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2024
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[2024] ZALCJHB 29
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MPU Communications (Pty) Ltd v Griffiths and Others (J 1633/23) [2024] ZALCJHB 29 (7 February 2024)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
No: J 1633/23
In
the matter between:
MPU
COMMUNICATIONS (PTY) LTD
Applicant
And
GRIFFITHS
DARLY GRAHAME
First Respondent
JANTJIES
CHARLES ISAAC
Second Respondent
COOMBE-HEATH
CAROLINE
Third Respondent
RYLE
LUKE RICHARD
Fourth Respondent
OCTOPI
SMART SOLUTIONS (PTY)
Fifth Respondent
Heard:
25 January 2024
Delivered:
This judgment was handed down electronically by circulation to the
parties' legal representatives by
email and publication on the Labour
Court’s website. The date for hand-down is deemed to be on
7 February 2024.
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction
:
[1]
The applicant approached this Court seeking the enforcement of the
restraint of trade agreement and confidentiality undertakings
against
the first – fourth respondents. The applicant further sought to
interdict and restrain the fifth respondent from
unlawfully competing
with it and moreover, for the first respondent to return to the
applicant all proprietary information, documents,
records, client
lists, price lists, and suppliers’ information.
[2]
The application is opposed by the second respondent, who did not
seriously challenge the urgency of the application. The Court
will
exercise its discretion and accordingly treat the matter as urgent.
At the commencement of the proceedings, the parties handed
in copies
of settlement agreements in respect of the dispute between the
applicant, the first, fourth and fifth respondents. These
settlement
agreements are made orders of the Court in accordance with the
parties’ request.
[3]
The third respondent did not file any answering affidavit nor did she
make an appearance in these proceedings. The applicant accordingly
sought an order in her absence.
Background
:
[4]
The applicant as its name suggest is in the
business of communications. Its business constitutes the provision of
products and services
comprising of the supply of IOT (
Internet
of Things)
and technology solutions,
inter
alia
; internet connectivity, cloud
solutions, managed IT services, network security and surveillance.
[5]
The applicant and the second respondent entered
into contract of employment on 16 September 2021. The second
respondent commenced
his employment with effect from 1 October 2021
as a National Channel Manager at the applicant’s Gauteng
Branch. It is not
in dispute that the second respondent bound himself
to restraint of trade and other undertakings as per his
contract of employment.
[6]
In accordance with the restraint provisions, which
are typical of such provisions as pertaining to proprietary interests
(Customer
and potential customer connections and secret and
confidential information), the second respondent had
inter
alia
agreed and acknowledged that
during his employment, he would become ‘privileged’ to
the applicant’s confidential
information which shall not be
divulged to any unauthorised persons or bodies relating to any aspect
of his work or to any operations
or processes of the applicant and
not to be employed directly or indirectly by any company, persons or
entity involved in the marketing
of the applicant’s specific or
related products. He had further acknowledged that by his association
with the applicant he
will have access to the applicant’s trade
secrets, proprietary and confidential information.
[7]
The restrained provisions were to endure for a
period of 12 months from the date of termination of the employment
contract, and
within a radius of 100 kilometre from the branch at
which he was employed. They were further to remain binding
irrespective of
how the termination of the employment came about. In
acknowledgement of these restraint provisions and undertakings, and
for his
willingness to be bound by them, an extra amount of R1000.00
was added to his total monthly costs to the company.
[8]
It is
further not in dispute that the first – fourth respondents were
informed on 15 August 2023 of possible retrenchment
in terms of
section 189 of the Labour Relations Act
[1]
(LRA), and notices in this regard were issued on 31 August 2023. On
19 September 2023 they were formally informed of
the
retrenchments and offered packages, which they had accepted. The
second respondent’s last date of service was on 29 September
2023, despite serving his notice in October 2023.
[9]
On 19 October 2023, the applicant’s
attorneys of record sent correspondence to the second and third
respondents requesting
certain undertakings including adhering to the
terms and conditions of the Restraint of Trade and Non-Disclosure
Agreements. They
were essentially requested to make undertakings that
they shall not contact, solicit, or engage with any of the
applicant’s
customers or suppliers; not divulge its private,
confidential, and proprietary information for their own gain of that
or third
parties; and that they should return all proprietary
information in whatever form in their possession. No such
undertakings were
given hence the application before the Court.
