A full bench of the High Court disallowed an appeal against the judgment of the late Dukada J. The settlement agreement was a compromise in an unfair dismissal dispute. Two clauses may not have been strictly accurate. But only the former employee’s sense of propriety and fairness may have been offended. Such settlements are concluded daily and mirror the reality of what happens in the courts. The settlement agreement was valid and was not contrary to public policy.
Lawrie v Nursing Response CC (CA 331/2014) ; [2016] JOL 35965 (HC) (19 May 2016) per Bloem J [Hartle J and Bacela AJ concurring]
Excerpts without footnotes
[11] I now deal with whether or not the compromise is invalid by reason of the fact that the two clauses in question are contended to be contra bonos mores. The issue to be addressed in this regard is whether it can be said that those clauses are clearly inimical to the interests of the community, contrary to the law or morality or run counter to social or economic expedience and, accordingly, unenforceable. The following principles must be borne in mind when that issue is addressed. It should not be concluded that a contract is contrary to public policy merely because some of its terms offend one’s individual sense of propriety and fairness. Although public policy generally favours the utmost freedom of contract, it nevertheless takes into account the necessity of doing simple justice between person and person. The court’s power to declare contracts invalid which are against public policy is a power to be exercised sparingly and only in the clearest of cases.
[12] Mr Dyke, counsel for the appellant, submitted that the parties changed the factual situation in a dishonest way and that the appellant will commit a fraud if she present the settlement agreement in its present form to a prospective employer. I do not agree.
Firstly, the clauses offend only the appellant’s sense of propriety and fairness. Neither the first nor the second respondent is offended by those clauses. Prospective employers would also not be offended because, if they make enquiries as to the termination of the appellant’s services by the first respondent, the settlement agreement speaks for itself. If needs be the appellant can explain to prospective employers that the first respondent dismissed her, that she challenged the dismissal because she believed it was unfair and that at the arbitration hearing the first respondent conceded the possibility that her dismissal might have been unfair and therefor agreed that her services were terminated on 25 November 2010 as a result of the expiration of the fixed period, agreed to between the appellant and the respondents at the arbitration hearing, as set out above.
[13] Secondly, matters are settled on a daily basis in the high and labour courts with clauses containing similar wording. The two clauses in question mirror the reality of the situation in our courts. Those clauses do not run counter to social or economic expedience and are, in my view, not inimical to the interests of the (employer/employee) community. In my view the two clauses are not contra bonos mores. The settlement agreement is accordingly not invalid. The appeal against the finding of the court a quo in that regard should therefore be dismissed.