At a glance
- In WBHO Construction (Pty) Ltd v Masenye NO and Others (JA124/24) [2026] ZALAC 10 (26 February 2026), the Labour Appeal Court (LAC) held that where a mutual separation agreement is freely and voluntarily concluded, no dismissal arises.
- Consequently, the statutory unfair dismissal regime under the Labour Relations Act 66 of 1995 is not engaged.
- Employers should ensure that mutual separation agreements are clearly drafted, consensual, and signed voluntarily.
The Facts
The employee commenced employment with the employer on 18 April 2018 as a final level grader operator. In November 2020, the employer’s operator training manager approached the employee to discuss the company’s operational needs and the possibility of transferring the employee to the Northern Cape, where his skills were required. The employee declined the transfer because he did not want to be away from his family. According to the employer’s testimony, the employee asked to be retrenched, citing financial difficulties at home and a home construction project. The employee’s version differed. He claimed the employer told him he would be retrenched if he refused.
On 3 December 2020, the parties signed a document titled “Mutual Separation Agreement”, and the employee received severance pay of R181,541.75. He subsequently referred an unfair dismissal dispute to the Bargaining Council for the Civil Engineering Industry. The arbitrator found that the document was not a genuine mutual separation...
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