Does a Full and Final Settlement oust the CCMA’s jurisdiction?
Where the employee has signed a mutual separation or settlement agreement, many employers have successfully raised a point that the CCMA lacks jurisdiction to entertain an alleged dismissal dispute.

 

The CCMA is an administrative tribunal created by statute with limited powers specified in the LRA. The CCMA has no jurisdiction to enquire into matters of a contractual or delictual nature unless expressly provided for in the LRA. The CCMA lacks jurisdiction to enquire into the validity of contracts or set aside a contract on any grounds.

 

However, in a recent matter of Shroeder and another v Pharmcare Ltd, the Labour Court found that a settlement is not a preliminary point which would oust the CCMA’s jurisdiction. In other words, the CCMA is not precluded from considering a settlement agreement when determining whether or not a dismissal exists.

 

This decision supports the view that the Commissioner is empowered to determine the validity of a settlement agreement in the course of an enquiry.
In the light of this decision, it remains to be seen whether the CCMA Commissioner will deal with this point as a preliminary point, special plea or point going to the merits of the matter.

 

Commissioners tend to have different approaches regarding these settlement agreements. Once it has been determined that the employee’s employment has been terminated by mutual consent, there will not be a dismissal.

 

This enquiry will entale the following:

(1) Was the agreement signed out of free will without force;
(2) Did the employee understand what he was signing;
(3) If necessary, was the contents of the agreement interpreted to the employee;
(4) Was there witnesses present who can confirm to the above.

 

Employers should therefor be careful to adhere to the requirements of a settlement agreement when entering into one. If there is an ex gratia amount payable in the settlement, the ex gratia amount should not include statutory moneys owed to the employee because the employer might end up or ordered to pay the employee his statutory monies again.

 

Article by: Jacques du Toit

CEO Dispute Resolution Official – Bethlehem