Minister of Justice and Constitutional Development v C J C Myburgh and Others

The respondents, employees of the Department of Justice and Constitutional Development, instituted claims for payment of amounts allegedly due under a collective agreement said to be incorporated into their individual employment contracts. During litigation in the Labour Court, the State Attorney, acting for the Minister, sent the employees a written settlement proposal in April 2011 and requested signed acceptance. The employees did not sign but made a counter-offer, which was rejected. The State Attorney stated that the original proposal would remain open for acceptance until 12 August 2011. The employees only purported to accept and sign the agreement on 19 August 2011, after the deadline. The Minister never signed the agreement and denied authorising the State Attorney to conclude a binding settlement. Despite this, the Labour Court made the alleged settlement agreement an order of court under s 158(1)(c) of the Labour Relations Act.

The appeal was upheld with costs. The Labour Court’s order was set aside and substituted with an order dismissing the application with costs.

The case clarifies the application of contract-law principles of offer and acceptance to settlement agreements in labour disputes and underscores that a counter-offer extinguishes the original offer. It affirms that where parties intend to be bound only by a written and signed agreement, no binding contract arises until signature by all parties. The judgment also limits assumptions about the State Attorney’s authority to bind organs of state and provides guidance on when settlement agreements may properly be made orders of court under the Labour Relations Act.