IN THE LABOUR COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
REPORTABLE
CASE NO: JR 2007/07
In the matter between:
UTHINGO
MANAGEMENT (PTY) LTD APPLICANT
and
LARRY
SHEAR N.O 1ST
RESPONDENT
COMMISSION FOR CONCILIATION,
MEDIATION
AND ARBITRATION 2ND
RESPONDENT
ANDRE
DU PLESSIS 3RD
RESPONDENT
CRAIG
MILLS 4TH
RESPONDENT
JUDGMENT
molahlehi
J
Introduction
This is an application to review and set aside the
award of the First Respondent (the Commissioner) dated 24th
June 2007, under case number GAJB12440-07 and GAJB12434-07. In terms
of the arbitration award the Commissioner found that the
applicant
had unfairly dismissed the third and fourth respondents, who I shall
in this judgment refer to as “the employees”
and where necessary
as “Mills and du Plessis”.
Background
The applicant was during 1999, granted the license to
operate the national lottery for a fixed period of 7 (seven) years,
which
expired on 31st
March 2007. In anticipation of the possibility of the non renewal of
the license at the end of the 7th
(seven) year the applicant entered into fixed term contracts of
employment with most of its employees including Mills and du
Plessis. Their contracts were to expire on 31st
March 2007.
During September 2005, the applicant resolved to reward
those of its employees who would still be in its employ as at the
date
of the expiry of the license being 31st
March 2007, by paying them a loyalty bonus. The purpose of the
loyalty bonus was to serve as an incentive to those of the employees
who remained in the employ of the applicant notwithstanding the
uncertainty of whether or not its licence would be renewed at
the
end of 31st March
2007.
The contracts of the employees were very similar, the
salient terms for purposes of the arbitration proceedings were as
follows:
“Clause 24 Notice Period
Both you and the company will be entitled on written
notice to the other to terminate this employment contract and the
following
notice periods and/or payments in lieu of notice will apply
–
It came to the attention of the applicant, during
February 2007, that both the employees were contemplating accepting
an offer
of employment with Gidani (Proprietary) Limited, the
applicant's competitor in the bid for the license after 31st
March 2007. They both ultimately accepted the offer but tendered
their resignations on different dates. The first employee tendered
his resignation in writing on 26th
February 2007, the effective date of such resignation being 31st
March 2007. The second employee tendered his resignation in writing
on 19th February
2007 and the effective date of such resignation being 31st
March 2007.
After receipt of both letters of resignation, the
applicant having adopted the view that because the employees had
been with the
applicant for more than 52 (fifty two) weeks, the
notice of termination should be 4 (four) weeks. The applicant
accordingly responded
to the letters of resignation and notified
them that their employment would terminate on the 19th
March 2007 and 26th
March 2007 respectively. The employees regarded this as a dismissal
by the applicant and therefore referred a dispute concerning
unfair
dismissal to the second respondent (the CCMA).
At the arbitration hearing the applicant argued that
the employees had unilaterally and voluntarily terminated their
services
and even if it was incorrect in its interpretation of
clause 24 of the employment contracts being the notice period
clause, this could
not in itself, constitute
a dismissal. It was further argued in this regard that the employees
had failed to discharge the onus of proving the
existence of a
dismissal.
The employees on the other hand argued during the
arbitration hearing that clause 24 of their employment contracts in
fact provided
for a minimum notice period and that they were each
entitled to give written notice in which they could indicate the
date on
which they wished their notice period to expire which in
this instance according to them would have been 31st
March 2007. They further argued that by requiring them to leave its
employ before that date, the applicant had dismissed them.
The grounds for review and the award
The Commissioner formulated the issue before him as
concerning, whether, by giving additional notice the employees were
entitled
to say that their services would terminate on 31st
March 2007, being a four weeks period as stipulated in their
contracts of employment.
The Commissioner found that the only purpose of giving
notice of intention to resign by the employees was to advise the
applicant
of their intention to terminate their services. The
Commissioner found further that the reason why the employees were
required
to give notice was to enable the applicant to make suitable
arrangements once the employees leave their employment. It was for
this reason that the Commissioner found that resignations of the
employees were effective only on the date stipulated in their
resignation letters.
