About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2014
>>
[2014] ZAFSHC 31
|
|
Bidvest Managed Solutions (Pty) Ltd v Assur and Another (4696/2013) [2014] ZAFSHC 31 (6 March 2014)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No. : 4696/2013
In
the matter between:-
BIDVEST
MANAGED SOLUTIONS (PTY)
LTD
.......................................................
Applicant
and
MARQUE
ANTHONY DAVID ARTHUR
ASSUR
.............................................
1
st
Respondent
GOLDEN
DIVIDEND 402 CC t/a INDUSTROSERVE
...................................
2
nd
Respondent
JUDGMENT
BY
:
KRUGER, J
HEARD ON:
27 FEBRUARY 2014
DELIVERED
ON
:
6 MARCH
2014
[1]
Applicant seeks to enforce a restraint of trade against the first
respondent. The second respondent is the new employer
of the
first respondent. No relief is claimed against the second
respondent and it has not entered an appearance to defend.
Applicant
conducts business in contract cleaning and associated business.
First respondent’s main responsibility
as business development
executive was the marketing of applicant’s services.
[2]
The first respondent signed the restraint undertaking on 14 July
2010. On that day the first respondent also signed an
employment agreement with the applicant in terms whereof the first
respondent was employed as a business development executive
with
effect from 1 August 2010. The restraint undertaking contains
the following in the first paragraph thereof:
“
I
shall not, either alone or jointly for the period during which I am
employed by the company and for a period of 12 months after
the
termination of my employment with the company, for whatsoever reason
(‘the restraint period’):-
1.1
whether
the employee, proprietor, partner, director, shareholder, member,
consultant, contractor agent, representative, assistant
or otherwise,
and whether for reward or not, directly or indirectly;
1.2
anywhere in the FREE STATE and NORTHERN
CAPE (‘the prescribed areas’);
be employed by and/or engaged and/or in any way
interested in any company, close corporation, firm, undertaking or
concern operating
in any part of the prescribed areas, which renders
contract cleaning and or other services connected therewith and
ancillary thereto
and/or which renders contract cleaning services
(‘the prescribed services’).”
[3]
The restraint also prohibits the first respondent from enticing
employees to leave applicant’s service, and furnishing
information to prospective customers of the company.
[4]
The employment of the first respondent with the applicant was
terminated on 6 September 2013 after he was found guilty of serious
misconduct at a disciplinary hearing. No details of this
misconduct are given in the founding affidavit. In the
answering
affidavit the first respondent says that he was not guilty
of any serious misconduct and his employment was unlawfully
terminated
and the applicant acted in bad faith. He took the
matter to the CCMA and at the time of filing the answering affidavit
the
proceedings before the CCMA were still pending. In the
replying affidavit, filed on 17 January 2014, applicant acknowledged
that the alleged unfair dismissal was referred to the CCMA. The
application to enforce the restraint, with which I am now
dealing,
served before CJ Musi J on 30 January 2014 and he deemed it necessary
to obtain more details of the CCMA hearing, and
postponed the matter,
granting the parties leave to file further affidavits and directing
them to file supplementary heads of argument.
[5]
The first respondent filed a supplementary answering affidavit on 5
February 2014, stating that the arbitration in the CCMA
took place on
15 January 2014 and that the arbitrator handed down her award on 23
January 2014, which is attached to the supplementary
answering
affidavit.
[6]
In the Award details are given of an incident between the first
respondent and the human relations officer of the applicant
(one
Goosen) during which the first respondent pushed Goosen against the
wall in the reception area and started squeezing his neck
during an
altercation between them and told Goosen that he did not need the
job. According to the Arbitration Award, the
first respondent
testified at the CCMA that Goosen used abusive language towards him,
and he was provoked, and he then shoved Goosen
against the wall in
the reception area. The incident occurred in the presence of
three people. According to the Award
the first respondent
acknowledged that his actions were inexcusable but he was provoked.
[7]
Applicant filed a supplementary replying affidavit in which the
deponent points out that first respondent pleaded guilty at
the
disciplinary enquiry and that although he relied on provocation he
unequivocally admitted that his conduct was wrong and inexcusable.
