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WCLawyer
WCLawyer, Attorney
Category: South Africa Law
Satisfied Customers: 15597
Experience:  L.LB (UOVS)
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Good Morning, I currently work in the beauty industry and

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Good Morning,

I currently work in the beauty industry and am a qualified professional and have recently started working for a new employer. The details of my situation:
A) I worked for my previous employers for roughly 5 years.
B) A year ago the business was bought by new owners as a going concern.
C) A few months ago i left this business to pursue a new opportunity (in the same industry).

Since I have started working for my new employer (C) my previous employer (B) has started harrasing my new employer (C) stating that i am in breach of my restraint of trade and they will be taking me to court. When my previous employers (B) bought the business from the original owners (A) I did not sign a contract with them (B) and only had an original contract with the previous owners of the business (A). There is proof that a contract was drawn up between the employer (B) and the employees however I did not sign this contract.

Would i be correct in assuming that due to the fact that i did not sign this contract I therefore cannot be in breach of a restraint of trade or would the fact that the business was purchased as a going concern make my original contract with my original employer (A) still valid in terms of the restraint of trade?

Thank you very much for your assistance.
Good day.

This is an info request to assist you better. Please continue on this thread.

How long did you work for B?
Customer: replied 3 years ago.

Good morning,


 


Approximately one year.

And when they presented you with this new contract, did you verbally object to it?
Customer: replied 3 years ago.

In all honesty i do not recall the contract being presented to me at any point in time.

1. The Labour Relations Act says that, when someone takes over a business as a running concern, he takes over the employees at the same terms and conditions. The Act actually says that he will be substituted as the employer in the employment contracts, as if he was the one who concluded it. So, if your old contract did not contain a restraint, then there is no restraint.

2. If the new contract was never presented to you (they need to prove, not only that it was, but also that you agreed to those terms and conditions, despite your signature not being on it), then I fail to see how they can enforce a restraint that was contained in that written agreement that was never presented to. You cannot unilaterally invoke a restraint of trade. The employee needs to agree to the restraint.

3. If there is no restraint of trade in the old contract, I think that your employer and you can tell them with confidence that they can take whatever legal action they deem appropriate, you will defend it and claim the costs from them.

I hope this answers your question, but if you have follow up questions before you rate, feel free to ask them at no extra cost. If you are satisfied with the service, kindly rate it positively. I do not get anything unless you rate the service
Customer: replied 3 years ago.

Thank you very much for the information.


With regards XXXXX XXXXX old contract there was a restraint of trade.


However with them stating (and presenting) that there is a new (unsigned) contract would that nullify the old contract?

It would not, unfortunately and the restraint of trade will probably still be valid. This does not, necessarily, mean that it can be enforced.

Generally a speaking, a contract of restraint of trade will, in the absence of factors like fraud and duress, be enforceable even if its terms are unreasonable or unconscionable. Since it is not the function of the court to remake the contract, it will not relieve one party from any term which he or she finds onerous or unexpectedly harsh. But an agreement in restraint of trade may, on the ground of public policy, be unenforceable.
The onus of proving that a restraint of trade is contrary to the public interest and hence unenforceable rests upon the opponent to the restraint. This burden of proof is not easily discharged. In deciding whether or not a contract in restraint of trade is contrary to the public interest, regard should be had to two considerations: agreements freely concluded should be honored, and everyone should be free to enter the business or professional world. An unreasonable restraint of trade between parties would in general probably also be contrary to the public interest. On the other hand, a restraint which is reasonable between parties might nevertheless, for a reason not peculiar to the parties, be in conflict with the public interest, and possibly also vice versa. Reasonableness is first of all determined with reference to the protectable proprietary interest(s) of the party in whose favour the restraint operates, which interest must have been infringed (actually, or there must at least have been a likelihood of or potential infringement). This interest should then (qualitatively and quantitatively) be weighed up against the interest of the other party (to be economically active and productive). If the latter interest surpasses the former interest, the restraint would as a rule be unreasonable and accordingly unenforceable. An important guideline in the weighing-up process is that the restraint should, as far as activities, area and duration are concerned, be necessary to protect the infringed or threatened interest. Other factors that may also play a part in judging the question of reasonableness, are facets of the public interest which have nothing to do with the relationship between the parties but may nevertheless require that the restraint should (or should not) be maintained, the inequality of bargaining power between the parties, the parties’ own view as to the reasonableness of the restraint, as well as the values underpinning the Constitution. The court will have regard to all the circumstances obtaining at the time when it is asked to enforce the agreement (and not when the agreement was concluded).

The court is not limited to a finding in regard to the contract in restraint of trade as a whole, but may declare the contract partially enforceable or unenforceable. The party seeking partial enforcement must establish a proper basis for such enforcement. In determining whether partial enforcement is justified, the court may take into consideration matters such as whether the restraint was unduly oppressive or designed to terrorize, and whether partial enforcement would not operate too harshly or unfairly towards the party bound by the restraint. An unreasonable restraint will not be partially enforced if it would require major plastic surgery, in the form of a drastic re-casting of its provisions, to make it reasonable. The court is therefore not obliged in all cases to whittle down an unreasonable restraint of trade until it eventually becomes reasonable.
WCLawyer and 2 other South Africa Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you very much for your assistance.

My pleasure. Please do not forget to rate.
Customer: replied 3 years ago.

I rated your service on the previous message.


 


Thanks again.

I did receive it. Thank you very much.