A recent Labour Court case [Swanepoel v KPMG Services (Pty) Ltd.] emphasised the importance of being mindful of any and all legal consequences for both employer and employee when entering into settlement and/or separation agreements regarding labour and employment contracts between 2 such parties. Any false, inaccurate, or mischaracterised information could lead to criminal liability on either of the involved parties, as this specific case highlighted. Today, we will look at the details of the outcome of this case and the implications of the outcome regarding settlement agreements between employer and employee in South Africa.
Why Did Swanepoel Take Legal Action?
There is a clear distinction between retrenchment and resignation in terms of eligibility to claim UIF income and/or personal insurance in the case of job loss. If an employee resigns, willingly or unwillingly, they are not eligible to claim personal insurance or UIF income, which is why Swanepoel decided to take the matter to court, as the termination information on his UI-19 form noted “unwilling resignation”. The outcome of the case had the employer conceding the case and rectifying the termination information to represent a more accurate and true reasoning behind Swanepoel’s termination. On top of that, the court found that, if the employer noted false information on the employee’s UI-19 form, they could be held criminally liable for such an act.
The Impact of This Outcome
In the case where an employer and employee enter into settlement negotiations regarding the termination of the employment contract between the 2 parties, the objective is to find common grounds to reach a mutual agreement that works for both parties. At the behest of an involved party, factually incorrect reasons for termination are likely to be noted in an attempt to smooth over the termination. However, given the outcome of Swanepoel v KPMG Services (Pty) Ltd., such an act can now give rise to criminal liability, emphasising the importance of being mindful and aware of the legal consequences when committing such an act.
Trust Our Labour Law Experts
We live in an unpredictable and uncertain period in South Africa regarding job security and the legal rights of both employer and employee when it comes to COVID-19. Moreover, cases such as Swanepoel v KPMG can create new precedents and change the way settlement agreements between employer and employee are handled. Therefore, you need Labour Law experts in your corner when entering negotiations regarding your employment contract.
Allardyce & Partners Attorneys is your first choice when you seek professional Labour Law solutions and legal representation. Please contact us on 011 234 2125 or email us at enquiries@allardyce.co.za for details on how we can assist you today.
