A January 2026 judgment of the Labour Appeal Courthighlights the effect of vague drafting within a settlement agreement.
An employee’s alleged unfair dismissal dispute was settled on the basis that “the [employer] agrees to assist with the completion of the forms as required by the [employee], as applicable to the employer.”
The employee applied for permanent medical disability benefits under the Unemployment Insurance Fund (UIF). The employer informed the employee that in order to assist with his disability application, it required documents from the doctor who declared him medically unfit. The employee was unable to provide the documents. As a result, the employer was unable to complete the UIF forms.
The employee instituted contempt of court proceedings against the employer for alleging a failure to comply with its obligations under the settlement agreement, which agreement had been made an order of court.
The Labour Appeal Court found that there was reasonable doubt as to the employer’s duties, including whether the employer was obliged to assist in completing the UIF forms, whether the employer had the capacity to complete the forms, or whether the forms were to be completed by a doctor.
The Labour Appeal Court found that the employer had not intentionally acted in bad faith and as a result the employer was not in contempt.
The imprecise drafting of the settlement agreement had several negative consequences for the employer including the time and costs associated with having to defend itself in the contempt proceedings.
Employers should ensure that the obligations of parties to a settlement agreement are clear and should avoid using template agreements which are not adapted to the facts of each case.
Robertson and Cain (Pty) Ltd v Moses (CA1/25) [2026] ZALAC 1 (14 January 2026)
This blog is co-authored by Ila Alberts, candidate attorney