Condonation for the
late filing of the answering affidavit:
[10]
The applicant’s contention was that the
second respondent’s answering affidavit was not properly before
the Court as
it was filed and served outside of the set time limits.
This application was served on the second respondent on 23 November
2023.
The applicant enrolled the matter for 25 January 2024. The
second respondent was required to file the answering affidavit on no
later than 29 November 2023. He had only filed his notice of
intention to oppose on 14 December 2023, followed by his answering
affidavit on 10 January 2023.
[11]
The applicant in the answering affidavit to the
main application had sought condonation and explained that the delay
was because
of belonging to Legalwise, which had to go through its
own internal processes in deciding whether to assist him. He further
attributed
the delay to the fact that when the application was
served, it was at the time that Legalwise’s panel of attorneys
were winding
up for the year end, and it took time before his current
attorneys of record could assist him.
[12]
The
applicant contends that the second respondent’s explanation is
insufficient and does not demonstrate good cause. The principles
applicable to condonation applications need no introduction and are
as set out in
Melane
v Santam Insurance Co. Ltd
[2]
.
Thus,
it is required of an applicant to demonstrate
good
cause
why
condonation should be granted. The court in the exercise of its
discretion in this regard will consider all the relevant facts
including, the degree of lateness, the explanation therefor,
prospects of success and the importance of the case. These factors
are interrelated but not individually decisive and must be weighed
against each other. Of crucial importance when considering the
relevant factors, is whether in the end, the interests of justice
requires that condonation be granted or refused
[3]
.
[13]
Inasmuch as the applicant’s explanation is
scant on details and clearly fails to account for each period of the
delays, the
Court accepts that in view of the timing of the service
of the application, and the enrolment of the matter on 25 January
2024,
clearly a delay of about ten days inclusive of the holidays
during the festive season is not excessive. Furthermore, the
applicant
cannot speak of any prejudice given the timelines it had
set.
[14]
It is
trite that a restraint of trade provision invariably entails a
curtailment of an individual’s rights under
section
22
[4]
of the Constitution of
the Republic
[5]
,
whilst at the same time it seeks to protect the proprietary interests
of an employer. These are however matters that clearly requires
that
individuals whose rights are affected be afforded a say as to whether
this Court should countenance such curtailment. The
applicant
notwithstanding the inadequate explanation, was without employment at
the time that the application was served, and had
to rely on
Legalwise. This was at the time that attorneys like all industries
were winding up for the festive season hence only
a notice of
intention to oppose was filed at the time. Given the circumstances of
this case, the length of the delay and explanation
proffered in that
regard, and the second respondent’s constitutional rights which
are central to this application, clearly
the interests of justice in
these circumstances dictate that condonation be granted.
The merits and the
legal framework in restraint of trade disputes:
[15]
The
applicant seeks a final interdict.
The
requirements
[6]
to be met are
first, there must be a clear right on the part of the applicant. This
means that the applicant must prove on a balance
of probabilities the
right which it seeks to protect. To the extent that there may be any
factual disputes arising from the papers,
these must be resolved in
terms of the
Plascon-Evans
[7]
rule.
The
second requirement to be met is that there is
an
injury actually committed or reasonably apprehended. The third is
that there must be no other satisfactory remedy available to
the
applicant.
[16]
The principles applicable
to restraint of trade agreements are fairly trite. Such agreements
are generally enforceable unless they
are unreasonable or unlawful.
It is therefore for the applicant in this case to not only establish
the existence of the contract
sought to be invoked, but to also prove
the breach of thereof. Once the existence of a contract and its
breach is proven, it will
then be upon the second respondent to
demonstrate
on
a balance of probabilities that the restraint agreement is
unenforceable because it is unreasonable, unlawful and against public
policy.
[8]
[17]
The
purpose of enforcing restraint provisions as
re-stated
in
Sibex
[9]
is to protect an employer’s protectable proprietary interests.
