Mthimkhulu v Standard Bank of South Africa (J 928/20) [2020] ZALCJHB 201; [2021] 1 BLLR 86 (LC) ; (2021) 42 ILJ 158 (LC) (18 September 2020)

Key Facts

Transaction Type

Issues

• The legal effect of a resignation before the announcement of a sanction of dismissal, specifically whether such a resignation can prevent the employer from proceeding with the dismissal.
• The requirement under the Labour Relations Act that a dismissal dispute must first be referred to conciliation, and the implications if it hasn't been, on the Labour Court's jurisdiction.
• The Labour Court's jurisdiction to set aside a dismissal under the Labour Relations Act, particularly regarding whether it can address unlawful dismissals that haven't undergone conciliation.

Holdings

• The Labour Court lacks jurisdiction to set aside a dismissal on grounds of unlawfulness. Such disputes must first be referred to conciliation under the Labour Relations Act, and this matter was not subjected to that process.
• The resignation by Mthimkhulu before the announcement of a dismissal sanction has no legal effect. The Labour Court concluded that an employee who resigns during a disciplinary process cannot claim constructive dismissal, and the employer retains the right to proceed with the disciplinary outcome as the contract was not cancelled by the employer.
• The application to set aside the dismissal is dismissed with costs. The applicant is required to pay the respondent's costs following the Court's determination of lack of jurisdiction.

Remedies

• The application is dismissed.
• The applicant is to pay the costs of this application.

Legal Principles

• The court emphasized that a valid resignation is a unilateral act that does not automatically terminate the contract. The employer retains the right to proceed with disciplinary actions if they elect to keep the contract alive, as the Bank did by not canceling Mthimkhulu's employment despite his resignation. This aligns with the principle that parties must uphold their contractual obligations unless legally released.
• The Labour Court lacks jurisdiction to set aside a dismissal on grounds of unlawfulness under the Labour Relations Act. Disputes about unfair dismissal must first be referred to conciliation. Since this matter was not conciliated, the court could not entertain it.

Precedent Name

• Lt General Shezi v SAPS and others
• Toyota South Africa Motors (Pty) Ltd v CCMA and others
• September and others v CMI Business Enterprise CC
• Singhal v Ernst & Young Inc and another
• AMCU and Others v Ngululu Bulk Carriers (Pty) Ltd
• Naidoo and Another v Standard Bank Ltd and Another
• Mzotsho v Standard Bank of South Africa (Pty) Ltd

Key Disputed Contract Clauses

• The employment contract stipulated a 30-day notice period, which the Bank refused to waive after Mthimkhulu's resignation, asserting the contract remained valid until the notice period expired.
• The dispute centered on whether the Bank retained the right to announce dismissal as a disciplinary sanction after Mthimkhulu's resignation but before the formal announcement, based on the contractual obligations of both parties.

Cited Statute

• Labour Relations Act (No. 66 of 1995, as amended)
• Basic Conditions of Employment Act (No. 75 of 1997)

Judge Name

Passage Text

• [13] The above is a clear statement that the contract of employment was not cancelled by the Bank despite the repudiation by Mthimkhulu. The election to cancel lies with the aggrieved party and not the aggressor.
• [10] The minority judgment by Zondo J and the separate but concurring with the majority judgment by Wallis AJ dealt with the issue. I am inclined to agree with the minority judgment on this issue of the effect of resignation prior to dismissal.
• [7] This Court is not satisfied that this matter is urgent. However, since hearing a matter on an urgent basis involves an exercise of discretion, given the apparent importance of this matter I exercise my discretion and hear this matter as one of urgency.

Damages / Relief Type