Summary of Judgment

1. Introduction

This matter concerned an application in the Labour Court to review and set aside an arbitration award issued under the auspices of the National Bargaining Council for the Chemical Industry. The applicant also sought consequential relief in the form of a declarator that the bargaining council had jurisdiction to determine his unfair labour practice referral (the same referral in respect of which jurisdiction had been declined).

The parties were Sithembiso Innocent Khumalo as the applicant (an employee), Kansai Plascon (Pty) Ltd as the first respondent (the employer), Vanshee Naidoo N.O. as the second respondent (the arbitrator who issued the award under review), and the National Bargaining Council for the Chemical Industry as the third respondent (the bargaining council whose jurisdiction was in issue).

Procedurally, the dispute originated in arbitration proceedings before the bargaining council. A jurisdictional award was issued on 31 May 2022 under case number CHEM 47-21/22, finding that the bargaining council lacked jurisdiction. A subsequent referral on similar issues led to a further jurisdictional ruling on 2 June 2023 under case number CHEM 67-22/23, again finding lack of jurisdiction. The present review application was launched on 15 February 2024, and the applicant also sought condonation for the late filing of that review.

The general subject-matter underpinning the jurisdictional disputes was an alleged unfair labour practice relating to a shift agreement and standby policy, and the applicant’s claim for payment of allowances asserted to be due under those policies. In the Labour Court, however, the determinative issue became the effect of a Voluntary Retrenchment Agreement concluded during the pendency of the litigation.

2. Material Facts

On 31 May 2022, the arbitrator (second respondent) issued an arbitration award in CHEM 47-21/22 finding that the bargaining council (third respondent) lacked jurisdiction to determine the applicant’s unfair labour practice referral. The dispute described in that award concerned a shift agreement and standby policy, and a claim by the applicant for payment of allowances in terms of those policies.

On 6 October 2022, the applicant referred a further unfair labour practice dispute concerning the same issues and seeking the same relief. That matter was allocated case number CHEM 67-22/23. On 2 June 2023, following a hearing on 31 May 2023, an arbitrator issued a ruling in that matter again finding that the bargaining council lacked jurisdiction.

On 15 February 2024, the applicant instituted the present review application directed at the earlier award (CHEM 47-21/22). The applicant elected not to pursue a review of the later jurisdictional ruling in CHEM 67-22/23, and that ruling remained extant.

A further material development occurred on 9 June 2025, when the applicant and the first respondent concluded a Voluntary Retrenchment Agreement (VRA). The VRA was introduced into these proceedings through supplementary affidavits filed by both the first respondent and the applicant. It was common cause that the applicant did not challenge the validity of the VRA on recognised grounds such as duress or misrepresentation.

The court considered several provisions of the VRA as directly relevant. These included an express acknowledgment by the applicant that he entered the agreement freely and voluntarily with full understanding of its terms, and a full and final settlement clause providing that amounts paid were inclusive of any and all amounts the applicant “is or may be entitled” to receive from the employer. The agreement further recorded a waiver of all claims of any nature whatsoever, expressly including claims arising from alleged breaches of employment legislation and claims relating to alleged unfair labour practices. The VRA also contained an undertaking that the applicant had not instituted claims and would not institute claims in any forum related to alleged breaches of the employment contract and/or employment legislation and/or in respect of any amount not set out in the agreement.

The applicant disputed that the VRA barred the review application, contending (in substance) that the VRA did not specifically refer to the present review, that it was ambiguous, that statements made during negotiations suggested pending cases would not be affected, and that other external instruments (including a CCMA jurisdictional ruling concerning another employee and an agreement involving unions and non-unionised employees) supported the view that his dispute could proceed. The first respondent denied that such negotiation statements were made, and relied on the wording of the VRA as precluding continuation of the review.

3. Legal Issues

The central legal question was whether, on the proper interpretation and effect of the Voluntary Retrenchment Agreement, the applicant had waived or extinguished the right to continue litigating the review application and the underlying dispute to which it related.

This was primarily a dispute concerning the application of law to fact, namely the legal consequences of an undisputed settlement agreement (the VRA) for pending litigation, assessed against the factual context that the VRA was concluded after the review had been launched and that it contained wide full-and-final settlement and waiver language. To the extent that the applicant alleged ambiguity or reliance on negotiation statements, the matter also implicated issues concerning the evaluation of alleged extrinsic assertions and whether they could affect the meaning or effect of the written settlement terms, as well as whether those assertions were admissible.

A consequential issue was whether it remained necessary for the court to determine the condonation application for the late review, given the asserted dispositive effect of the VRA. A further issue concerned the appropriate costs order, taking into account the Labour Court’s approach to costs.