It follows from the authorities that in deciding whether a
restraint
of trade agreement ought to be enforced, the Court must strike a
balance between the sanctity of a contract, and the
freedom of the
ex-employee's ability and right to trade his or her labour,
occupation, and professional skills as protected under
section 22 of
the Constitution. In line with the principles set out in
Basson
v Chilwan and Others
[10]
,
the Court must therefore determine
whether
the party seeking to enforce the restraint provisions has some
protectable interest and
whether
such interest if it exists, is being prejudiced by the other party.
If so, the Court must then determine whether the interest
so weigh up
qualitatively and quantitatively against the interest of the latter
party that the latter should not be economically
inactive and
unproductive. Furthermore, the Court must determine if
there
are public policy considerations that support the enforcement of the
restraint. Of equal relevance is
the
duration of the restraint, the reasons for the restraint, the
geographical area to which the restraint applies, and
whether
the restraint goes further than is necessary to protect the interests
claimed
[11]
.
The
submissions and evaluation:
[18]
The starting point in determining whether the applicant is entitled
to the relief it seeks is that in its prayer 2.1
of the Notice of
Motion, an order was sought for the second respondent to be
restrained from being employed by any entity in the
same or similar
industry within a radius of 100 kilometres from all of its offices,
inclusive of Gauteng, Mbombela and Middleburg.
[19]
What the applicant sought
with the above prayer is not in sync with the restraint provisions as
applicable to the second respondent
[12]
.
In this regard, Clause 18.2 of the restraint provisions reads as
follows;
‘
It
is an agreed condition of employment that the clientele serviced by
the company or its associated companies or divisions is a
direct
result of the efforts of the company. It would therefore be
considered not unreasonable and binding upon you to undertake
that,
in the event of you leaving the employ of the company for whatsoever
reason, not to be employed directly or indirectly by
any company,
close corporation, or organization, or entity, or persons involved in
the marketing of our specific or related products
for a period of 12
months from the date of your departure from the company. This
restriction applies to a 100(hundred) kilometer
radius from the
branch at which you are employed at the time of your resignation or
at the time of the termination of your employment
with the company
for any reason whatsoever. The above restriction applies no matter
how the termination of your employment might
come about (Sic).’
[20]
Clearly the geographical area which the applicant sought to have the
restraint provisions applied
goes further than the
terms of the contract. The second respondent
was employed in
the Centurion branch of the applicant at the date of retrenchment,
and the restriction applied to 100 kilometres
from a branch at which
he was employed. To therefore seek to have the geographical area or
radius extended to Mbombela and Middleburg
in the Mpumalanga Province
is not only unreasonable but unlawful.
[21]
The applicant correctly conceded to this anomaly in its prayer 2.1 of
the Notice of Motion, and pointed out that the
scope ought to be
limited to 100 kilometres radius from Centurion in Gauteng.
Nonetheless, it was pointed out on behalf of the
second respondent
that the applicant cannot simply make such a concession without first
having sought an amendment to the Notice
of Motion.
Is
there a breach of the restraint provisions?
[22]
The validity and enforceability of the restraint provisions was not
in dispute. The only issue in this case is whether
there was a breach
of the restraint provisions by the second respondent. At the onset,
there is no allegation or evidence that
the second respondent is or
was ever employed by the fifth respondent, whom the applicant avers
is a competitor. The applicant
as summarised below, contends that the
second respondent obtained, divulged and shared its confidential
information with the fifth
respondent, and also solicited or
contacted its clients or prospective customers.
[23]
In
White
River Marketing (Pty) Ltd and Another v Rothwell and Another
[13]
, it
was held that;
"As
for the merits, in the case of a former employer seeking to enforce a
restraint against a former employee, the onus is
first proving the
existence of a restraint obligation that applies to the former
employee. Second, and if a restraint obligation
is shown to exist,
the employer must prove that the former employee acted in breach
of the restraint obligation imposed by
the restraint. Once the breach
is shown to exist, the determination turns to whether the facts,
considered as a whole, show that
the enforcement of the restraint
would be reasonable in the circumstances."
