The Implications of a Full and Final Settlement Agreement Regarding Employment Termination

South Africa has a staggering record when it comes to unemployment, with the latest statistics showing a record-setting 35,3% of South Africans being unemployed at the end of Q4 2021. As a result, those who are employed will most likely put up a fight to keep their jobs, almost at any cost and especially when they are faced with retrenchment or dismissal that is based on unfair grounds. However, in some cases, employees enter into settlement agreements with the employer, often even in involuntary retrenchment’s, and later have to deal with the fallout or perceived fallout from such face full and final settlement agreements.

What are the Implications of Such a Situation?

In most instances, employers want to avoid or minimise the risk of litigation to ensure that they can terminate employment contracts without facing disputes in the Labour law tribunals and the associated hefty legal costs. This has extremely negative effects on the company’s balance sheets as these matters often get dragged out over a considerable time and if taken on review or appeal the employer is obliged to pay security, either the full amount of the award or an amount equivalent to the former employee’s salary for 24 months in the event of a reinstatement order, thus affecting their cash flow. Therefore, they are likely to resort to mediation or arbitration to resolve the matter and come to an agreement with the employee. These cases usually result in the parties entering intoa full and final settlement agreements, commonly accompanied by a severance package, which has become standard procedure for most cases.

The implications of reaching such an agreement can go far beyond mere severance pay, and in some cases, can also include non-disclosure agreements (NDAs) that are legally binding in perpetuity. Therefore, if the employee in question would spill the proverbial beans about the agreement or any subject matter that is covered by such an NDA, they will face legal charges based on contract breach. There are several reasons for employers to offer a final settlement agreement, with the most common relating to a workplace incident, not to mention the latest developments regarding COVID-19 workplace policies and the enforcement of mandatory vaccination.

What Should I Do When I face Unfair Retrenchment or Dismissal?

When your car breaks down, you call an expert to fix it and get you going again. This applies to the world of Labour and Employment Law in South Africa as well. During these times where precedent-setting rulings are made regarding the newly implemented COVID-19 regulations in the workplace, you should trust in experts to guide you and represent you in legal disputes to ensure a fair outcome. At Allardyce & Partners Attorneys, we offer Labour and Employment Law experts who are seasoned in this domain and can truly make a difference in your legal dispute. Contact the experts before embarking on any action to avoid unnecessary and costly losses.

We offer our services on a “no win, no fee” contingency for employees who earn more than R20 000 per month and can be your answer to a fair outcome when you are faced with a final settlement agreement from your employer. Please contact us on 011 234 2125 or email us at for details on how we can assist you today.

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