Patrick Bracher | Partner | Norton Rose Fulbright South Africa | mail me |
A February 2023 Labour Appeal Court judgment interpreted a settlement agreement that agreed to the “full and final settlement of all matters between” the parties and “in full and final settlement of all and any claims which the parties may have against each other”.
Wheelwright v CP de Leeuw Johannesburg (Pty) Ltd Labour Appeal Court of South Africa, Johannesburg case no JA81/2022
The employer and employee were parties to an employment agreement that included a restraint of trade agreement. When the employment dispute between them was taken to the CCMA for resolution, the employer and employee entered into the settlement agreement including those terms. The court held that the fact that the settlement arose from the CCMA dispute did allow the employer to continue its claim under the restraint of trade agreement because all matters were settled.
Regarding the argument that the restraint of trade agreement could still be enforced, the court quoted a previous similar case where it was said that “this interpretation does not make sense” because there would be “no need to refer to anything else but the matter before the CCMA”.
Manifestly, the clause in question extended beyond the specific referral to the CCMA expressly covered by a standard clause in the usual CCMA settlement agreement. The settlement agreement referred to claims “based on delict, operation of law, equity, fairness or otherwise”. None of these causes of action could have been referred to the CCMA.
The employer, legally represented, was aware of the existence of the dispute under the restraint agreement and could have carved out an exclusion so that the restraint of trade dispute continued to be relevant.
In the circumstances the court held that “all and any claims which the parties may have” extended beyond the contractual relationship between the parties and the former employer’s interpretation was not correct.