[24]
From the above authority, if the applicant cannot surmount the second
leg of the enquiry, i.e., demonstrate a breach
of the restraint
obligations, it follows that ordinarily, it would not be entitled to
any relief. Furthermore, and to the extent
that the restraint
obligations exist, if there is no breach proven, it would not even be
necessary for the court to determine the
reasonableness of those
provisions, unless of course as in this case, the applicant sought
prohibitions that went beyond those
provisions.
[25]
The alleged breach according to the applicant, occurred or was
discovered after the termination of the services of the
first - third
respondents. This was after they had returned their work- issued
laptops. The applicant’s Mr Putter had reviewed
and examined
the laptops, and had discovered that between 6 September 2023 and 8
October 2023, there was an exchange of emails
between the first,
second, third, fifth respondents, and the applicant prospective
client (Go Touch Down Resorts-Seasons CC (‘GTD’)).
The
applicant contends that the fifth respondent as its competitor in the
same business, has every intention of soliciting its
current and
prospective customers, and in the process, obtain its proprietary
confidential information.
[26]
The exchange of emails by the second and third respondent was either
through the work email or through their private
Gmail addresses. The
exchange involved requests by the second respondent to GTD to provide
various documentation of a confidential
nature including credit
application forms; monthly bank statements, bank confirmation
letters, quotations, applicant’s breakdown
of internal price
list, resolutions, ID copies and other related information, to which
GTD had responded to and provided such information.
A further
examination of the emails from the returned laptops had revealed that
on 8 October 2023, the second respondent sent an
email from his
private Gmail address to the first respondent’s private email
containing confidential information of another
of the applicant’s
prospective clients, ‘Aristocraft’, including an order
form on the applicant’s letter
head and a quote dated 16
February 2023.
[27]
In the light of the above revelations, the applicant had on 19 and 20
October 2023, addressed correspondence to the second
– third
respondents seeking undertakings that they would abide by the terms
and conditions of the restraint provisions, and
in that regard, not
contact, solicit or engage with any of its customers or suppliers;
not divulge its private, confidential and
proprietary information;
and to return all forms of proprietary information in their
possession. As already indicated, the individual
respondents
concerned refused to give such undertaking.
[28]
The second respondent in his answering affidavit in disputing the
allegations and the relief sought against him averred
that;
28.1 Upon being
notified of the retrenchment, his last day of employment was on 29
September 2023, and he was no required
to render his services whilst
serving the notice period in October 2023. During the section 189 of
the LRA consultations, he and
others were informed that they could
conclude or finalise any outstanding transactions during October
whilst serving their notice
period, and further that they would be
entitled to a commission earned on the deals that were concluded
during the notice period.
On 29 September 2023, he had returned the
work-issued laptop and had thereafter no access to the applicant’s
network.
28.2
He averred that when his
services were terminated, he had provided the applicant with his
private email for the purposes of forwarding
any of his personal
communication. He contended that his private email was password
protected, but that after he had returned the
laptop, the applicant
had ‘hacked’ his private emails from its laptop without
his password, and had retrieved his personal
emails that were sent to
his own personal laptop. The second respondent viewed the applicant’s
conduct as having breached
his constitutional right to privacy and
thus having acted unlawfully in breach of the provisions of the
Electronic Communications
and Transactions Act
[14]
.
28.3 To the extent
that the applicant sought that he be interdicted and restrained from
being employed or conduct any business
similar to that of it, the
second respondent contended that clause 18.1 or 18.2 of the contract
did not make any such provisions.
Clause 18.2 only referred to
prohibition of employment directly or indirectly by any entity or
person involved in the marketing
of the applicant’s specific or
related products. In any event, he denied that he was currently
engaged in any business similar
to that of the applicant with any
person or entity which is an existing client of the applicant. He
further disputed that the applicant
had demonstrated that it had
intellectual property rights to any specific product or related
product that it offers to its customers,
and that the solutions and
products it offered to customers were based on freely available
technology products developed by other
information technology and
software companies.
28.4 He contended
that as a Microsoft Certified Professional Systems Engineer, he was a
solutions architect that created a
safe and secured local area
network where every user and equipment could talk to each other
without interruptions. He averred that
there was therefore no
specific product that was developed by the applicant for him to be
barred from making a living.
