The working relationship, much like every other relationship, has its ups and downs, and can be terminated by either party. This begs the question – if normal relationships can reach an amicable mutual termination, why can’t working relationships do the same?

Well, the answer is – they can!

Usually there are four different methods by which an employment relationship can be terminated, being:

1. Dismissal: where the employer elects to terminate the working relationship based on a breach in the trust relationship that came about from the employee’s conduct.
2. Resignation: where the employee decides to terminate the working relationship for a better opportunity, intolerable working circumstances or a sabbatical (the possibilities and reasons are endless).
3. Automatic termination: where the employment period in terms of a limited duration contract is fulfilled, or a retirement age is reached.
4. Retrenchment: where the operational requirements of the company necessitates a termination in the contract of employment due to economic, technological, structural or similar needs of an employer.

However, what happens if none of the above is applicable and the parties both feel that the relationship is just not working or if an employer suspects misconduct but cannot prove same? Is there a way to terminate it, and if so, is the proposed way sound in law?

The recent Constitutional Court case of: Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Limited and Another^[1] re-affirmed the validity and lawfulness of a mutual separation agreement in terms of employment law.

A mutual separation agreement is an agreement entered into and between both the employer and the employee, whereby the parties agree to mutually terminate the employment relationship based on an agreed upon compensation amount, where after they both forfeit their right to any further claims in the bargaining forums or Courts.

This eventually means that the termination is by no fault of either party, based on the consent of both parties to mutually terminate the working relationship, in an amicable fashion.

Employers are however advised to rather consult with an attorney prior to drafting and entering into a mutual termination / separation agreement as this agreement, much like any other contract, has certain requirements in order to be valid and sound in law.

Employees on the other hand are encouraged to fine comb mutual termination agreements and to consult with attorneys before signing same, in order to make sure that the settlement is to their benefit and that they are not entering into an agreement that can hamper future claims wherein they could have been awarded a larger amount than the proposed compensation in the mutual termination agreement.

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^[1] (2016) 37 ILJ 2723 (CC)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.