Recently, one of our clients had a curious case where an employee reneged on an agreement. The situation started off when the company urgently needed to appoint a ‘chef’ for their business. The ‘vacancy add’ was quite specific, and during the interview the employer was convinced that they are making the right choice. The employee was offered the position, and he signed a permanent contract with a 3 months’ probation clause.
Within a week, it was clear that the employee’s abilities were not up to par. At least not through the eyes of the employer. The employee, on the other hand, still firmly believed he is performing adequately, and did not accept the employer’s guidance and reprimands.
Very quickly, the situation digressed to a point where the employer called the employee to the office and informed him that the situation had reached a breaking point. The company was willing to send the employee on training and get him up to par, but the employee must accept a reduction in salary until his is fully trained. The employee rejected the proposal, still believing he is up to par, and refused to take a salary cut.
The employer then offered a mutual termination agreement where the parties agree to part ways amicably. The employer sweetened the offer by indicating that the employee will be paid for the full month, despite only working for a week. The employee agreed on the condition that the company pay the money immediately. Both parties signed the agreement, and the employee left. The employer paid the month’s salary the same day.
Within 24 hours, the owner of the company started receiving threatening messages from the employee, claiming the company dismissed him unfairly, and that he had gone to “Labour”, and they informed him that the company must pay him another two- or three-months’ salary. If the company does not, the employee will go to the CCMA, and claim unfair dismissal.
Taken aback, the employer suggested to the employee that they were under the impression that the parties parted amicably. It was for this reason that the employer had paid the employee’s full month salary, despite the employee only working for a week. However, the employer offered that if the employee was not happy with the agreement anymore, he was welcome to return to work, as he was already paid for the full month, and then continue to work as normal. However, both parties must sign on the agreement to cancel it, as the agreement is still in effect. Predictably, the employee refused to return and kept on threatening to go to the CCMA unless he is paid another two month’s salary.
The employer then stopped all communication with the employee, awaiting the CCMA referral.
Unfortunately, the above case seems to be more often the norm than the exception. Employees can make decisions in the heat of the moment, but later renege on these decisions. This begs the question as to how these situations can be avoided or mitigated.
Here are the following steps to avoid such situation:
- In cases where an employee does not perform to the relevant standard during the probation period, the employer should start the ‘performance management process’. During this process the employee’s performance should be evaluated (and recorded), and the employer can provide instruction, training, guidance and/or counselling to allow the employee to render a satisfactory service.
- Theoretically, the employer may either extend the probation period or dismiss the employee if their performance is not on par during probation. However, it would be difficult for the employer to make an argument that the employee has been given a fair opportunity to improve their performance if the employee had been dismissed after the first evaluation. It would therefore be recommended that the employer give the employee a few fair opportunities to improve, and only if the poor performance or incompetence persist should a dismissal be considered. Each evaluation should be recorded, and a fair period for improvement should be given.
- After a number of evaluations, with no significant improvement, the employer should hold a ‘poor work performance’ hearing. During this hearing, the employer should give the employee an opportunity to make representations and then consider these representations. The employer should also investigate if there are any alternative to dismissals. In the end, the employee should only be dismissed if there is no reasonable alternative to dismissal.
However, sometimes situations digress too quickly, and both parties had come to the resolution that it would be best to part ways. It is usually best practise to have a written termination agreement. This agreement must be signed by both parties, including at least two witnesses which can testify that both parties were of clear mind, and signed the agreement without duress.
Despite a mutual termination agreement, an employee can still go to the CCMA.
In Hodges v Urban Task Force Investments, CC and others (JR 840/12) [2013] ZALCHB 295 (handed down on 7 November 2013) it was held that a commissioner was obliged to consider whether the Applicant who had signed an agreement had in fact waived his rights in the agreement. The mere fact that he had signed the agreement does not determine the lawfulness of the agreement. For example, if the employee was forced or coerced into signing the agreement, the agreement might not be lawful.
In NEHAWU obo Nkoana v South African Nursing Council [2013] 4 BALR 420 (CCMA) the Commissioner held that the CCMA had jurisdiction to interpret settlement agreements. In this instance the employee had entered into a full and final settlement agreement but reserved the right to refer the dispute afresh if he was not satisfied with the appeal outcome. The Commissioner held that under these circumstances the first agreement was in fact not in full and final and the employee could pursue his dispute before the CCMA.
In considering the above, the CCMA has jurisdiction to interpret the mutual termination agreement (or settlement agreement), to determine if the agreement is lawful. If the agreement is not considered lawful, or it was found the employee was forced into signing, then the Commissioner can continue to hear the dispute. It is therefore important to ensure that there is sufficient evidence to proof that the employee signed without duress while of clear mind.
In closing, it would also be advised that the employee should not be placed under the impression that there is no other reasonable alternative but to sign the agreement. For example, to force the employee to either accept an unfair demotion or to sign a mutual termination agreement might be considered unfair labour practise, and a Commissioner may decide to rule that a dispute of unfair dismissal exist.