Notably, although the papers sought a declarator about the bargaining council’s jurisdiction and the setting aside of the arbitration award, the court’s reasoning proceeded on the basis that these merits did not require determination if the VRA operated as a complete bar to the litigation.

4. Court’s Reasoning

The court treated the VRA as central to the disposition of the matter. It noted that the VRA was placed before it by supplementary affidavits and that the applicant did not attack the VRA’s conclusion on recognised grounds such as duress or misrepresentation. In those circumstances, the court approached the dispute on the basis that the VRA was a valid agreement and that its plain wording had to be given effect.

On interpretation, the court held that the VRA’s language was clear and unambiguous and that it was framed broadly to encompass all claims of whatever nature relating to the applicant’s employment relationship with the first respondent. The court considered that the agreement’s full-and-final settlement provisions and express waiver clauses covered claims arising from employment legislation and included, specifically, alleged unfair labour practice claims. The court therefore concluded that the review application fell “squarely” within the category of matters that the applicant had agreed to waive.

The applicant’s contention that the VRA did not expressly mention the pending review application was rejected. The court reasoned that the breadth of the settlement terms did not require specific identification of each pending matter for the waiver to apply, given that the VRA expressly covered all claims of whatever nature relating to the employment relationship and expressly referred to unfair labour practice claims among the waived categories.

The court also rejected the contention that the VRA’s wording was ambiguous. It held that an alleged misunderstanding by the applicant could not override the agreement’s clear terms. The court further dealt with the applicant’s reliance on alleged negotiation statements that pending matters would not be affected. It recorded that the first respondent denied such statements and held that they had not been confirmed and amounted to inadmissible hearsay. The court added that, even if such statements had been made, they would not override the express terms of the written VRA as concluded.

The applicant’s reliance on a CCMA jurisdictional ruling concerning another employee was treated as non-determinative. The court held that such a ruling was not binding on the Labour Court and did not influence the interpretation of the VRA binding the applicant. The court also noted that, to the extent the ruling might be relevant, it was being taken on review. Similarly, the applicant’s reliance on an agreement concluded between certain unions and non-unionised employees was held to be of no significance to the present proceedings because the applicant was bound by the VRA he personally concluded.

Having found that the VRA encompassed and waived the claim pursued through the review, the court characterised the agreement as extinguishing the underlying dispute and constituting a complete defence to subsequent litigation concerning the same subject matter. On that basis, the court concluded that it was unnecessary to determine the condonation application.

In relation to costs, the court considered whether to depart from the approach that costs in the Labour Court do not necessarily follow the result. It was not persuaded that a departure was warranted, and therefore made no costs order.

5. Outcome and Relief

The Labour Court dismissed the review application. The court made no order as to costs.

The court did not determine the merits of the jurisdictional ruling under review or the applicant’s request for a declarator on the bargaining council’s jurisdiction, because it held that the Voluntary Retrenchment Agreement barred the continuation of the litigation and extinguished the underlying dispute. The court similarly did not determine the condonation application because it found it unnecessary in light of the dispositive effect of the VRA.

Cases Cited

No cases were cited in the judgment.

Legislation Cited

Labour Relations Act 66 of 1995 (as amended)

Basic Conditions of Employment Act 75 of 1997 (as amended)

Employment Equity Act 55 of 1998 (as amended)

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the applicant, by concluding a Voluntary Retrenchment Agreement containing clear full-and-final settlement and waiver provisions, abandoned or waived the right to pursue the pending review and extinguished the underlying dispute forming the subject matter of the litigation. The review application therefore could not proceed and was dismissed, and it was unnecessary to determine condonation. No costs order was made.

LEGAL PRINCIPLES

A valid settlement agreement concluded between an employee and employer, containing clear and comprehensive full-and-final settlement and waiver clauses, may operate to extinguish the underlying dispute and provide a complete defence to further litigation concerning the same subject matter, including pending proceedings, where no contractual term preserves the right to continue with such proceedings.

Where the terms of a written agreement are clear and unambiguous, an alleged subjective misunderstanding by a party cannot displace the agreement’s expressed meaning as adopted by the parties in writing.

Alleged negotiation-stage statements that contradict the express written terms of a settlement agreement, particularly where denied and not confirmed, may be treated as inadmissible hearsay and, in any event as addressed in the judgment, do not override the express provisions of the concluded agreement.

In costs determinations in the Labour Court, the court may adhere to the approach that costs do not necessarily follow the result, and may decline to award costs absent a sufficient basis to depart from that approach.