The applicant challenged the arbitration award on the
basis that the Commissioner unjustifiably ignored the plain meaning
of
the employees’ contracts of employment in circumstances where
there was no basis to do so. The arbitration award is further
challenged on the basis that the Commissioner misdirected himself in
finding that the purpose of the notice period to allow the
applicant
the opportunity to make suitable arrangements after the departure of
the employees.
The other ground upon which the applicant challenges
arbitration award, is that the Commissioner committed a gross
irregularity
in finding that the employees were dismissed when
according to it they had resigned voluntarily and the applicant
simply applied
what it believed to be the correct interpretation of
their notice clauses in their contract of employment.
Evaluation of the award
An employment contract may be terminated by either an
employer or an employee by giving written notice except in the case
of illiterate
employees. Notice of termination of an employment
contract is regulated by section 37 of the Basic Condition of
Employment Contract
Act 75 of 1997 (the BCEA).
The basic principle which the Commissioner with due
respect in the present case failed to appreciate, is that once the
resignation
was accepted the employer has an election of either
letting the employee continue to render services for the remainder
of the
notice period or terminate the contract and pay the employee
in lieu of the notice period. It seems to me that the legal effect
of the acceptance of the resignation can only change if the notice
was ambiguous as to the exact intention of the employee. For
the
acceptance of the notice to give effect to the termination as
envisaged in the resignation, the notice must in the same way
as the
notice of dismissal be clear and unequivocal in that there should be
no doubt as to where the employee stand in relation
to his or her
continued employment. The intention of the employer in accepting the
notice must also be clear and unconditional.
In Chemical Energy Paper
Printing Wood & Allied Workers Union & Another v Glass &
Aluminium 2000 CC (2002) 23 ILJ 695
(LAC),
the Court held that:
“[33] Resignation brings the contract to an end if
it is accepted by the employer.”
In Fijen v Council for
Scientific & Industrial Research (1994) 15 ILJ 759 (LAC), Farlam
J (as he then was) said at 772C-D with regard to the test for
resignation that an employee has to 'either by words or conduct,
evidence a clear and unambiguous intention not to go on with his
contract of employment'. He went on to say that to resign he
has to
'act in such a way as to lead a reasonable person to the conclusion
that he did not intend to fulfil his part of the contract'.
See Cf
Tuckers Land & I Development Corporation v Hovis 1980 (1) SA 645
(A) at 653D-F.
In the English case of McAlwane
v Boughton Estates Ltd [1973] ICR 470 Donaldson
J said that:
“[33] Tribunals’ should not find an agreement to
terminate employment unless it is proved that the employee really did
agree with
full knowledge of the implications it had for him.”
“[34] The courts look for unambiguous, unequivocal
words to amount to a resignation (Hughes v Gwynedd Area Health
Authority [1978] ICR 161) and the courts did not find such to be so
when the employee was a mental defective and he uttered the words in
the heat of the
moment after an argument (Barclay v City of Glasgow
District Council [1983] IRLR 313).”
In Meyer V Provincial Department
of Health & Welfare & Others (2006) 27 ILJ 2055 (T),
the employer accepted the resignation of an
employee who was faced with a disciplinary hearing on a “without
prejudice” basis.
The employee later changed and contended that he
should be given an opportunity to attend the disciplinary hearing.
The Court
held that the effect of the acceptance of the offer to
resign was not affected by the “without prejudice” provision.
The
acceptance was found to be unambiguous and binding on both
parties. The Court found that the reason for this approach was that
the mutual cancellation of a contract is in itself a contract
whereby another contract is cancelled. In other words a notice
of
resignation is like an offer to terminate the contract of employment
and once unconditionally accepted constitutes a binding
contract.
In Fijen (supra) the
Court held that the test for determining whether a resignation is
valid or not, is whether the employee has ‘either in words
or
conduct, evince[d] a clear intention not to go on with his [or her]
contract of employment,’ the act must be such as to
‘lead to a
reasonable person to the conclusion that he did not intend to fulfil
his part of the contract. See Grogan, Work
Place Law 4th
Edition page 76.