28.5 He denied
having breached any confidentiality or restraint obligations by
colluding with the first applicant, and/or
having furnished any
customer information pertaining to GDT to the fifth respondent. He
conceded that he had contact with GTD prior
to the termination of his
services. This was as a result of GTD having initially approached him
in 2022 in order to purchase a
product from the applicant. GTD at the
time did not accept a quotation that was given to it.
28.6 GTD then
approached him again in September 2023 to consider whether it would
qualify to obtain a product from the applicant,
but had indicated
that it was not in a position to consider financing from the bank. It
instead sought financing from the applicant.
He then had engagements
with the first respondent about GTD, as he was his supervisor during
their employment, who had informed
him that the applicant would not
provide GTD with financing it sought.
28.7 When GTD
approached him in September 2023, it was aware of his impending
departure and was concerned that its deal would
not be finalised
before then, hence it constantly contacted him. After he had left the
applicant’s services and whilst still
serving notice, he had
continued to follow up on the GTD deal with the applicant’s Du
Plessis and Putter because having worked
hard on the deal, he wanted
to ensure its finalisation since as per the agreement with the
applicant during the consultation process,
he would have been
entitled to earn a commission on the deal concluded during the notice
period for the month of October 2023.
28.8 He averred
that since the applicant was not assisting GTD with financing, the
first respondent had then suggested that
such financing could be
sourced from another company, and he (first respondent) had engaged
with the fifth respondent to establish
if it could not assist GTD,
and had therefore sent all documentation pertaining to GTD to it
(fifth respondent). The deal however
did not fall through as neither
the applicant nor the fifth respondent could provide GTD with
financing.
28.9 In respect of
another prospective client, ‘Aristocraft’, the second
respondent averred that this entity was
previously provided with a
quotation by the applicant in 2022 in respect of a product which it
did not accept at the time. The
first respondent had then contacted
him in September 2023 and advised him that Aristocraft had contacted
him with the same enquiry
and had requested him to furnish him with
the documents that Aristocraft had originally sent. This was in
October during the notice
period and there was nothing that prevented
him from concluding any deals and earning commission. The second
respondent however
did not know the outcome of the engagement between
the first respondent and Aristocraft.
[29]
In the light of the above, the second respondent denied that he had
divulged any
confidential information to any person or entity. He
conceded that he had only exchanged information with the first
respondent
in respect of GTD and Aristocraft at the time as his
supervisor and with whom he worked closely in providing solutions to
clients.
He further denied that he had approached any of the
applicant’s customers or clients, or conducted any business or
provided
quotations to them.
[30]
In the light of the parties’ averments, what can be discerned
is that other than reliance by the applicant on the emails
it had
retrieved after the termination of the second respondent had taken
effect;
30.1
There
is no evidence to suggest that the second respondent has acted in any
manner and in competition with the applicant;
or that he is since
engaged in any business similar to that of the applicant, let alone
is he
involved in the marketing of the applicant’s
specific or related products with any person or entity.
30.2
The difficulty with the applicant’s case is
that it sought to shift the onus of proving that the second
respondent had breached
the restraint provisions to the extent that
it submitted that he should have in his answering affidavit,
disclosed who his current
employer was, and the nature of his job
description currently.
30.3
The reality is that it is not for the second
respondent to prove the applicant’s case. It is for the
applicant to provide
proof of any breach.
Conjecture
and mere blanket allegations of a breach are not sufficient. It is
not for the second respondent in any event, to remove
any uncertainty
about whether he is in breach or not as the applicant seems to
suggest.
30.4
To the extent that reliance of the alleged breach
is placed on the email exchanges between the first, second, fifth
respondents
and the prospective clients being GDT and Aristocraft, I
did not understand the applicant’s case to be that it denied
that
these exchanges took place at least into October 2023 when the
second respondent was serving his notice period. I further did not
understand it to be denied that the second respondent was permitted
to finalise any deals during the notice period in order to
gain a
commission. Equally so, it is not in dispute that the second
respondent reported to the first respondent, who had suggested
that
the fifth respondent be approached with the GTD deal, to enquire if
it may assist since the applicant could not do so.
