Settlement agreements are frequently regarded an easy way out by the employer when dealing with a CCMA matter.
With the CCMA aiming to settle 70% of all cases, it should not influence the employer to settle each and every dispute. Especially when the correct procedure was in fact followed as sometimes these settlements could be more costly than planned.
Is a settlement agreement or arbitration award enforceable?
The Labour Relations Act provides that an arbitration award issued by a commissioner is final and binding and may be enforced as if it were an order of the Labour Court in respect of which a writ (warrant of execution) has been issued. With the prcess being simplified, it is only that much easier to enforce an unpaid arbitration award.
Interest is applicable…
If an arbitration award orders a party to pay a sum of money, the amount earns interest form the date of the award. Interest is earned at the same rate as the rate prescribed in terms of the Prescribed Rate of Interest Act, unless the award provides otherwise.
What could happen if I do not act in terms of the settlement or award?
Once you have received your settlement agreement or arbitration award a date would have been agreed upon or given by when the payment or performance needs to take place. Should the employer fail to meet the deadline for the payment or performance he/she might be at risk of having the Sheriff knocking at their door.
Once an award is certified, it can be executed upon delivery to the Sheriff. There is no need to approach the Labour Court for a writ to be issued first.
Where the payment of an amount of money was agreed upon in a settlement agreement or an arbitration award was made in respect thereof, the Sheriff may enforce the execution by attaching movable property of the employer and selling it for the amount that is owed to the employee.
Where there was an order for performance, the performance of an act other than the payment of money may be enforced by way of contempt proceedings instituted in the Labour Court.
Accordingly, it is always the safest option to ensure that proceedings are attended to in fair manner to avoid any unnecessary CCMA claims as well as any sheriffs who would be enforcing the agreements and awards thereof.
As a registered employers’ organisation with the Department of Labour, the LWO can represent our members at the CCMA, Bargaining Councils and Labour Court. Contact us for any assistance or advise.
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LWO Regsadviseur - LWO Legal Advisor
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