On 15 September 2016, the Constitutional Court in Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Ltd, held that a full and final settlement clause in an agreement to settle a dispute was lawful, even though the agreement contained a waiver to approach the CCMA or any other court for relief.
The court highlighted the importance of giving effect to agreements concluded by parties. Parties who have equal bargaining power are to be held to the terms of their agreements, not only in their own interests, but also in the interests of the public.
The applicant commenced employment with Reckitt Benckiser as a Regional Human Resources Director on 22 July 2013. An investigation begun in February 2014 about him misrepresenting his qualifications and employment history resulted in his suspension. Reckitt found that he had misrepresented, during the negotiations prior to his employment, that Unilever was his employer. In truth, his employer at the time was Standard Chartered Bank. Reckitt stated that the misrepresentation was material. It paid him a sign-on bonus of US$40 000 in the belief that he worked for Unilever.
After the suspension, Reckitt and the applicant concluded a separation agreement. Clause 3.4.2 of the separation agreement provided that the applicant unconditionally waived his right to approach the CCMA or any other court for relief emanating from his employment, his resignation and the separation agreement. The applicant subsequently contended that this clause rendered the separation agreement contrary to public policy and unenforceable because it denied him his constitutional right to access to justice.
When parties settle existing disputes in full and final settlement, no one should lightly be released from this undertaking seriously and willingly entered into.
Even though the court recognised that there may be public policy concerns with excluding the right to approach courts for relief, the applicant confessed that he had no defence to the misrepresentation and the court held that he entered into the agreement to put the dispute to bed. The court held that the applicant concluded the agreement knowingly and it protected the applicant from further action by Reckitt, including a disciplinary process that could have irremediably affected his career.
When parties settle existing disputes in full and final settlement, no one should lightly be released from this undertaking seriously and willingly entered into, especially where the person challenging the settlement wants to escape the consequences of their own conduct.