30.5
The
second respondent had conceded that any information regarding
Aristocraft was provided to the first respondent upon the latter’s
request. The second respondent played no further part in the matter
thereafter.
30.6
All that is being said with the above email
exchange, is that there is nothing that can be read into it that
suggest anything untoward
on the part of the second respondent,
particularly since the second respondent and others were allowed to
at least until the end
of October 2023 when the notice period ended,
finalise any outstanding deals so that they can earn a commission.
30.7
The second respondent insisted that the
information obtained from his private email was ‘hacked’
and thus illegally
obtained. Significant with these allegations is
that if the applicant was up to something nefarious, he would not
have voluntarily
informed the applicant of his private email when he
left its services. Furthermore, Putter, who had allegedly accessed
these emails
after the laptops were returned, did not depose to an
affidavit to explain how he had obtained access to the second
respondent’s
own private email when it was password protected.
I will refrain from making any determination as to the legality and
admissibility
of the retrieved emails from the second respondent’s
private email address, in view of the conclusions already made
insofar
as a breach of the restraint provisions was alleged based on
those emails.
30.8
Bearing the above in mind, it however needs to be
stated that beyond the information obtained from the second
respondent’s
private emails and after he had served his notice
period at the end of October 2023, there is nothing further that
suggests that
he had
took possession from the applicant or
used to its prejudice,
its
trade secrets,
confidential information, or connections.
30.9
At paragraphs 32-34 of the answering affidavit, the second respondent
averred
inter alia
that the solutions and products that are
offered to the applicant’s customers were based on freely
available technology products
developed by other information
technology and software companies. He had averred that there was no
specific product that was developed
by the applicant, and thus there
was no basis for the order sought to bar him from making a living.
30.10
One
would have expected the applicant to have in its reply, rebutted the
second respondent’s contentions to demonstrate
the basis upon
which it lay claim to any know-how, processes or techniques. This was
not done as can be gleaned from paragraphs
11 – 14 of the
replying affidavit.
30.11
Against
the lack of any meaningful response in the replying affidavit in this
regard, it ought to be concluded that
t
he
applicant has in effect, not demonstrated in reasonably clear terms
that the information, know-how, technology or methods over
which it
alleged ownership, or allegedly in the second respondent’s
possession, or even seeks to protect, is something which
is unique
and peculiar to it, and is not public property or public
knowledge
[15]
.
30.12
Further given the nature of the industry the applicant operates in
and the second respondent’s own qualifications and skills,
there is nothing that suggests that the second respondent is in
possession of
any
trade secrets and
confidential information justifying protection by the restraint
.
30.13
Worst still however for the purposes of its relief in this case, the
applicant has not demonstrated that the second respondent
in effect
breached the restraint of trade provisions as alleged, and this
therefore ought to bring an end to the matter without
the necessity
to determine further the reasonableness or otherwise of the restraint
provisions.
[31]
Other than the conclusions made in regards to the allegations of
breach, it appears that based on the emails exchange as already
dealt
with in this judgment, the applicant sought an undertaking from the
second respondent, and when this was not forthcoming,
it launched
this application. Inasmuch as it is appreciated that the applicant
was entitled to approach the Court for relief, it
is however not for
this Court to merely interdict and restrain employees who refused to
make any further undertakings beyond what
the contract provides, and
in circumstances where there is no discernible evidence that they
have acted in breach of their restraint
obligations. In my view if a
restraint provision as in this case remains extant, an employer
cannot simply approach the Court because
an employee refuses to give
an undertaking, unless of course in addition, it has demonstrated
that there is a breach.
[32]
It is trite that
employees are entitled to use their skill and training to practice
their trade, as long as they are not in breach
of their restraint
obligations, or where it is found that such provisions are
unreasonable. It has been said that employees cannot
be prevented
from using their stock of general knowledge, skill, and experience to
earn a living
[16]
. It is
against all of the above that it is reiterated that granting the
relief that the applicant seeks based on its pleaded case
would be
untenable. In the end, the applicant has not in the absence of
establishing a breach of the restraint provisions, satisfied
the
requirements of the final relief it seeks. It follows that the
application ought to be dismissed.
