In the complex landscape of South African labour law, jurisdiction holds a pivotal role in determining the validity and enforceability of settlement agreements. Understanding the boundaries of jurisdiction is paramount for employers. In this article, we delve into the crucial role of jurisdiction in settlement agreements, exploring its implications and offering insights to safeguard the enforceability of these agreements.

To unravel the significance of jurisdiction in agreements, it’s vital to grasp that specific matters fall within the purview of distinct bodies or tribunals, such as the CCMA and Bargaining Councils. In contrast, others remain under the jurisdiction of the Labour Courts. The determination of jurisdiction can profoundly impact the resolution of disputes and the enforceability of contractual terms.

The CCMA is a prominent administrative tribunal established by statute, operating under the aegis of the Labour Relations Act. While the CCMA is crucial in mediating and arbitrating various employment disputes, its powers are not boundless. The CCMA lacks jurisdiction to inquire into contractual or delictual matters unless expressly provided for in the Labour Relations Act, a scenario that is seldom encountered.

In most cases involving full and final settlement agreements or mutual termination agreements, employers should note that the CCMA and Bargaining Council do not have the necessary jurisdiction to adjudicate disputes where matters are, essentially, res judicata or already settled. Employees may find themselves with limited avenues to contest the enforceability of such agreements. Typically, employees have two primary defences when alleging unfair dismissal, and where the CCMA and Bargaining Councils may determine jurisdiction:

Voluntary Consent: Employees may argue that they signed contractual documents without a complete understanding or awareness of their contents. However, this defence often falters when parties have knowingly and willingly executed the agreement, as is the default assumption in contract law. The Latin maxim “caveat subscribtor,” meaning “let the signer beware,” underscores this presumption.

Duress: Duress represents another potential defence, necessitating the demonstration of a credible threat of substantial harm, inducing a reasonable fear of imminent or inevitable damage. Proving duress presents a formidable challenge.

Several court decisions offer valuable insights into the principles surrounding duress and contractual disputes. In Experian South Africa (Pty) Ltd v Haynes and Another, the court affirmed that contracts executed under duress could be set aside. However, this necessitates substantiating the existence of a credible threat of significant harm. Similarly, in Gbenga-Olawatoye v Rekkitt Benckiser SA & Another, the court underscored that duress must involve actual violence or a reasonable fear thereof. Furthermore, the court recognised the significance of upholding settlement agreements, particularly when they benefit the party seeking to evade the consequences of their actions. It is also vital to distinguish between hard bargaining and duress in the realm of contractual negotiations. While an imbalance of bargaining power or robust negotiations may induce discomfort, they do not equate to duress.

Comprehending the intricacies of jurisdiction is paramount in the sphere of agreements. Employers must be cognisant of the confines of entities such as the CCMA and the ramifications of jurisdiction on the resolution of disputes. Employers should strive to cultivate transparent and equitable contractual environments where agreements are entered into voluntarily. By doing so, they can mitigate the risk of duress claims and foster employment relationships grounded in trust and willing consent. In the realm of employment law, jurisdiction plays a central role in shaping the outcomes of disputes and ensuring the enforceability of contractual provisions.

Nontsikelelo Zulu | Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)