Home Forums Labour Law Debate CAN A RESIGNATION EXPIRE?

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    Ivan Israelstam

    A managerial employee, named A tells his employer that he is resigning because he is emigrating in two months’ time. Less than one month later the employer hires a replacement named B. A participates fully in the process of handing over his function to B. A week before A’s notice period ends Covid strikes and A is therefore not able to emigrate at the scheduled date.
    The employer allows A to continue working past the end of his notice period, providing him with odd jobs to tide him over, naively giving him a grace period in the hope that the ban on migration will be lifted soon. The employer neither enters into a revised employment contract with A nor enters into a contract with him limiting the grace period.
    One year later A informs the employer that he has decided not to emigrate. The employer keeps A in employment. A further 4 months later the employer decides that the odd jobs that A is doing do not justify his remuneration and wish to retrench him. Does the employer have the right to do so?

    Michael Bagraim

    In essence managerial employee A has been there longer than employee B. Due to LIFO the employee will have to “bump” employee B and keep employee A.

    Ingrid Lewin

    I agree with Michael with the following addition. The critical fact is that the notice period had not expired and therefore the contract of employment had not yet terminated when A’s duties were changed to that of “odd jobs”(see Mthimkhulu v Standard Bank of South Africa [2021] 1 BLLR 86 (LC) which held that the contract of employment in a resignation situation terminates when the notice period expires). Therefore, unless (as Ivan points out) there is another fair reason for retrenching A instead of B, LIFO must apply.

    However, I think (but am not totally sure about this) the position might be different if the notice period had expired AND THEN the employer agreed to keep A on with a change in job requirements. Surely B could argue that A was re-employed in terms of a new, albeit tacit or verbal contract, and because A’s (and not B’s) new position had become redundant, A’s position could be terminated for operational requirements as he would have been employed in terms of a new contract and would therefore be considered to be LAST IN.

    Patrick Deale

    Yes – the resignation did “expire”. The employer waived the right to terminate A’s employment during the notice period.

    They both impliedly agreed to continue the employment relationship with no fixed term – so indefinite employment resumed. The only difference in the continuation was A’s changed “odd job” role instead of his previous management role. This was effectively a demotion by mutual agreement.

    As a permanent employee, A enjoyed the full protection of labour laws. This included the right to a fair retrenchment procedure.

    I disagree with the view that LIFO was justified to bump B out of his job simply because A had longer service. A had impliedly waived his right to the managerial job and had accepted his demotion. It would be unfair to revive A’s right to his old managerial job at B’s expense.

    The employer would not have hired B to replace A when he resigned. A made a choice – and he should be bound by it. He can’t expect the employer to hire B and then retrench him because A’s plan to emigrate did not go as planned.

    Michael Bagraim

    I would tend to agree with Patrick in his assessment.

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