[33] Costs
in this Court are ordinarily considered having had regard to the
requirements of law and fairness. The application
and the dispute
before the Court being contractual, the provisions of section 162 of
the LRA find no application, and ordinarily,
costs should follow the
results. Having however had regard to the facts and circumstances of
this case, it is my view that each
party must be burdened with its
own costs.
[34]
In the premises, the following order is made kin conjunction with the
settlement agreements already referred to in paragraph
2 of this
judgment:
Order:
1. In the matter
between the Applicant and the First Respondent, the settlement
agreement handed in Court, marked as
annexure “A”,
is made an order of the Court
.
2. In the matter
between the Applicant and the Second Respondent, the following order
is made:
2.1 This matter is
heard as one of urgency as provided for in terms of Labour Court Rule
8 and the Applicant’s failure
to comply with the normal time
periods, forms and service as provided for in Labour Court Rule 7, is
condoned.
2.2 The late filing
of the second respondent’s answering affidavit is condoned.
2.3 The applicant’s
application is dismissed.
2.4 Each party is to
pay its own costs.
3.
In the matter between the Applicant and the Third Respondent, and in
the absence of opposition to the relief sought, the
following order
is made:
31 The matter is
heard as one of urgency as provided for in terms of Labour Court Rule
8 and the Applicant’s failure
to comply with the normal time
periods, forms and service as provided for in Labour Court Rule 7, is
condoned.
3.2 The Third
Respondent is interdicted and restrained for a period of one year
from date of this order from: -
3.2.1 Within a
radius of 100-kilometre from the Applicant’s Gauteng office, to
be employed by an entity in the same
or similar industry as the
Applicant,
3.2.2 Within a
radius of 100-kilometre from the Applicant’s Gauteng office, to
do any business similar to that of the
Applicant, with a person or
entity which is an existing client of the Applicant’
3.3 The Third
Respondent is ordered to comply with every provision in respect of
the confidentiality and restraint obligations
agreed to between her
and the Applicant.
3.4 The Third
Respondent is prohibited from divulging to any other person or
entity, the Applicant’s confidential information,
including,
but not limited to know – how, processes and techniques
utilised by the Applicant in the provision of its s.ervices,
involving,
inter alia
:
i.The Applicant’s
customer information, contact details and requirements. In this
regard, the names of existing customers
and their requirements, who
require additional services which are offered by the Applicant and in
respect of which, such existing
customers, are therefore also
potential customers;
ii.The names of other
prospective customers and their requirements;
iii.The Applicant’s
Agreements with Customer’s;
iv.Details of the
Applicant's financial structure and operating results;
v.The Applicant's pricing
and discount structures which includes the financial details of the
customers, including credit and discount
terms, which the Applicant
provides to its customers.
vi.The Applicant’s
customer transaction histories;
vii.The Applicant's risk
analysis;
viii.The Applicant's
profit margins;
ix.The Contractual
arrangements between the Applicant and its suppliers and/or business
associates;
x.The Financial details
of the Applicant’s relationship with its suppliers and/or
business associates;
xi.Details of the
Applicant's product development;
xii.Details of the
Applicant's current and prospective products;
xiii.Knowledge of the
Applicant’s strategic plans;
xiv.Details of the
Applicant's current and prospective products;
xv.Details of the
remuneration paid by the Applicant to its employees as well as their
duties;
xvi.Other matters which
relate to the business of the Applicant and in respect of which,
information is not readily available in
the ordinary course of
business to a competitor of the Applicant; and
xvii.Any other
information which could be damaging to the Applicant’s
operations, or which could benefit other parties to
the detriment of
the Applicant.
3.5 Insofar as the
Third Respondent has already approached any of the Applicant’s
customers, and/or clients and conducted
any business or provided any
quotations to them, she is interdicted and restrained from conducting
any further business with them.
3.6 There is no
order as to costs.
4.
In the matter between the Applicant, the Fourth and Fifth
Respondents, the settlement agreements respectively marked as
annexures “B” and “C
”, are made orders
of the Court
.
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
P.S.A.J. Jacobsz, van Der Nes
Incorporated.
For
the Second Respondent
B.Z. Bobson-Opoku,
instructed
by
A.J. Venter and Associates Incorporated.