The applicant is taking the arbitration award on review, and the
documents in support of the review application are attached to
the
supplementary replying affidavit. First respondent filed a
second supplementary affidavit setting out that he has made
application to vary the Award at the CCMA because calculations were
based on incorrect figures. The matter was argued before
me on
27 February 2014.
[8]
In argument Mr Louw, for applicant pointed out that it is common
cause that the first respondent made contact with important
clients
of the first respondent. Southern Sun Hotels was one such
instance, where first respondent was seen talking to the
representative of Southern Sun by one of applicant’s employees.
That meeting is not disputed by the first respondent
but he
denies that he canvased the business of Southern Sun. In the
founding affidavit the allegation is made that he canvassed
business
and enticed employees away from the applicant. Applicant
mentions Thelma Jantjies, applicant’s contract manager
for
Southern Sun, and says that the first respondent suggested to her
that she seriously consider leaving the employ of applicant.
A
supporting affidavit of Thelma Jantjies is attached, but first
respondent denies that he contacted or had any discussions
with
Jantjies. In argument Mr Pienaar for first respondent suggested
that Jantjies is still employed with the applicant and
therefore had
no option but to sign the supporting affidavit. Mr Pienaar
seems to overlook the fact that his submission presupposes
that the
applicant invented the discussion and imposed upon Jantjies to commit
perjury. That is an allegation which is so
lacking in
credibility that it can be rejected on the papers.
[9]
Our law on restraint of trade is comprehensively set out in
Magna
Alloys and Research (SA) Pty) Ltd v Ellis
[1984] ZASCA 116
;
1984 (4) SA 874
(A) at 897F-898E. The onus is on person
alleging that he is not bound by a restraint to show that enforcement
of the restraint
is contrary to the public interest. It is not
necessary for applicant to show that the first respondent has acted
in breach
of the restraint in order to qualify to have it enforced.
The breach is relevant for the costs order and to show the need
for the restraint.
[10]
Mr Pienaar contended that the applicant does not have a protectable
interest, with reference to
Experian South Africa (Pty) Ltd v
Haynes and Another
2013 (1) SA 135
(GSJ) par [39]-[46].
First respondent’s case is that the information to which
he had access while employed by the applicant
is not confidential as
it is all in the public domain. He says the needs of clients
are in the public domain because they
are set out in tenders.
He also relies on The National Cleaners Association (“NCCA”)
documents. Mr Louw
points out the NCCA is an employers’
organisation that negotiates with unions. It is a voluntary body
which has no legislative
function to set out conditions of contract,
it recommends a standard form of contract for its members. In
response to first
respondent’s allegation that he did not
receive in-house training, applicant in reply attaches emails
confirming that first
respondent attended sales schools as well as
sales team building training. The important one is training on
costing. The
fact that the first respondent did not have the
final say on costing does not mean that he did not know the
applicant’s methods
and procedure to arrive at costing. In
my view the applicant has a protectable interest.
[11]
The first respondent says he was not on equal footing with the
applicant when he was asked to sign the restraint agreement.
Mr
Louw points out that the first respondent worked in Information
Technology before he took up employment with the applicant.
He
needed a larger income because of his personal expenses, and was
willing to accept a salary which was R7 000 per month
more than he
had been earning. There is no indication that first respondent
was forced to take up employment with the applicant.
He signed
the restraint agreement about two weeks before he started work. The
restraint is worded in clear terms and
he must have known, as an
experienced person, what he was letting himself in for. There
is no merit in the submission as
to unequal footing.
[12]
Mr Pienaar submitted that the area of the restraint is too wide. In
the answering affidavit the first respondent says
his area of
responsibility was within the Free State which excluded a number of
towns he mentions. As for the Northern Cape
he says he was
responsible for the Northern Cape but did not do marketing in certain
areas he names. In reply applicant says:
“
This
allegation is correct. However, several of the Applicants’
clients whom First Respondent serviced and to whom he marketed
Applicant’s services and products, have operations or business
interests in the towns referred to. First Respondent
did in any
event for instance visit clients in Kimberley. Given the
circumstances, First Respondent cannot expect the Court
to ‘
trim
’
the area of the restraint.”
