The employer and employee enter into a Full and Final Settlement agreement to mutually and amicably terminate the employment relationship between them, but a few days later the employer receives a referral or even a Notice of Set down from the CCMA or the Bargaining Council indicating that the employee was unfairly dismissed.
Does the CCMA or Bargaining Council have the jurisdiction to entertain an unfair dismissal dispute when the parties have already entered into a Full and Final settlement agreement?
In terms of Section 192(1) of the Labour Relations Act, the onus rests on the Applicant party to prove the existence of a dismissal.
In Builders Warehouse (Pty) Ltd v CCMA and Others  ZALAC 13, the parties signed an agreement on demotion as an alternative to dismissal due to the employee’s incapacity based ill health. The employee subsequently referred an unfair labour practice to the CCMA, challenging the demotion. The Commissioner ruled that the CCMA lacked jurisdiction because of the existence of the agreement. The court held that the Commissioner correctly appreciated that she did not have any power to set aside the contract but erred in concluding that the agreement between the parties meant that the CCMA did not have jurisdiction to hear the dispute. The ambit of the unfair labour practice was wider, and the implementation of the agreement could have constituted an unfair labour practice.
In the matter of Cook4Life CC v CCMA and others (2013) 34 ILJ 2018 (LC) at 14, the court held that the refusal by Commissioners to enter into any consideration of the validity of an agreement confuses the concepts of jurisdiction and power.
The CCMA has jurisdiction to determine unfair dismissal disputes, and it is specifically enjoined, in terms of section 115(1)(b) of the LRA, to arbitrate disputes referred to it after a failed conciliation.
Section 191 contemplates that the CCMA must make a ruling when the existence of a dismissal is placed in issue, by determining whether or not an employee referring an unfair dismissal claim was dismissed within the meaning accorded to that term by section 186(1) of the Act.
The court also held that when it is contended that an agreement is voidable on account of it having been induced by duress, the CCMA is not empowered to make that determination in the exercise of its jurisdiction to determine the existence or otherwise of a dismissal. However, importantly, the court held that requiring an applicant to refer a contractual dispute to the Labour Court as a precondition to arbitration on an unfair dismissal claim, would defeat the statutory purpose of informal and expeditious dispute resolution and would import a requirement that finds no reflection in the Act.
In light of the above-mentioned case law, it is clear that the CCMA or Bargaining Councils will have the jurisdiction to determine whether a dismissal occurred, and in order to determine the dismissal, the full and final settlement agreement would have to be interpreted. The Applicant would be required to present a compelling case to show that he/she was in fact, dismissed.
However, the CCMA and Bargaining Councils lack the jurisdiction to determine the validity of the agreement. Further, an argument regarding who bears the onus to prove that the agreement was indeed voluntarily signed by the Applicant, cannot be determined by the CCMA or Bargaining Councils.
It is thus for the Applicant to decide whether he/she would want to approach the Labour Court to determine the validity of the Full and Final Settlement Agreement.
Article by:Arlene Jacobs
Dispute Resolution Official – Bloemfontein