This case underscores the importance of ensuring that transaction agreements are developed with care and precision. Most of the time, a transaction contract is offered by the employer. This will be done in the context of a “non-prejudice” conversation or correspondence. In the most recent case of Genrec Engineering (Pty) Ltd v Metal and Engineering Industries Bargaining Council e.a.  ZALCJHB 213 (June 17, 2016), the employer instructed its employees to participate in a beE actions incentive presentation. A number of employees (already notified in writing at the time) refused to do so and were then dismissed. Employees questioned the fairness of layoffs. In the arbitration proceedings that followed, the arbitrator found that the dismissals were materially unfair and ordered reinstatement (without cross-payment). The employer tried to verify the sentence. However, the parties agreed to the annulment of the award, as the minutes of the arbitration procedure had been deleted by the bargaining board. A second arbitration was brought before a new arbitrator, after which the parties returned to mediation.
As part of the mediation process, the parties entered into a transaction agreement. The agreement provided, among other things, that the employer would reinstate employees “effective September 19, 2011.” What remained to be determined by the arbitrator was the amount of compensation reimbursed. In 2012, the arbitrator retroactively assigned staff members, from the date of their dismissal in February 2006 to the date of their reinstatement in 2011. Transaction agreements contain very legalistic language and can refer to sections of laws and regulations that you may never have heard of. You need to understand the impact of the agreement because you are deranging certain rights, so it is a legal obligation that you will receive professional advice on what the agreement means and how it will impact you. It is also required by law for your advisor to sign the agreement to confirm that the appropriate advice has been given. An employer will propose a settlement contract to prevent a worker from complaining to a court after being dismissed. As a general rule, the employer proposes that the worker enter into an agreement for a sum of money.
The debate on a possible solution can be done in a variety of ways; the employer would like to dismiss an employee. an employer may have a “protected interview” with a worker in which the employer proposes a transaction contract, usually as an alternative to a performance improvement procedure.