The facts in Fijen
(supra) are
instructive. In that case the employee had in a letter informed the
employer that the relationship between him and the employer
was
‘permanently damaged’ and that he did not wish to continue with
his employment. The views expressed by the minority decision
are
apposite to the present case. The Court held in this regard that:
“This, in my view, constitutes a repudiation by the
appellant of essential elements of his contract of employment. The
remarks of
Spoelstra J in Humphries & Jewell (Pty) Ltd v Federal
Council of Retail & Allied Workers Union & others (1991) 12
ILJ
1032 (LAC) at 1037G are apposite: 'The relationship of trust,
mutual confidence and respect which is the very essence of a
master-servant
relationship cannot, under these circumstances,
continue.' The respondent accepted the repudiation, as he was
entitled to do, when
the applicant rendered it beyond doubt that he
really intended to convey what was said in his first letter. 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. Not even a spouse,
who has rendered it clear
through words, conduct or both, that a marriage relationship has
finally come to an end, can unilaterally
dictate the terms on which a
divorce order should be given and moreover insist that no such order
be granted save on his or her
terms”. The
underlining is my emphasis.
In my view the employees’ resignation letters were
clear and unambiguous. They through these letters communicated to
the applicant
where they stood in relation to their employment
contract. The heading of the letter dated 9th
February 2007 from du Plessis to the applicant states it all. It
reads as follows:
“RESIGNATION / TERMINATION OF CONTRACT: A DU
PLESSIS.”
In response to the above letter the applicant addressed
the letter to du Plessis wherein it is stated:
“…Dear Mr du Plessis
RE: LETTER OF RESIGNATION
We acknowledge receipt of your letter of resignation
on 19 February 2007 and confirm that we accept your resignation.
Please note that in terms of clause 24 of your
contract of employment, in the event of your resignation you are
required to give
a period of four weeks notice and accordingly your
last day of employment will be 19 March 2007 and not 31 March 2007 as
stated
in your resignation letter…”
On 19th
March 2007, du Plessis addressed an email to the applicant and
apparently in response to the above letter and stated:
“… Hi Oupa
I refer to our earlier conversation today and earlier
correspondence and various conversations the past month.
I wish to report that despite my last correspondence
with you, in which I tendered my services till 31 March 2007, you
maintained
you’re your position that my last working day will be 19
March 2007.
This clear instruction is therefore regarded as
termination of my services effective today.
Based on your instructions I handed my office keys to
Bobby Frisby.
I will return all company property i.e laptop and
telephone by 20 March as discussed…”
In the case of Mills, the resignation letter reads as
follows:
“…Dear Dr. Monamodi
RESIGNATION: CRAIG MILLS
The above matter and numerous discussions between
ourselves refer.
I hereby tender my resignation as from 1 March 2007.
My last working day will be 31 March 2007…”
Conclusion
In my view, both Mills and du Plessis expressed their
intention to terminate their employment relationship with the
applicant
which resignation was accepted. In the circumstances the
CCMA would not have had jurisdiction to entertain the dispute due to
lack of jurisdiction in that the employees failed to prove that
there was a dismissal.
The misinterpretation of clause 24 of the employment
contract by the applicant, (if at all) did not affect the binding
effect
that the acceptance of the resignation by both Mills and du
Plessis.
It is therefore my view that the Commissioner in
arriving at the conclusion as he did misconceived the task which was
before him
and thereby committed a gross irregularity. The
Commissioner exceeded his powers in that he entertained an unfair
dismissal dispute
when there was no prove of dismissal.
In the premises the Commissioner’s award stands to be
reviewed. The circumstances of this matter do not favour the
awarding
of costs.
In the premises I make the following order:
The arbitration award issued by the first respondent
is reviewed and set aside.
The award of the first respondent is substituted with
the following award:
“(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.”
There is no order as to costs.
_______________
Molahlehi
J
Date of Hearing : 31st
July 2008
Date of Judgment : 15th
January 2009
Appearances
For the Applicant : Mr Sandile July of Werksmans
Attorneys
For the Respondent: Advocate J N W Botha
Instructed by : MD Swanepoel Attorneys
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