Applicant
goes on to say:
“
For
the above reasons, the area cannot be ‘
trimmed
’
and Applicant does not have to run the risk of First Respondent
filching at Applicant’s customer base by being allowed
to
operate in certain towns which fall in the area which he agreed would
form part of the restraint.”
Mr
Pienaar could not refer me to a case where certain towns had been
excluded from the operation of a restraint in similar circumstances.
The courts will in limited circumstances apply the so-called
“blue pencil” test and delete portions of a restraint
which are too wide (See
The Restraint
of Trade Doctrine
by J.D. Heydon
(1971) 280). The court will not write a restraint for the
parties. The point here is, as to the Free
State, that the
restraint defined the area as the Free State, not only certain towns.
Towns are not islands that exist separately
and independently
from each other, as the applicant points out in reply. It is
normal that a restraint be defined in terms
of a province, or a
specific distance from the applicant’s business. If for
instance a restraint says business may
not be conducted in an area
100 kilometres from a certain town, the fact that the applicant has
not done business in a town, say
50 kilometres from the applicant’s
business will not cause the court to exclude that town from the
operation of the restraint.
Similarly where the area has been
defined in the contract as a province, there is no basis to exclude
certain towns from
its operation.
[12]
The main thrust of first respondent’s attack is that he was
unlawfully dismissed, and in those circumstances the applicant
cannot
rely on the restraint.
Reeves
and Another v Marfield Insurance Brokers CC and Another
[1996] ZASCA 39
;
1996 (3) SA 766
(A) dealt with a restraint in respect of an employee
(Reeves) whose services had been terminated because he refused to
sign an
agreement containing a restraint provision. After
leaving the employ Reeves immediately set about establishing a
business
of his own. Scott JA referred to the rule of English
law that wrongful dismissal puts an end to any restrictive covenant
and found that that rule does not form part of our law (at
773B-774I). In
Magna Alloys and
Research (SA) (Pty) Ltd v Ellis
(
supra
)
the Appellate Division rejected the English doctrine that a covenant
in restraint of trade is prima facie invalid. Since
then, even
after the coming into operation of the Constitution, it has
consistently been held that a party who seeks to escape
the
enforcement of restraint of trade bears the onus to show that its
enforcement will be against public interest. Similarly
the fact
that the restraint was terminated wrongfully does not put an end to
the employment contract in South Africa. In
Reeves
the Appellate Division mentions two factors which would influence the
court not to enforce a restraint, namely where the wrongful
termination is fraudulent, e.g. where the employee was hired with the
sole object of imposing a restraint upon him, or where the
employer
acts in bad faith (at 775C-D). In the
Reeves
-case
the court analysed the restraint clause before it, and stressed the
importance of the words “ceases to be employed”
as
indicating an intention to operate once the employment relationship
no longer exists, and found that the words “for any
reason
whatsoever” make it clear that the circumstances underlying the
cause of termination are irrelevant to the operation
of the restraint
provisions (at 771J-772B). In the restraint under consideration
in this case, the wording is “after
termination of my
employment with the company, for whatsoever reason”. There
is no indication that wrongful termination
is excluded. In this
case it is under dispute whether the termination was wrongful. There
is no indication in the award
whether the first respondent informed
the Arbitrator at the CCMA of his restraint, which indicates that the
restraint was irrelevant
when the applicant terminated first
respondent’s employ. There is no suggestion that the
applicant acted fraudulently
or
mala
fide
in terminating the employment,
i.e. with a specific view to the enforcement of the restraint.
[14]
There is no reason why the restraint as prayed for in the notice of
motion should not be enforced.
[15]
ORDER
1. An order is granted in terms of
paragraphs 1 to 5 of the Notice of Motion.
2. The first respondent is ordered to pay the costs of
this application.
A.
KRUGER,
J
On
behalf of the applicant: Adv. M.C. Louw
Instructed by:
Hugo & Bruwer Attorneys
BLOEMFONTEIN
On
behalf of the first respondent: Adv. C. D. Pienaar
Instructed by:
Hugget Hendriks Inc.
BLOEMFONTEIN