission structure.
The employee resigned and went to the CCMA, where it was found that the employee had been a victim of unfair constructive dismissal. This was because the employee could not be expected to continue employment under such intolerable circumstances.

Conclusion

It is not possible to outline each and every possible act of constructive dismissals. Each case must be evaluated on its own merits.