Mutual termination agreements (MTAs) are legal agreements between an employer and an employee that end the employment relationship on agreed terms.
In South Africa, the Commission for Conciliation, Mediation, and Arbitration (CCMA) is a statutory body responsible for resolving disputes arising from employment relationships.
The question at hand is whether you can still approach the CCMA after entering into an MTA. The short answer is…it depends on the circumstances of the case.
If the MTA is genuinely the result of a mutual agreement
If the MTA is genuinely the result of a mutual agreement between the parties, and there is no indication of coercion or duress, then the CCMA does not have jurisdiction to hear any dispute that arises from the MTA. In this situation, the MTA represents a private agreement between the parties, and the CCMA has no role in its enforcement or interpretation.
In Schroeder and another v Pharmacare Ltd t/a Aspen Pharmacare (2015) the Applicants and their employer had terminated the employment relationship by concluding mutual separation agreements. Notwithstanding concluding the agreements, both Applicants subsequently referred an unfair dismissal claim against Aspen to the bargaining council. The presiding arbitrators held that the council lacked jurisdiction to entertain the disputes because of the existence of the agreements. The arbitrators accordingly held that the individual employees were not ‘dismissed’ but that their employment ended by mutual agreement.
In Cook4Life CC v Commission for Conciliation, Mediation and Arbitration & others (2013), the Labour Court considered whether the Commission for Conciliation, Mediation and Arbitration (CCMA) has jurisdiction to determine the validity of mutual separation agreements. In this case, the Labour Court said:
“Section 191 [of the Labour Relations Act (LRA)] 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 [LRA].”
If there are any questions regarding the validity of the MTA
Where an employee claims that the mutual separation agreement that he/she has entered into is invalid (due to duress or misrepresentation), the CCMA should determine whether the mutual separation agreement is valid. If it determines that the mutual separation agreement is invalid, the agreement should be set aside, and the CCMA should proceed to determine whether there was an unfair dismissal. The CCMA’s jurisdiction is not automatically ousted by virtue of the parties having concluded a mutual separation agreement.
In Kgwedi v Bidvest Protea Coin LTD (2019), the court held that agreements are binding unless the party wishing to escape the contract can show that the agreement was void ab initio, unlawful or contra bonos mores, this is done by proving one or more of the following elements:
- Coercion
- Undue influence
- Misrepresentation
- Fraud
- Mistake
- Lack of legal capacity
Conclusion:
Therefore, while MTAs can, in some circumstances, fall outside the jurisdiction of the CCMA, each case will depend on its specific facts and circumstances. If there is any doubt about the validity of an MTA or a dispute arises over its implementation, it is advisable to seek legal advice to determine whether the CCMA has jurisdiction to hear the dispute.
So, if you find yourself in this position, why not contact an attorney at Schoeman Law to assist in your legal needs?
Contact an attorney at SchoemanLaw for your legal needs by visiting our website at www.schoemanlaw.co.za.
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