The parties attended the Conciliation proceeding and resolved the matter by entering into a settlement agreement. The settlement agreement will be binding on both parties and is the full and final settlement of the dispute between the parties. This would be the end of the matter, and the applicant (employee) will have no further recourse against the respondent (employer) regarding the dispute that was resolved.
When attempting to resolve a matter by way of settlement, the parties should take cognisance that there are a few different ways in which a dispute may be settled. A dispute may be settled by compensation, reinstatement, re-employment, and any other terms that the parties agree to. For the purpose of this article, the focus will be on the following three methods:
- compensation,
- reinstatement, and
- re-employment.
When the parties agree to compensation, they agree that a specified amount of money will be paid to the applicant on a specified date.
When the parties agree to reinstatement of the applicant, the parties will agree to a specified date that the applicant will commence his/her employment with the respondent. The effect of reinstatement for the applicant entails that he/she will commence their employment with the respondent as if the applicant’s services were never terminated, and he/she will be reinstated with all his/her benefits and terms of conditions of employment as it were before the termination.
However, when the parties agree to re-employment, the applicant will commence employment with the respondent as if he/she is a new employee. The applicant will not necessarily be appointed on the same terms and conditions as prior to the termination.
The parties, therefore, need to keep the above options in mind when deciding on how they want to settle a dispute.
As with other settlement agreements, the settlement agreement stipulates the date and obligations that a party to the settlement must comply with. Both parties enter into such an agreement wilfully, and there is an underlying principle that settlement agreements are meant to be complied with.
The question now arises, what happens when the employer does not comply with the settlement agreement.
Non-compliance with the terms of a settlement agreement can be dealt with by an application to have the settlement agreement made an arbitration award. Thereafter the arbitration award can be enforced as if it is an order of the Labour Court in respect of which a writ of execution has been issued.
However, this will not apply to settlement agreements relating to interest disputes and those concerning essential or maintenance services. The arbitration award may then be certified and enforced. The applicant who wishes to enforce the award may request the sheriff to execute if the initial settlement agreement (now arbitration award) was for the payment of money. Alternatively, in the case of an arbitration award for the performance of an act, other than for the payment of money, the applicant will be required to institute contempt of court proceedings in the Labour Court.
Once the parties have concluded a settlement agreement, it is essential that the parties honour the settlement agreement, failing which they may face further consequences that unnecessarily prolong the matter and may give rise to further cost implications.
Article by: Porthri Blauw
Dispute Resolution Official – George