This loophole SA employees were using to dodge disciplinary hearings is now closed

Business Insider SA
  • Some South African employees have been dodging disciplinary action by resigning before hearings.
  • Employees who resigned were previously able to argue that they were untouchable, since companies lacked jurisdiction to go ahead with hearings.
  • A labour court has now set a precedent by declaring that employers can proceed with hearings even if the employee has resigned.

South African employees due to appear in disciplinary hearings have been exploiting a legal loop that allowed them to walk away without having answered to charges of misconduct.

"It is an increasingly frequent occurrence that when an employee is faced with disciplinary action, the employee elects to resign, with immediate effect, just before the disciplinary hearing takes place," say Ndumiso Zwane and Ngcebo Buthelezi, lawyers at Cliffe Dekker Hofmeyr, in a report.

That stripped the employer of the standing to continue with an inquiry.

Zwane and Buthelezi cite a recent court case involving a former KPMG employee, who ended up resigning twice. Kalipa Mtati was accused of failing to disclose directorships in several companies that were KPMG's competitors when she assumed employment with the accounting firm.

When KPMG told her there would be a disciplinary hearing, Mtati wrote to the company: "Please accept this letter as a notice of my resignation."

KPMG accepted the letter but reminded her that she was still in a notice period, and planned to continue its investigation.

Mtati responded with a second resignation, that "it is with deep regret that I must inform you I am resigning from my employment with the KPMG with immediate effect.”

This made Mtati untouchable as she was no longer in a notice period nor an employee of KPMG.

KPMG went ahead with the hearing, and found Mtati guilty of allegations against her and dismissed her. She took the firm to court, contending it lacked jurisdiction – and the court agreed with her.

Following that decision, employers were able to proceed with disciplinary action despite a resignation, if the employee resigns on notice and the disciplinary proceedings occur during the employee’s notice period.

But another landmark case has now closed down that route.

When Mark Coetzee, the former director of Africa's largest art museum Zeitz MOCAA was suspended after allegations of abusive behaviour towards young staff who had to sign non-disclosure agreements, he too resigned before a disciplinary hearing.

Resigned Mark Coetzee is no longer executive director and chief curator of the Zeitz Museum of Contemporary Art Africa. Picture: Edrea du Toit

The Zeitz still went ahead with the hearing and Coetzee challenged the process in the Labour Court. Contrary to the Mtati decision, the court ruled that employers are entitled to proceed with disciplinary hearings even after a resignation.

"Employees must remember that when they tender a letter of resignation, their employment contract does not immediately terminate upon handing the resignation letter to the employer," say Zwane and Buthelezi in an analysis.

The court also advises employers to be wary of accepting resignations with immediate effect from employees yet to attend disciplinary proceedings.