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Mutual Separation Agreement

R1 299

Create a formal agreement for an employer and employee to end the employment relationship by mutual consent, while recording the separation date, payment terms, return of property, confidentiality, full and final settlement, and release of claims.

A Mutual Separation Agreement is used where an employer and employee agree to end the employment relationship by consent. It is commonly used to resolve workplace disputes, avoid prolonged disciplinary or incapacity processes, settle employment-related claims, or record an agreed exit arrangement. If properly concluded, the termination is based on agreement rather than a unilateral dismissal or resignation. The agreement should clearly record that the employee enters into it freely and voluntarily, understands the consequences, and has had a reasonable opportunity to seek advice.

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South African legal context (2026 checklist)

A mutual separation must not be forced, disguised, or used to compel an employee to accept termination. If the employee’s consent is obtained through duress, misrepresentation, undue pressure, or an absence of true agreement, the employee may later challenge the agreement and allege dismissal, constructive dismissal, or automatically unfair dismissal. The agreement should therefore be clear, signed by both parties, supported by proper payment terms, and should avoid misrepresenting the reason for termination. Employers should also ensure that any waiver, release, confidentiality clause, restraint clause, or full-and-final-settlement clause is fair, lawful, and appropriate to the facts.

  • Labour Relations Act 66 of 1995
  • Section 185: Right not to be unfairly dismissed or subjected to unfair labour practice
  • Section 186(1): Meaning of dismissal
  • Section 186(1)(e): Constructive dismissal where the employee terminates employment because the employer made continued employment intolerable
  • Section 187(1)(c): Automatically unfair dismissal where dismissal is used to compel acceptance of a demand in a matter of mutual interest
  • Section 188: Requirement of fair reason and fair procedure where dismissal is alleged
  • Section 189: Dismissals based on operational requirements, where the agreement arises from a retrenchment context
  • Section 191: Referral of unfair dismissal and unfair labour practice disputes
  • Section 192: Onus in dismissal disputes
  • Section 196: Severance pay
  • Basic Conditions of Employment Act 75 of 1997
  • Section 37: Notice of termination
  • Section 40: Payments on termination
  • Code of Good Practice: Dismissal, 2025
  • Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Ltd and Another [2016] ZACC 33
  • Barkhuizen v Napier 2007 (5) SA 323 (CC)
  • Beadica 231 CC and Others v Trustees for the time being of the Oregon Trust and Others [2020] ZACC 13

Use this as a starting point only. Verify current gazetted amendments, tribunal rules, and SARS / DOL circulars that may apply to your matter.

Typical questions we'll walk you through

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What is the employer’s full legal name?
What is the employer’s full legal name?
What is the employee’s full name, position, department, and employee number?
What is the employee’s full name, position, department, and employee number?
What is the employee’s start date?
What is the employee’s start date?
What is the agreed last working day or termination date?
What is the agreed last working day or termination date?
Is the separation voluntary and by mutual agreement?
Is the separation voluntary and by mutual agreement?
What is the reason or background for the separation?
What is the reason or background for the separation?
Will the employee work during the notice period, be paid in lieu of notice, or be released from duty immediately?
Will the employee work during the notice period, be paid in lieu of notice, or be released from duty immediately?
What separation payment, ex gratia amount, severance amount, or settlement amount will be paid?
What separation payment, ex gratia amount, severance amount, or settlement amount will be paid?
Will accrued leave, salary, bonuses, commission, overtime, or other benefits be paid?
Will accrued leave, salary, bonuses, commission, overtime, or other benefits be paid?
By when must payment be made?
By when must payment be made?
Will statutory deductions, PAYE, UIF, pension, medical aid, or other deductions apply?
Will statutory deductions, PAYE, UIF, pension, medical aid, or other deductions apply?
Must the employee return laptops, access cards, keys, uniforms, vehicles, documents, or devices?
Must the employee return laptops, access cards, keys, uniforms, vehicles, documents, or devices?
Must the employee keep company information confidential after termination?
Must the employee keep company information confidential after termination?
Will the parties agree not to make negative statements about each other?
Will the parties agree not to make negative statements about each other?
Will the employer provide a certificate of service or reference letter?
Will the employer provide a certificate of service or reference letter?
Are there restraint of trade, confidentiality, intellectual property, or non-solicitation obligations that will continue after termination?
Are there restraint of trade, confidentiality, intellectual property, or non-solicitation obligations that will continue after termination?
Is the agreement in full and final settlement of all employment-related claims?
Is the agreement in full and final settlement of all employment-related claims?
Will either party admit liability, or will the agreement state that there is no admission of liability?
Will either party admit liability, or will the agreement state that there is no admission of liability?
Has the employee been given an opportunity to obtain advice before signing?
Has the employee been given an opportunity to obtain advice before signing?
Who will sign the agreement on behalf of the employer?
Who will sign the agreement on behalf of the employer?

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