ISSUE

Whether parties may settle disputes between them which are pending in other forums (for example pending High Court litigation) at the same time as settling a dismissal dispute which is before the CCMA for arbitration in an “all in” settlement agreement.

SUMMARY

The CCMA does not have jurisdiction to make a settlement agreement an arbitration award unless that agreement relates to a matter which the parties have a right to refer to the CCMA for arbitration or to the Labour Court. However, if the parties do not ask for the agreement to be made an arbitration award (in terms of section 142A of the Labour Relations Act 66 of 1995 (as amended) (“the LRA”), then the agreement can cover any and all matters and disputes between the parties and can be final and binding.  They can therefore conclude one, all-in settlement agreement, thereby avoiding further litigation between them and incurring further unnecessary costs.

COURT’S DECISION

In Scholtz v CCMA and Others (C675/2014) [2015] ZALCCT 45 (25 June 2015) the Applicant, Scholtz, was dismissed by her employer (the Third Respondent). She referred an unfair dismissal dispute to the CCMA.

A related party, namely a Trust issued summons in the High Court for amounts allegedly due to the Trust by Scholtz as well as a vehicle which was previously provided to Scholtz to fulfil functions as an independent contractor to the Trust.

During the arbitration process, Scholtz and her employer reached a settlement agreement, in terms of which the CCMA dispute was settled as well as the pending High Court dispute between Scholtz and the Trust. Scholtz then applied to the Labour Court to have the settlement agreement reviewed and set aside on four grounds, one of which was that the CCMA did not have jurisdiction to settle the matter pending before the High Court.
Settlement of High Court litigation

The parties settled both the CCMA dispute and the High Court dispute as part of an “all‑in” settlement agreement. Scholtz argued that the CCMA did not have the jurisdiction to settle the High Court dispute and consequently asked for the Labour Court to set the agreement aside. Counsel for Scholtz argued that the CCMA does not have jurisdiction to make a settlement agreement an arbitration award or an order of the court. In terms of section 142A(2) of the LRA the CCMA may only make a settlement agreement an arbitration award if it settles a dispute which the party has a right to refer to arbitration or the Labour Court.

However, neither party had asked for the settlement agreement to be made an arbitration award or an order of court. Therefore, jurisdiction was not a ground upon which the agreement could be reviewed. The Labour Court held that:

“The parties, assisted by their legal representatives, reached an “all-in” settlement of all disputes between them, reduced it to writing, and signed it. That settled the disputes, including the dispute between Ms Scholtz and the Trust….

In my view, there was nothing to prevent the parties from settling all their disputes in one agreement. Indeed, it made sense to do so, thus avoiding further litigation and costs….The issue of the CCMA’s jurisdiction is to my mind not relevant to the fact that the parties reached an all-in settlement agreement.”^[1]

IMPORTANCE OF THIS CASE

A settlement agreement negotiated and ultimately concluded during CCMA proceedings may cover any disputes between the parties, including disputes not before the CCMA, for example pending claims for monies due and owing in another court(s).

Where parties conclude a settlement agreement with the assistance of their legal representatives a party wishing to thereafter have the agreement set aside will have to rely on the common law principles for doing so, for instance, proving that the agreement was concluded by mistake or under duress and/or undue influence. This is especially true where the party wishing to have the agreement set aside is not a layperson, took advice before signing the agreement, contemplated the agreement before signing it and was duly warned of its final and binding effect.

[1] Scholtz v CCMA and Others (C675/2014) [2015] ZALCCT 45 paragraphs 42 to 43

Written by Jacques van Wyk, Director, Michiel Heyns, Senior Associate and Brittany Feldman, Candidate Attorney, Werksmans Attorneys