In April 2018, our Head of the Department of Labour and Property made a note titled “Mahamo v Nedbank Lesotho Limited LAC/CIV/04/11A case on Severance Pay in Lesotho.” The note simply made employers aware that an employee can be entitled to severance pay despite committing a dismissible offence at the workplace.  The trick, as determined in Mahamo v Nedbank, is to resign prior to the hearing and in that way, an employee exercises his/her Constitutional right and in terms of Section 79 of the Labour Code, he/she is entitled to Severance pay as an employee was not fairly dismissed for misconduct in the circumstances.

The above has been a bitter pill to swallow for a number of employers not only in Lesotho but in South Africa also, the Labour Appeal Court of South Africa Johannesburg, came to a conclusion that all employers will apply with pleasure. By coincidence, a similar matter to that of Nedbank also related to another bank; in Standard Bank of South Africa Limited v Nombulelo Cynthia Chiloane (JA 85/18) [2020] an employee resigned with immediate effect upon receiving a notice to attend a disciplinary hearing. On the day of the hearing the employee attended and explained that the hearing cannot validly proceed as she was no longer an employee, the chairman dismissed the argument and proceeded with the hearing whilst the employee left the hearing. In that hearing it was concluded that the employee was guilty and therefore was dismissed.

The employee took the matter to the Labour Court arguing that her dismissal was ineffective as she had resigned and the Labour Court concurred with her, citing the fact that as soon as the employee resigns with immediate effect the employer has no right on her as the employment relationship immediately terminates.

On Appeal, the Court made an interesting analysis that stems from the law of contract. The Court held that, an employment contract with a notice period term maybe different from that which has no notice period. The notice term remains valid and binding and if one party ignores the notice period that action is simply repudiation which entitles the other innocent party to either accept or hold the other party to that term. The result is therefore that the resignation that does not comply with the notice requirements contained in the contract cannot validly terminate the contract and therefore during the notice period as contained in the contract or stipulated by statute, an employer can hold a disciplinary hearing and find the employee guilty and dismiss such an employee.

We await for a similar matter to find its way into our courts and see whether this case may be used to persuade the judges to equally change our jurisprudence, before then Employees are still entitled to their severance pay as long as they resigned timeously.

Prepared by: Department of Labour and Property, Sello Mafatle Attorneys