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[2010] ZALCJHB 354
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Gammatek (Pty) Ltd v Lyttle (J1403/10) [2010] ZALCJHB 354 (11 July 2010)
Not
reportable
Delivered
11 July 2010
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT BRAAMFONTEIN
CASE
NO: J 1403/10
In
the matter between:
GAMMATEK
(PTY) LTD
APPLICANT
and
LYTTLE,
PATRICK
RESPONDENT
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
This is an application to interdict the respondent from competing
with the business of the applicant for a period of two years,
calculated from 31 May 2010, in terms of a confidentiality and
restraint of trade agreement. In terms of a revised notice of motion,
the interdict is sought only in respect the business of the generic
aftermarket cellular telephone accessories product range in
the
cellular industry.
Factual
background
[2]
The relevant facts are largely common cause. While this was not
disclosed in the founding affidavit, on 26 February 2008, the
respondent signed a fixed term contract in terms of which he was
employed by the applicant from 1 March 2008 to 31 August 2008,
as a
sales manager. In terms of the agreement, the respondent was to be
employed only for the fixed term, on termination of which
the
respondent’s employment would be considered to have terminated
by mutual consent. The deponent to the founding affidavit
avers that
in at some time subsequent to 31 August 2008, the respondent signed a
confidentiality and restraint agreement. In the
replying affidavit,
the deponent concedes that the use of the word “subsequently”
was a typographical error, and acknowledges
the existence of the
fixed term contract and that the restraint agreement was signed on 28
February 2008. Be that as it may, in
terms of the agreement, the
respondent agreed
inter alia
not to be interested in any
business within South Africa and its neighbouring states that was in
any way in competition with the
applicant, or that comprised a
business similar to that of the applicant. The period of the
restraint was two years, to be calculated
from “the date of
termination of this agreement for any cause or reason whatsoever”.
[3]
On 31 August 2008, the respondent signed a letter of appointment in
terms of which he was appointed as a sales manager, on an
indefinite
basis. Clause 6 of the latter reads as follows:
“
Restraint of
Trade & Confidentiality
Due to your position
within the company, you are required to sign the restraint of trade
contract that is presented to you with
your letter of appointment
”.
It
is common cause that no restraint of trade agreement was presented to
the respondent when he signed the letter of appointment.
The
respondent resigned on 6 May 2010, giving notice to expire on 31 May
2010.
[4]
On 21 June 2010, Vodacom held a supplier’s day conference,
attended by the general manager of the applicant, one Van der
Merwe,
and the respondent. The applicant contends that in a conversation
with the respondent, Van der Merwe was told that the respondent
was
attending the conference on behalf of a friend, who had bought an
interest in European Telecom Africa (ETA). After further
investigation, the applicant confirmed that the respondent had an
interest in ETA within the definition contained in the restraint
agreement, and considered that the respondent was in breach of the
agreement. On 14 July 2010, it filed this application.
The
issues
[5]
The applicant contends that the agreement signed on 28 February 2008
was not linked to the fixed term contract, that it was
in fact the
agreement contemplated by clause 6 of the contract signed on 31
August 2008, and that it remains enforceable. The respondent
admits
that the restraint agreement relates to the fixed term period of
employment, but contends that it has no application to
the offer of
employment accepted on 31 August 2008. The parties’ respective
positions beg the question of whether the restraint
agreement is
capable of application at all, and whether in these circumstances,
the applicant has established a clear right to
the relief that it
seeks. Clause 2.4 of the restraint agreement (which on the face
of it stands independently of any contract
of employment signed by
the respondent) reads as follows:
Each and every
restraint in this entire clause shall operate and be valid and
binding for a period of 2 (two) years calculated from
the date of
termination
of this agreement
for any cause or reason
whatsoever
(my emphasis)
.”
[6]
The observation that immediately springs to mind is that the
restraints established by clause 2 are to be triggered by the
termination of the restraint agreement and not by the termination of
the respondent’s employment by the applicant. The phrase
was
presumably intended to refer to the termination of any underlying
contract of employment. Indeed, in these proceedings, the
applicant
seeks to enforce the restraint agreement for the period of two years
following the respondent’s resignation, and
contends that the
restraint remains operative and binding from that date. The distinct
impression to be gleaned from the wording
of the agreement and clause
2.4 in particular is that the ‘cut and paste’ function on
the word processing package was
liberally used by the drafter, and
that the clause was drawn from an employment contract. But the
applicant must live with the
ordinary grammatical meaning of the
wording in the clause, even it is the result of a ‘cut and
paste’ command too far.
The applicant has certainly not
established, as it contends in its heads of argument, that
clause 2.4 refers to any of the
respondent’s employment
contracts and that it is triggered by their termination; there is
simply nothing on the papers before
me on which such an intention by
the parties can be fathomed. In short, the restraint agreement,
divorced at it is from any termination
of the respondent’s
employment, is meaningless.
[7]
Even if clause 2.4 of the restraint agreement were to be capable of
rescue on the basis that it was triggered on a termination
of one or
another of the respondent’s employment contracts, there is no
evidence before me to suggest that the clause survived
the
termination of the fixed term contract on 31 August 2008. The terms
of the fixed term contract are such that the applicant
clearly wished
to ensure that the contract would come to an end on 31 August,
without there being any prospect of any renewal on
the same terms. In
these circumstances, the contract of employment entered into on 31
August 2008, and effective from 1 September
2008, established an
entirely new contractual regime between the parties. In my view, to
the extent that the restraint agreement
may have been incorporated
into the fixed term contract, the former terminated with the latter.
This interpretation is supported
by the terms of the offer of
employment signed by the respondent on 31 August 2008. Paragraph 6 of
the offer, it will be recalled,
refers to a restraint to be presented
for signature. None was ever presented, and there is no indication
from the wording of any
of the agreements between the parties that
the restraint was applicable for so long as the respondent was
employed by the applicant,
on whatever basis. On this reading of the
restraint agreement, the restraints were triggered on the termination
of the fixed term
contract on 31 August 2008, and would expire on 31
August 2010. Given that this is an urgent application to enforce the
restraint,
the fact that it has a month to run militates against the
granting of the urgent relief sought by the applicant. Even if this
is
not so, in my view, a two-year restraint imposed on an employee
whom both parties anticipated on the date that the restraint was
signed would be employed only for six months, is manifestly
unreasonable. Given my conclusions, it is not necessary for me to
consider the parties’ submissions on whether the respondent is
in breach of the restraint.
[8]
For these reasons, in my view, the applicant has failed to make out a
case for the relief that it seeks. Finally, there is no
reason why
cots should not follow the result.
I
accordingly make the following order:
1. The application is
dismissed, with costs.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
Date
of application: 29 July 2010
Date
of judgment: 11 August 2010
Appearances:
For
the applicant: Mr. S Snyman Snyman & Associates
For
the respondent Adv Lennox, instructed by Simpson Masenamela Attorneys