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[2019] ZALCJHB 326
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Heightsafety Training Academy (Pty) Ltd v Mose and Others (J2039/19) [2019] ZALCJHB 326 (22 November 2019)
THE
LABOUR COURT OF SOUTH AFRICA, HELD AT JOHANNESBURG
Of
interest to other judges
case
No: j 2039/19
In
the matter between:
HEIGHTSAFETY
TRAINING ACADEMY (PTY) LTD
First
Applicant
and
BONGANI
ERNEST MOSE
First
Respondent
EVOLUTION
HEIGHT SAFETY (PTY) LTD
Second
Respondent
EVOLUTION
ROPE ACCESS (PTY) LTD
Third
Respondent
EVOLUTION
SAFETY GEAR (PTY) LTD
Fourth
Respondent
Heard
:
7 November 2019
Delivered
:
22 November 2019
Summary:
(Restraint of trade – limited protectable interest in providing
training and supplies to applicant’s
former customers –
no protectable interest in training provided – delictual claim
for unlawful interference in contract
of employment not within labour
court’s jurisdiction)
JUDGMENT
LAGRANGE
J
Background
[1]
This is an urgent application to review and enforce a restraint of
trade agreement. It is
opposed by the first and second respondents.
[2]
The respondents do not take issue with the urgent basis of the
application.
[3]
The restraint provision in the first respondent’s contract of
employment prohibits
him,
inter alia,
from being employed with
any business competing directly or indirectly with the applicant for
a period of three years from the termination
of his employment, and
within a 200 km radius of Midrand, Cape Town, Middleburg and
Steelpoort. The applicant seeks to enforce
this restraint against the
respondents for a period of three years from 10 December 2018, which
is the date of the first respondent’s
dismissal by the
applicant.
[4]
The respondents concede that the first respondent is in breach of the
restraint of trade
agreement he signed with the applicant, in that,
he is working for the second respondent, a competitor of the
applicant, as a training
facilitator, which is the same work he
performed for the applicant.
[5]
The applicant provides certified training programs,
inter alia,
for persons working at heights, fall arrest certification, rope work
and specialized training and certification for persons working
at
heights as well as the supply of specialized working at heights
equipment. The first respondent was employed as a facilitator
and has
the necessary certification to provide training on behalf of a
certified training provider and students of the applicant’s
clients attending courses so presented by him can obtain
certification.
[6]
Not all of the first respondent’s skills were acquired in
training provided by the
applicant. Prior to his employment on 9
January 2017, he had completed eight courses relating to working at
heights, including
an unrecognised facilitator training course. He
completed a further nine training courses while working for the
applicant which
the applicant paid for and values at approximately R
400,000.00. In his contract of employment specific provision was made
for
the applicant to recover all or part of the costs of any training
course on a sliding scale if the first respondent left the
applicant’s
employment. No costs are recoverable in respect of
any training done more than two years prior to the termination of his
service.
Some free training was also provided in-house.
[7]
It is not disputed that a facilitator in the Height Safety Industry
is a highly sought-after
individual requiring a specialized skill
set.
[8]
The first respondent defends his employment by the second respondent
on the basis that the
applicant does not hold any proprietary
interest or monopoly in the business of height training or training
of facilitators.
[9]
The applicant claims it has a protectable interest in the products
and patents that it owns
which products go hand in hand with its
training and methodology. It contends that the first respondent will
be able to impart
know-how of the applicant in the course of training
students for the second respondents’ clients. It contends that
it’s
technology and method of training are unique and peculiar
and represents a significant investment on its part.
[10]
The respondents put the applicant to the proof of its proprietary
interest in the products it provides and
for which it provides
training. Although the applicant insists it does own the patents of
the products it uses, it does not dispute
the first respondent’s
claim that he had no part in the development of those products or
knowledge thereof. Moreover, the
second respondent claims it uses its
own products in its training services but does not state if it does
not also supply the products,
which the applicant supplies to its
clients.
[11]
In a
previous matter involving another employee of the applicant
[1]
,
who left its employment for that of the second respondent, this court
made an order in the following terms:
[1]
The first and second respondents are interdicted and prohibited from
directly or indirectly approaching or contacting any of
the clients
of the applicant for whom the first respondent performed or
facilitated training whilst in his employment by the applicant,
and
from providing or offering any training services, which the first
respondent was qualified to facilitate when he left
the
applicant’s service, to such clients for the period ending 18
months from the date of his termination of service with
the
applicant, namely until 24 April 2020.
[2]
No order is made as to costs.
