Litigation is a drastic, often unsatisfactory vehicle to resolve disputes. The very nature of court adjudication means that the dispute will produce a winner and a loser. However, as any two parties who relied on a third party to resolve their differences can probably testify, an adjudicated outcome may also mean that both parties end up feeling like losers - one may just have lost more than the other. It was probably for this reason that Abraham Lincoln advised -
"Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough."
The vagaries of litigation ring especially true to parties involved in special relationships. Litigating against family is a sure-fire way of destroying the bands that otherwise tie relatives together. The same can be said for the employment relationship, which equally reacts badly to litigation, generally speaking. The trust inherent in this relationship is often damaged where adjudication results in winners and losers.
Avoiding court-imposed findings is inherent in the structure of the Labour Relations Act, 66 of 1995 (LRA). The LRA encourages party-centred resolution of disputes, creating a framework for consultation and negotiation between employers and employees or trade unions. Even where parties are unable to agree on a way forward (and declare a dispute at the employment tribunal), the LRA prescribes conciliation as a first intervention prior to determining the outcome through arbitration. The Commission for Conciliation, Mediation and Arbitration maintains a high rate of success in settling disputes through conciliation, with more than two out of three cases referred becoming settled before adjudication. This phenomenon is arguably indicative of the skill and expertise of the commissioners conciliating the disputes and the appreciation of parties of the value of determining the outcome themselves, rather than leaving it to an arbitrator.
But how does resolving issues by agreement affect the rights of the parties to the contract? The same LRA that creates the outline for consensus-seeking also captures various fundamental employee rights. Hard-fought protection against unfair dismissal or unfair labour practices is entrenched in the LRA with the Act providing a statutory mechanism for enforcing these rights. Can an employee waive statutory rights (to challenge fairness of employer conduct) when settling a dispute with the employer? The Constitutional Court had opportunity to consider this and other questions recently.
In Gbenga-Oluwatoye v Reckitt Benkiser South Africa (Pty) Ltd and Another  ZACC 33 the Constitutional Court had to determine whether a settlement agreement reached with a dismissed employee should be set aside. The employee was dismissed after being found to have made misrepresentations about his erstwhile employment. The employer and employee then entered into a settlement agreement whereby they compromised claims against each other. The employee then brought an urgent application to the Labour Court to set aside the agreement. He claimed that he entered the agreement under duress, that he has a common law right to a pre-dismissal hearing and that the agreement violates his constitutional right to access to the courts and fair labour practices. The Labour and Labour Appeal Courts dismissed his applications. The Constitutional Court noted that he appeared to have abandoned his claim of duress. It then held that the settlement agreement was indeed enforceable, obviating the need to consider the issue of the common law right to a pre-dismissal hearing.
The Constitutional Court was blunt about the employee's conduct. It held that, having confessed that he had no defence to the misrepresentation, the employee entered into an agreement to put the then present issue to bed. "He did so knowingly, with his eyes open to his future interests." The Court also stated that "[t]the public, and indeed our courts, have a powerful interest in enforcing agreements of this sort. … When parties settle an existing dispute in full and final settlement, none should be lightly released from an undertaking seriously and willingly embraced. This is particularly so if the agreement was, as here, for the benefit of a party seeking to escape consequences of his own conduct."
The judgment reinforces the value of settling disputes. Employers and employees desirous to reach finality in a matter should not be deterred from doing so based on fears that the other party may have later suffer from buyer's remorse or otherwise seek to resile from the agreement. A negotiated outcome allows parties to arrive at an outcome where both may win (or, at least, neither loses).
This article first appeared in the Star Workplace on 21 September 2016.