Hi Everyone,My wife is working for a financial institution as a first line manager. Gets a minimum wage of about R15 000 rand that is excluding her deductions and she is flooded with work in a short term insurance environment. She applied for another job and is successful. We have a bit of a concern though everyone working in that deparment is leaving because they are overworked and underpaid but recently her manager is randomly scaring people with a restraint of trade, of which people are still leaving and nothing happens. Is it allowed for a manager to use that to oppress employees to practice freedom of employment without being nervous of something happening. I mean she's not exposed to sensitive data either. Your assistance in this regard will be much appreciated.
Province: cape town
Nothing besides researching the internet
Thank you for using just answer.
I think your question is in regards XXXXX XXXXX scarring tactic of restraints of trades.
Two points should be borne in mind here: Firstly, there are no hard and fast rules when it comes to restraint of trade agreements, and secondly that such agreements are not ruled by labour law but by the law of contracts
The courts have defined restraint of trade agreements as a contract in terms of which one party (the employee) agrees with another party (the employer) to restrict his/her freedom to do business with a third party or to work for him or her in future. What it amounts to is that an employee undertakes inter alia not to work for the employer's competition for a certain period and in a specified area.
Although parties to a contract are generally deemed bound by it, the courts will not enforce a restraint of trade agreement if it is contravening public policy. It is more than likely to be contravening public policy in the following instances:
1. If the employer does not have a protected interest. A protected interest could include trade secrets, confidential information and client lists. Such information will not be deemed confidential if it is available in the public domain such as, inter alia, the internet, or if commonly applied in practice or in industry.
2. In cases where the scope is too vague, the area too wide, and the term of the restraint of trade agreement is too long. The courts may in some instances enforce the agreement, but limit the scope, area and term thereof.
3. If the restraint of trade agreement is only aimed at preventing sound competition. Should the agreement be enforced in such a case it would be infringing on one's fundamental right to the freedom of trade, occupation and profession.
The employee will have to prove the above and convince the court that on a preponderance of probabilities the restraint of trade agreement is unfair and unenforceable.
In your case it seems that the employer has not protect able interest and will have a difficult time proving it.
I trust the answer is helpfull. Please remember to give a positive rating in regards XXXXX XXXXX Quality of the answer.
I just need to clarify so you saying that its illegal to infringe and use restraint of trade when it affects freedom of trade and the employee in question finding a better position or there pocket. Their restraint of trade says that they cannot work in the same industry for the next six months. Is that at all legal?
As i said no hard and fast rules. it depends on what her next job and job description is. So my answer is yes, please remember not ILLEGAL, only an order cannot be given by the civil court. This means that the employer must prove points one to three above of which 1 is the most difficult.
So the three points that you listed above is law and should be proven for it to be legal or to hold up for instance in the court of law. Your assistance in this regard will be much appreciated. I just want to ensure that she's not being taken for a ride. Also, who is there to protect the employee at the workplace in cases like these, shouldn't HR be present and be able to explain these rules. Its the first that i have ever heard that you must be afraid to apply for another job especially when you not happy in your job. That to me is just wrong, oppressive and abusive on every level, its more like slavery and being dictated to by a dictator, which in this case is the employer. Can you advise on this or should this be taken to the legal expert of the company? Who can she speak to for surety and to stop this person if they talking about stuff that he\she has no knowledge about and actually scarring people in terms of changing jobs. Is this legal at all?
I cannot say every pint must be proven, each matter is taken on merits with these points as guidelines to assist. But the protectable interest is the one that is tride law meaning why interdict someone (employee) if their is nothing (employer interest) to protect. It makes sense does it.
I do not think that this restraint is unreasonable. I have many employee who has signed a restraint to protect my business as well as my fellow employees. FOr the that sole reason it is a necessary evil. I do understand from your prospective but remember you had to sign the contract and the law is clear you should have understood what you have perused and signed. So the answer is no. Their is no obligation on the HR or employee to explain the rules except if requested by employee.
BUT again if she had information or skills that would harm the company then the damages the company would have is worth protecting it from. A receptionist answering phones the whole day and not having access to information that may harm the business does not need to sign or if she did sign the court will not make an order interdicting her from working for a rival firm.
I trust this answer your qeustion.
BProc, LLB and MBA
Yes, it does, this is an amazing site. I will definitely make use of it in future. Thanks Bert, much appreciated. :)
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