For
the Fourth to Fifth Respondents: S.
Munro-Flint, of Munro-Flint Attorneys.
[1]
Act 66 of 1995, as amended.
[2]
1962
(4) SA 531
(A) at 532B – E.
[3]
See
Grootboom
v National Prosecuting Authority
[2013]
ZACC 37
;
2014 (2) SA 68
(CC);
2014 (1) BCLR 65
(CC) at paras
22-3 and 51.
[4]
The Constitution of the Republic of South Africa, 1996.
[5]
See
also
Labournet
(Pty) Ltd v Jankielsohn and Another
(2017)
38 ILJ 1302 (LAC) at para 40 – 4;
Yovanka
Torrente & others v Grant Monaghan and Associates Incorporated
(Reportable Case No: JA
45/23 & JA 25/23, delivered on 23 January 2024) at para 21 where
it was held;
‘
In
general, a Court which is required to evaluate a restraint of trade
agreement has also to engage with the reasonableness of
the
restraint. It is now trite law to note that this enquiry is a value
judgment which involves a consideration of a public interest
which
requires that parties to a contract should comply with their
contractual obligations (
pacta
sunt servanda
)
and the principle reinforced in s 22 of the Constitution of the
Republic of South Africa, 1996, namely that every citizen has
a
right to choose their trade, occupation or profession freely. As
stated by this Court in
Ball
v Bambalela Bolts (Pty) Ltd and another
,
a Court seeks to achieve a balance between the respective
gravitational pull of
pacta
sunt servanda
and
s 22 of the Constitution by carefully examining the nature of the
activity prevented by the relevant clause, the area of operation
of
the restraint, and the overall balance of the competing interest
between the parties.’
[6]
Setlogelo
v Setlogelo
1914
AD 221
at 227.
[7]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
3 SA 623
(A) at 634E-G.
[8]
See
Experian
South Africa (Pty) Ltd v Haynes and another
2013
(1) SA 135
(GSJ);
Reddy
v Siemens Telecommunications (Pty) Ltd
2007
(2) SA 486
(SCA);
Sibex
Engineering Services (Pty) Ltd v Van Wyk and Another
1991
(2) SA 482
(T) at 502 J – 503 B
;
See
Headnote in
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis 1984(4) SA 874 (A)
where the following is
stated:
“
The
approach, followed in many South African judgments, that a covenant
in restraint of trade is
prima
facie
invalid or unenforceable stems from English law and not our common
law, which contains no rule to that effect. The position in
our law
is that each agreement should be examined with regard to its own
circumstances to ascertain whether the enforcement of
the agreement
would be contrary to public policy, in which case it would be
unenforceable. Although public policy requires that
agreements
freely entered into should be honoured, it also requires, generally,
that everyone should be free to seek fulfilment
in the business and
professional world. An unreasonable restriction of a person's
freedom of trade would probably also be contrary
to public policy,
should it be enforced.
Acceptance
of public policy as the criterion means that, when a party alleges
that he is not bound by a restrictive condition
to which he had
agreed, he bears the
onus
of proving that the enforcement of
the condition would be contrary to public policy. The Court would
have to have regard to the
circumstances obtaining at the time when
it is asked to enforce the restriction. In addition, the Court would
not be limited
to a finding in regard to the agreement as a whole,
but would be entitled to declare the agreement partially enforceable
or unenforceable.”
[9]
Supra
f(n)
3.
[10]
1993 [3] SA 742 (A) at 767 C-H.
[11]
See also
Kwik
Kopy (SA) (Pty) Ltd v van Haarlem and Another
1999
(1) SA 472
(W) at 484E.
[12]
At
page 115 of the Applicant’s bundle of pleadings.
[13]
2022 JDR 1186 (GJ) at para 7.
[14]
Act
25 of 2002.
[15]
See
Hirt
& Carter (Pty) Ltd v Mansfield & another
2008(3) SA 512 (D);
(2008) 29 ILJ 1075 (D); [2007] 4 AII SA 1423 (D) at para 57.
[16]
Bonnet
& another v Schofield
1989
(2) SA 156
(D))