Labour Law – False or Inaccurate Termination Information Can Now Lead to Criminal Liability

South Africa’s Labour and Employment Laws are some of the most progressive and liberal in the world, with a recent Labour Court judgement proving just how tricky and unpredictable these laws can be. Over the past 2 years, many South Africans have lost their jobs as a result of COVID-19 and its undeniable impact on the workplace and economy. However, we will look at a recent Labour Court judgement that did not revolve around COVID-19, but still carries immense value for similar cases where inaccurate reasons were noted for termination.

The Case of Inaccurate Termination Information at the Behest of an Involved Party

Settlement agreements between employers and employees are usually mediated to be beneficial for both parties and would rarely record accurate and factual reasons for dismissal, retrenchment, or other grounds for contractual termination between the involved parties. At the behest of either employee or employer, termination information will state a valid reason that can be inaccurate to allow for certain perks or not to damage the involved party’s credentials for future endeavours. This was the case with Swanepoel v KPMG Services (Pty) Ltd.

The Difference Between Retrenchment and Resignation

People might not be aware of the legal aspects that differentiate retrenchment from resignation, causing confusion when their jobs/careers are on the line. In recent years, unfair retrenchments/dismissals have been a major issue in South Africa as a result of COVID-19 lockdowns and restrictions. If you are retrenched, you can be eligible to claim UIF and personal insurance as a result of job loss. However, if you resign, you are not eligible to claim either, which can be critical for someone with no monthly income. This brings us back to Swanepoel v KPMG Services (Pty) Ltd.

The Case and the Outcome

Swanepoel, a previous senior employee at KPMG Services (Pty) Ltd., was alleged by his employer that he was underperforming, presenting him with an opportunity to resign to avoid a disciplinary process that could lead to retrenchment. He was unwilling to resign, as he would wave his rights to claim UIF and personal insurance. Therefore, KPMG recorded the reason for termination as “involuntary resignation”, which meant that Swanepoel could not claim any insurance money. As a result, he sought to compel KPMG to change his UI-19 form to allow him to claim UIF.

In this case, the Labour Court ruled on the grounds that inaccurate termination information could lead to criminal liability for the employer, denying that they retrenched or constructively dismissed Swanepoel. However, KPMG was willing to concede and rectify the error to reflect the accurate reasons for employment termination as stated in their settlement agreement.

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