A mutual separation agreement is an agreement between both the employer and the worker, with the parties agreeing to terminate the employment relationship reciprocally on the basis of an agreed amount of compensation if both parties subsequently lose their right to other rights in bargaining forums or courts. The employer and the worker may agree to enter into a mutual separation agreement to terminate the employment relationship. And the best part is that a mutual separation agreement is not considered a dismissal within the meaning of the Employment Relations Act and is a widely accepted practice by the CCMA and the Labour Court. When concluding a mutual cancellation agreement, employers should respect certain general principles in order to avoid any future impact. The agreement should be in writing. It should be clear that it fully and definitively fulfils all the obligations incumbent on the two parties concerned. It should also be signed and attested by both parties. The agreement should be explained to the employee. The employer`s failure to explain to the worker the content of an agreement terminating the employment relationship by mutual agreement shall result in the nullity of the agreement. When examining recent case law, the article deals with the legality and enforceability of a worker`s waiver of recourse (right of access to justice) against his employer following the conclusion of a mutual cancellation agreement.
One of our youngest clients was lucky in this regard. Our Mandanin was a worker who was under considerable pressure from the employer to terminate her employment relationship through a mutual separation agreement. She was a dedicated employee and had no disciplinary proceedings pending or prior to her. However, the employer wanted their employment relationship to be over and fortunately, our mandandan recognized all the signs before it was too late. She advised us and we intervened immediately and we made sure that all her rights were protected under the law. We negotiated with the employer different terms of the reciprocity agreement before both parties agreed. The agreement was reached and our Mandanin received a significantly higher severance pay than the initial offer. To illustrate this, an employee may be suspected of gross misconduct. Accordingly, an employer would have the right to convene an investigation to determine the alleged facts and if convicted, he can impose a penalty of dismissal. However, prior to such a procedure, any party could propose to conclude a mutual cessation agreement. In practice, compensation is usually paid under the terms of the reciprocal cancellation contract. In addition, a worker would waive his right to other remedies (right of access to justice) against his employer.
In this context, a reciprocal cancellation agreement provides for the termination of any other conflict. In a case recently decided by the Labour Appeal Court [ABSA Investment Management Services (Pty) Ltd vs Crowhurst 2006, 2 BLLR 107], Ms Crowhurst went to the Labour Court and sought unfair reductions. ABSA lost the case and claimed on appeal that the worker`s employment relationship had ended by mutual agreement, which the worker refused.