Employer’s Legal Rights Regarding Resignation

HEREWITH A BRIEF LEGAL SUMMARY TO UNDERSTAND YOUR RIGHTS AND THE LEGAL POSITION WHEN YOUR EMPLOYEE RESIGNS:

• The court clarified that a resignation involves two separate elements.
• The unilateral act of resignation; and
• The requirement to give notice.
• In other words, an employee decides to resign alone without requiring your input or agreement.

Notice Given

If the employee doesn’t give proper notice, it creates a breach of contract, though it does not make the resignation invalid. Should this occur, you as the employer can decide to either accept the breach and waive the notice period, or you can hold your employee to the notice period. If you choose to hold the employee to the notice period, she must work out the full notice required and if she doesn’t the employer can claim for damages.

An employee must give a minimum period of notice, which depends on how long she was employed, and ranges from one to four weeks. (Section 37(1)(c) of the BCEA). But you can waive any part of that notice provided you pay the employee in lieu (Section 38(2) of the BCEA). If notice is given and you don’t waive the notice period then the contract terminates on expiry of the notice. If you waive any part of the notice, the contract terminates when the employee leaves work.

Some things to consider when dealing with resignations:

• When your employee resigns and you accept her resignation, you should confirm your acceptance in writing.  For example, state that you acknowledge receipt of the letter of resignation and confirm that you have accepted the resignation. In this letter you can confirm the terms that are applicable, for example:

"We confirm that you have indicated that you do wish to work out your notice period of one month and that you requested to take leave and that your leave has been granted" 

"We confirm that we are willing to waive your notice period so that you may commence employment with your new employer immediately. We confirm that your last working day will be this Friday 24 August 2007. Because you are not working your notice period, you are not entitled to notice pay. We will ensure that all your accrued leave is paid out to you.A resignation brings the employment contract to an end immediately or at the end of the notice period, depending on what is accepted by the employer.  The contract doesn’t terminate on the date the notice is given. It only terminates when the notice period expires (unless you waive the notice requirement)."

• A resignation brings the employment contract to an end immediately or at the end of the notice period, depending on what is accepted by the employer.  The contract doesn’t terminate on the date the notice is given. It only terminates when the notice period expires (unless you waive the notice requirement).
• A resignation terminates the employment relationship. The Basic Conditions of Employment Act says that you are required to provide your employee with a certificate of service when she leaves your employment, irrespective of the reason why she leaves your employment. Therefore, when your employee resigns, you are required to provide her with a certificate of service.
• When an employee resigns she is normally obliged to work out the notice period that is stated in her contract of employment or that is required by law. This is because the purpose of a notice period is to allow you to find a replacement and ensure there is a smooth hand-over so business can continue without interruption despite the employee’s resignation.   If your employee resigns without giving you notice as required by law or in terms of the employment contract, she is in breach of contract and you don’t have to pay notice pay in such a situation. If, after she’s given notice, the employee doesn’t work out her notice period you don’t have to pay her (no work, no pay). If the employee gives late or short notice that’s a breach of contract, you can either hold the employee to what’s left of the contract or cancel and sue for damages.  If the employee doesn’t give proper notice and you choose to hold her to the contract, then the contract terminates after the full period of the notice.
• An employee can’t take leave during the notice period when you’ve given notice, but she can take leave when she was the one who terminated the contract by resigning.  Employers usually don’t allow employees to take annual leave during their notice period so as to ensure continuity of business and a smooth hand-over. In some cases, you may prefer the employee to take leave BUT this is not allowed under the Basic Conditions of Employment Act which says that notice can’t run concurrently with any period of leave to which the employee is entitled under the BCEA (except sick leave). This means your employee also can’t give notice while she is on leave. You can decide if you’d prefer your employee who’s resigned to take leave so she doesn’t have to report to the workplace during her notice period. Confirm that the employee has requested the leave and that you’ve granted it in writing.
• BCEA says that where an employee resigns and the employer waives any part of the employee’s notice period, the employer must pay the employee notice pay unless the employer and the employee agree otherwise. Therefore, if you waive your employee’s notice period and do not wish to pay her notice pay, you must agree this with her.   If you arrive at an arrangement to waive your employee’s notice period and not to pay notice pay, you should get the employee to sign a written agreement to avoid the possibility of a later dispute. This can be in the form of a simple letter.
• Circumstances may arise where your employee has access to sensitive company or business information or client contracts and you don’t wish her to continue to come to work during her notice period because you are of the view that there is a potential risk of the disclosure of this confidential information. You may, therefore, agree with your employee that she won’t come into the office during her notice period. In these circumstances, your employee’s employment will only terminate at the end of her notice period but she will not report for duty during her notice period and will be allowed to stay at home. This sort of arrangement is often referred to as garden leave because the employee is paid to be at home.
• Termination pay means the payment legally due to your employee when she leaves your employ. An employee who resigns will be entitled to the termination pay that is due to her.  Termination pay must be calculated given the circumstances of each resignation.Termination pay is calculated with reference to an employee’s remuneration and not her basic salary or wages. This means that not only basic salary must be included but also any other payments that you make to your employee on a regular basis for the work that she does for you.
• A restraint may also include undertakings by an employee that for a specified period she will not:When hiring new employees it is always important to check whether they are under a restraint in favour of their previous employer. If you are aware of a restraint which stops an employee joining a competitor and you hire that employee, you may expose yourself to litigation and a possible claim for damages.

A restraint may also include undertakings by an employee that for a specified period she will not:

1. encourage clients/customers to take their business away from her employer;
2. encourage suppliers to stop supplying or to change the terms of their supply arrangement with her employer; and
3. encourage other employees of her employer to leave their jobs to join a competitor.

• A confidentiality undertaking is an agreement between an employer and an employee that the employee will not disclose or use the employer’s confidential information other than as permitted in terms of their employment relationship for purposes of furthering the employer’s interests. An employee who has signed a confidentiality agreement and who discloses or uses confidential information after she has resigned, acts in breach of her employment contract and the employer can enforce the confidentiality undertakings against the employee.  Even if your employee’s contract of employment does not contain a confidentiality undertaking, you are protected by the common law against unlawful competition by your employee using your confidential information.  Confidential information can include:

1. Business strategy and plans;
2. Trade secrets;
3. Marketing data and strategies;
4. Client lists and contacts;
5. Computer information; and
6. Technology and know-how

• When your employee resigns, you will need to make sure that she returns all company property in his possession. This could include:

1. her laptop computer/cell phone (if company owned);
2. tools and uniforms;
3. any other assets that you have given her to use while she is employed with you;
4. her company car;
5. any company credit cards and access cards that she may have had use of; and
6. all confidential information and documentation (including copies) as well as all computer programs.

Contribution thanks to Ilene Power – Labour Lawyer.

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