Greef v Consol Glass (Pty) Ltd CA (LAC) (unreported case no 02/12, 21-5-2013) Coppin AJA (Waglay JP and Tlaletsi JA concurring).

By Moksha Naidoo

Can an employee who is dismissed and subsequently enters into a settlement agreement with his or her employer, prior to referring his or her dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) or Labour Court (LC), seek recourse in terms of s 158(1)(c) of the Labour Relations Act (LRA) 66 of 1995?

Section 158(1)(c) gives the LC the authority to make an arbitration award or settlement agreement an order of court and reads: ‘The Labour Court may make any arbitration award or any settlement agreement an order of the court’.

Relevant to this matter is s 158(1A) which reads: ‘For the purposes of subsection (1)(c), a settlement agreement is a written agreement in settlement of a dispute that a party has the right to refer to arbitration or to the Labour Court, excluding a dispute that a party is only entitled to refer to arbitration in terms of section 22(4), 74(4) or 75(7)’.

In answering the above question, the LC held that, in the absence of a dispute being referred to the court for adjudication, it could not exercise its discretion in making the agreement an order of court. Put differently, the court took the view that s 158(1)(c) is applicable only to settlement agreements that were concluded after an initial dispute has been referred either to the CCMA or to the Labour Court and hence it was not open for an employee to rely on this section if the settlement agreement in question was concluded at an earlier stage.

Background

The appellant (the employee) and the respondent (the employer) entered into a voluntary retrenchment agreement. A term of the agreement was that, if the employee’s ‘hand over’ to another employee had been done, she was not required to work her notice period. After signing the agreement, her manager informed her that she was not required to work during her notice period. A few weeks later she received a letter from her employer advising her that her indication to start a new job during her notice period was taken as a resignation, in which case the agreement entered into was cancelled. The employee disputed that she resigned and maintained she was advised not to work during her notice period and hence was not in breach of the agreement.

Intending to make the settlement agreement an order of court, the employee sought recourse in terms of s 158(1)(c). As mentioned Steenkamp J, in Greeff v Consol Glass (Pty) Ltd (2012) 33 ILJ 1167 (LC) dismissed the employee’s application on the grounds that the settlement agreement was entered into before any dispute had been referred for adjudication.

On appeal to the Labour Appeal Court (LAC), the employee argued that the court a quo erred in having found that s 158(1)(c) only envisaged settlement agreements that were concluded after a dispute had been referred to the CCMA or Labour Court.

The LAC began by finding the narrow approach adopted by the court a quo failed to take into account s 158(1A), which sets out the criteria for a settlement agreement being made an order under s 158(1)(c).

Coppin AJA held the following on this point: ‘It is thus clear from a reading of s 158(1A) that s 158(1)(c) must be read with and subject to s 158(1A). Even though s 158(1)(c) refers to “any settlement agreement” this cannot be taken to mean, literally, “any” settlement agreement. Section 158(1A) describes what settlement agreements are being referred to in s 158(1)(c).

So properly interpreted, in terms of s 158(1)(c), read with s 158(1A), the Labour Court may make any arbitration award an order of court and may only make settlement agreements, which comply with the criteria stated in s 158(1A), orders of court. A settlement agreement that may be made an order of court by the Labour Court  in terms of s 158(1)(c), must (i) be in writing; (ii) be in settlement of a dispute (ie, it must have as its genesis a dispute); (iii) the dispute must be one that the party has a right to refer to arbitration, or to the Labour Court for adjudication, in terms of the LRA; and (iv) the dispute must not be of the kind that a party is only entitled to refer to arbitration in terms of s 22(4), or s 74(4) or s 75(7). Those kinds of dispute are excluded.’

Therefore, should a settlement agreement not comply to the above criteria, the LC cannot make it an order of court; however, if all the criteria are met then the court has a discretion, taking into account all relevant factors, of whether or not to make the agreement an order of court.

With reference to the third criterion, that is, the dispute must be one that the party has a right to refer to arbitration or to the LC, the LAC held that an interpretation of the term ‘a right to refer’, which only refers or relates to agreements concluded after an initial dispute has been referred to the CCMA or LC, will be contrary to the objectives of the LRA, which is speedy and cost-effective dispute resolution.

On this point the LAC held: ‘Giving a strict meaning to the word “right” in s 158(1A) would have the effect of differentiating between those settlements concluded before and those concluded after the statutory events pertaining to conciliation had occurred. Other than purporting to limit the potential number of applications to make settlements orders of court, there appears to be no rational basis for such differentiation. Moreover, any retardation, or discouragement of the early settlement of disputes is not consistent with the objects of the LRA, namely, the resolution of disputes as speedily as possible, in an efficient and cost effective manner. Lingering, unsettled disputes are not conducive to stability in the workplace and militate against the principle aims of the LRA in that respect.’

The LAC held that the LC ought to have found the agreement in casu met the criteria required for the application of s 158(1)(c) and therefore it should have considered all relevant factors in deciding whether or not to exercise its discretion in making the agreement an order of court or not. In exercising its discretion the court had to have dealt with the factual dispute, that being whether there was a repudiation of the agreement and, if so, whether the agreement was lawfully cancelled or not. This according to the LAC may require oral evidence, which the LC, in a hearing afresh, could do.

The appeal was upheld and remitted to the LC.

Note: Unreported cases at date of publication may have subsequently been reported.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

These articles were first published in De Rebus in 2013 (Aug) DR 59.