CCMA jurisdiction for mutual termination agreements

20 Mar 2023

Mutual termination agreements 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 a mutual termination agreement. The short answer is… it depends on the circumstances of the case.

If the mutual termination agreement is genuinely the result of a mutual agreement 

If the mutual termination agreement 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 agreement. In this situation, the mutual termination agreement 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 termination 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 CCMA has jurisdiction to determine the validity of mutual termination agreements. In this case, the Labour Court stated:

“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 mutual termination agreement

Where an employee claims that the mutual termination agreement that he/she entered into is invalid (due to duress or misrepresentation), the CCMA should determine whether the agreement is valid. If it determines that the 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 termination 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 more. This is done by proving one or more of the following elements:

• Coercion
• Undue influence
• Misrepresentation
• Fraud
• Mistake
• Lack of legal capacity

Conclusion

While mutual termination agreements 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 a mutual termination agreement 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 SchoemanLaw to assist in your legal needs?

Contact an attorney at SchoemanLaw for your legal needs by visiting our website at www.schoemanlaw.co.za.

See also:

• Withdrawal of an offer of employment – Is that a dismissal?
• Quantifying compensation for unfair dismissal
• The CCMA – How does it work?
• How to dismiss an employee

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)