Claiming damages for resignation

[Greig Whitton]

A common complaint voiced by local business owners is that they can be penalised for firing employees but have no recourse should an employee resign prematurely. I thought TFSA users might be interested to learn of a recent Supreme Court of Appeal case where the Air Traffic and Navigation Services Company successfully sued a former employee for ~R500K due to premature resignation and breach of employment contract. The key was proper contract structuring.

[Citizen X]

A common complaint voiced by local business owners is that they can be penalised for firing employees but have no recourse should an employee resign prematurely. I thought TFSA users might be interested to learn of a recent Supreme Court of Appeal case where the Air Traffic and Navigation Services Company successfully sued a former employee for ~R500K due to premature resignation and breach of employment contract. The key was proper contract structuring.

Hi Greig,

Not actually a new concept in our law at all! The employer/employee relationship is governed by both legislation and our Common Law. It's our common law that gives either party the employee or the employer to sue for breach of contract[damages].

[Greig Whitton]

Thanks for commenting, Vanash! You're correct: not a new concept at all. However, the success of the employer in this case and magnitude of the damages award caught my eye. Many business owners believe that it is impossible to enforce a breach of employment contract or be compensated for damages. This judgement clearly proves otherwise.

[Justloadit]

The problem in most cases would be that the employee would not be able to afford the damages claimed.

[sterne.law@gmail.com]

The case in point was a fixed term contract hence the size of the award. Further, it was contractual and not a BCEA issue. Hence he could use the high court and not labour forums.
Ordinarily the damages would be the notice period shortfall.
It is possible to get in excess thereof if the resignation causes harm.
An employer can interdiction an employee from leaving before the notice period required ends.

[Dave A]

not a new concept at all. However, the success of the employer in this case and magnitude of the damages award caught my eye.

It is impressive. And thanks for sharing it.

The problem ordinarily is the wisdom of pursuing the matter against the employee.

Normally the cost vs return doesn't work out, and there are few things more dangerous in an organisation than a disgruntled employee forced to work for an employer against their will.

[reuphk]

For interest, in both Lesotho and Botswana, if an employee does not give notice, they have to pay the employer 1 months' salary in lieu of notice. And yes, they actually do.

[Houses4Rent]

Sounds brilliant. But possession is nine tenth of the battle. So if they walk out and do not pay that 1m? Will the employer hire legal eagles costing more than that 1m to get their money?

[Basment Dweller]

possession is nine tenth of the battle.

^This

Good luck chasing people with lawyers trying to get money. It's better to just cut your losses and put your energy into making money somewhere else. And that is the view both the employer and the employee should take. I think some people get caught up in teaching others lessons through legal battles just to pacify their own hurt egos.

[reuphk]

The point is, they pay. The Labour dept in Lesotho assist if they don't, not sure about Botswana, and if you have to go to court, they also have to pay the fees.
This is a deterrent for people to just leave employment without notice which is the objective. I suppose we are just too South African in our thinking...