Agreements Restricting A Person`s Freedom Of Trade Are Valid In South Africa

These employment contracts are mandatory documents and are subject to the Labour Act. Agreements may sometimes have conditions that exceed the basic minimum legal requirements. Many other clauses need to be carefully considered and understood before being signed by potential staff. The engineer, having received a great deal of training as the owner of the organization, found that the restriction of the trade agreement was not unreasonable or contrary to public policy. The employee was prohibited from doing his new job. The second point to consider is that South African jurisprudence shows that the withholding of trade agreements is legally applicable, despite the common belief that this is not the case. Don`t assume that a restriction agreement is a bluff from your employer. The signing (or subsequent termination of the contract) should not be done lightly, as the legal department might have thought it through. A trade restriction is an agreement between an employer and a worker or a provision of an employment contract that prevents a worker from being employed by a competitor of the employer or from setting up a business in competition with the employer after the termination of the employment. On December 23, 2016, the Labour Court rejected an application by the applicant (Halo) to have failed its two former employees, the respondent (Knight and Breedt), in order to protect their confidential information and customer ties. The motion invoked the terms of alleged restrictions on trade agreements between Halo and Knight and Breedt, which prohibited them from somehow being tied to competitors for 24 months. When can a restriction on the trade agreement be imposed? In determining the adequacy of an employer`s trade restriction, a court will consider the company`s ownership interest in relation to the extent of the restriction on the geographic area and duration of the restriction and the capacity in which the worker is prevented from working. Is it reasonable for an employer to submit a trade restriction to you and should you sign it? Responses need to be considered on a case-by-case basis, but some general principles need to be considered.

In a recent end of the case, there was a factual dispute over the existence of trade restriction and a possible hi-jacking of the employer by the workers. The employee acknowledged the creation of a new company in direct competition with the employer. The employer did not obstruct the restriction of the trade agreement and claimed that the workers had destroyed the restriction of the trade agreement. The employer also failed to restrict trade agreements by other agents who would have weighed in on its favour. The material dispute could not be resolved on paper. Our economy is a systemless market system and companies should be allowed to deter workers from any form of unfair competition. The employer should be able to prove that it is reasonable and not contrary to public policy. Section 22 of our Constitution protects the freedom of every citizen to choose his profession, profession or profession. However, it is possible to impose free deduction. Trade restrictions are valid and applicable on its face, unless the party lifting its undertakings can demonstrate that the deference is contrary to the public interest. A restriction of the trade clause is used to protect the employer`s interests – including its trade secrets, confidential information and customer information – which gives a company its competitive advantage and protects the company`s information from the possibility of passing into the hands of its competitor. The party who argued that the restriction of the trade agreement is contrary to the public interest should convince the court that the agreement is unfair and unenforceable.