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Factors to consider when an employee resigns
Ivan
Israelstam
The
employment of an employee can be terminated by the death of the employee, by his
or her retirement, by dismissal, by mutual agreement or at the instance of the
employee.
Normally, if the employee terminates the employment he or she does so by
retiring or resigning and giving advance notice in writing.
The amount of notice that the employee is supposed to give depends on a number
of factors.
Firstly, if there is no contract between the employee and employer providing for
a notice period, then the notice period as provided for by labour legislation
must be applied.
The Basic Conditions of Employment Act (BCEA) provides that employers and
employees covered by the BCEA must give, in writing:
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A week's notice if the
employee has up to six months' service.
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Two weeks' notice if the
employee has between six months' and 12 months' service.
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Four weeks' notice if
the employee has 12 months' service or more.
Secondly, an
employment contract can provide for periods of notice longer than those
prescribed by legislation as long as the employee is not required to give more
notice than the employer is required to give.
Sometimes the employee just leaves without giving notice or works only a portion
of the notice.
This can cause operational problems for the employer who then does not have
sufficient opportunity to make alternative arrangements to get the work done.
In some cases where the employee fails to work the required notice, the employer
is only too pleased to accept this.
But, if the employer fails to object to the absence or shortness of the notice
period being worked, the employer is required to pay the employee out in lieu of
the unworked portion of the notice!
A bigger problem arises for the employer where the employer fails to work-in his
or her notice in a situation where the employer needs the employee's services
for the full notice period.
This need could exist because:
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The employer needs the
employee to complete a handover of his duties.
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There is a lot of work
that still needs to be done.
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Certain tasks can only
be done by the employee.
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It will take time to
find a suitable replacement.
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Clients need to be given
advance warning of the employee's departure because of a special working
relationship between the employee and the client.
What can
employers do if employees leave without working the required notice?
Firstly, the employer can apply to a court to issue an urgent order of specific
performance. This is an order requiring the employee to work-in the required
notice.
Secondly, the employer could apply to court for damages caused by the employee's
failure to work the notice.
However, should the employer sue for damages, it would have to be able to
quantify and prove specific losses attached to the employee's breach of the
notice agreement.
For example, if the employer could show that it lost an order worth R1 million
because of the employee's premature departure, the damages claimed from the
employee would be R1 million.
In the case of SAMRO Ltd v Mphatsoe (2009, CLL Vol 18 No 9 page 82), the
employee failed to work the notice that the employer believed he was
contractually required to work.
The employer therefore sued Mphatsoe for damages equivalent to the earnings that
employee would have been paid for the period of the unworked notice.
The court decided that this basis for arriving at the damages amount was legally
incorrect. It said that a suit for damages could only be satisfied by the amount
of loss actually suffered by the plaintiff.
However, as the employer was unable to show that it had suffered any specific
loss, the court was unable to award any damages.
The court commented that if the employee breached the notice agreement, the
actual damages caused could be zero or could be a lot more than the amount of
the employee's earnings.
The court also decided that a clause in the agreement providing for a "calendar
month's notice" would not always mean that notice must be given on the first of
the month to the end of the month.
The outcome of this case makes it clear that:
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It is difficult for
employers to force employees to work-in their agreed or statutory notice.
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Should the employer
claim damages it must clearly identify and quantify the losses suffered.
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Where the employer wants
notice to be given on the first day of the month, the employment contract
should specifically provide for this instead of merely requiring a calendar
month's notice.
Ivan Israelstam is chief
executive of Labour Law Management Consulting. He can be contacted at 011 888
7944 or
labourlaw@absamail.co.za
Our
appreciation to Ivan and The Star newspaper for permission to publish this
article.
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