Definition: “A full and final Settlement Agreement is an Agreement that resolves a dispute between two parties.” (www.upcounsel.com, 2019)
Full and Final Settlement Agreement is an agreement which is normally created when an employee’s services are terminated with an employer based on conditions.
Settlement agreements should always:
“In Ulster v Standard Bank of SA Ltd (2013) 34 ILJ 2343 (LC), the employee after concluding a settlement agreement at the CCMA, approached the Labour Court for an order setting aside the settlement agreement on the basis that she had not entered into it willingly and was coerced by her union’s legal representative. The Labour Court confirmed that a party who wishes to have the settlement agreement set aside will need to prove, on a balance of probabilities and in terms of our common law of contract, the allegation of duress. In this case, the employee was a bank manager with 30 years of experience. In addition, before signing the agreement, the employee further confirmed to the commissioner that she understood and accepted the employer’s proposal. On these grounds the Labour Court found the employee to be bound by the agreement.” (own emphasis) (http://www.saflii.org/za/cases/ZALCCT/2013/3.html, 2019)
It is therefore advisable that the following clauses to form part of any Settlement Agreement:
“The parties agree that this agreement be made an award of the DRC/CCMA in terms of the Labour Relations Act 66, of 1995 Section 142A, in the event of non-compliance (when forming part of a Bargaining Council’s Jurisdiction).
The parties further agree that in the event of non-compliance of this agreement, the party defaulting will pay the full costs incurred by other party in enforcing this agreement.” (own emphasis)
In a Nutshell: Parties are advised to be careful and to ensure that they fully understand the terms and conditions of a Settlement Agreement before signing the Agreement. Settlement agreements are binding and should be signed with caution.
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