The
circumstances of that matter are materially indistinguishable from
this case except in respect of an additional claim made by
the
applicant, and that the applicant should not compete in the supply of
‘working at height gear’.
[12]
That additional claim relates to its contention that the second
respondent is in breach of a gentlemen’s
agreement in the
industry not to poach the employees of other competitors. The
respondents deny any knowledge of such an agreement
and other than a
bold assertion that such a practice exists in the industry, the
applicant has adduced no evidence in support of
that contention.
Whether this additional feature of the case justifies an order
prohibiting the second, third and fourth respondents
from employing
the first respondent during the period of the restraint is discussed
below.
[13]
Before dealing with that, another aspect of this case is that the
applicant sought an undertaking from the
respondents prior to
proceeding with this application, to which the respondents proposed
an alternative undertaking. The undertaking
sought by the applicant
was to the effect that the second respondent undertake:
“…
that
it will either dismiss Mr Mose, as his employment with yourselves is
in direct contravention of his restraint of trade agreement
with our
client or employ him in a capacity which does not contravene the
restraint of trade.”
[14]
The first and second respondents’ counterproposal was to make
an undertaking in line with the second
paragraph of the order made in
the
Maluleke
case. The applicant rejected this proposal on the
basis that the undertaking only related to the first respondent’s
performance
of training or facilitation work and did not prevent him
from performing assessment and moderation tasks as well as performing
rope access projects and recommending and selling its product range.
As mentioned above, the respondents claim that the second respondent
uses its own products in rendering services to its clients. However,
I agree that the undertaking does not address other services
which
the first respondent might render to former clients of the applicant
and this concern is not addressed by the respondent’s
counterproposal or in the answering affidavits. To that extent, I
agree that the counter-proposal is insufficient.
[15]
The other complaint raised by the applicant is that, even if the
respondents deny any knowledge of a gentlemen’s
agreement not
to poach employees of competitors, they implicitly acknowledged that
this is what the second respondent is doing.
I do not think this
implication can be read into the second respondent’s answering
affidavit, though this case and the
Maluleke
one might give
rise to a reasonable suspicion by the applicant that this is in fact
what the second respondent is doing.
[16]
However, even if I am wrong and the applicant has established that
the second respondent intentionally and
without justification induced
or procured the first respondent to breach his employment contract
with the applicant, which it has
not done in this instance, this
court has no jurisdiction to entertain that claim for the reasons
which follow.
[17]
The claim
is delictual in nature. In
Country
Cloud Trading CC v MEC, Department of Infrastructure Development
[2]
the SCA confirmed:
“
[26]
… a delictual remedy is afforded to a party to a contract who
complains that a third party — who is a stranger
to the
contract — has intentionally deprived him or her of the
benefits he or she would otherwise have obtained from performance
under the contract. Examples include preventing a lessee from
taking occupation of the leased property in terms of the lease
(Dantex);
enticing
another person's employees to breach the contract
(Atlas Organic Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd
1981
(2) SA 173
(T) at 202G – H), and so forth…”
[3]
(emphasis
added)
[18]
The labour court only has jurisdiction to hear applications to
enforce restraint of trade agreements against
employees, or former
employees, by virtue of
section 77(3)
of the
Basic Conditions of
Employment Act 75 of 1997
, which states:
“
The
Labour Court has concurrent jurisdiction with Civil Courts to hear
and determine any matter concerning a contract of employment,
irrespective of whether any basic condition of employment constitutes
a term of that contract.”
(emphasis
added)
In
my view, it would require a very elastic and strained reading of that
provision to interpret it as extending to cloaking the
court with
jurisdiction to entertain delictual claims arising from a contract of
employment. Although it is true that a delictual
claim can arise from
a breach of contractual obligations, unlike the determination of a
dispute about the enforcement of a restraint
agreement, the
determination of the delictual claim is not primarily concerned with
the enforceability of contractual obligations.
[19]
A delictual
claim arising from a contractual relationship might ‘concern’
a contract of employment in an incidental
sense, but the
determination of delictual liability requires a court to determine
whether the following essential elements have
been met: harm
sustained by the plaintiff; conduct on the part of the defendant
which is wrongful; a causal connection between
the conduct and the
plaintiff’s harm; and fault or blameworthiness on the part of
the defendant.
[4]
When these
requirements of a delictual claim are considered it is hard to
conceive of that claim as one that predominantly involves
the
determination of a ‘matter concerning a contract of
employment’, even if a breach of an employment contract happens
to be one factual component in the claim in question.
[20]
Moreover,
the ambit of
s 77(3)
must be read in the context of the purpose of
the BCEA, in which it is situated. That purpose cannot, by any
stretch of imaginative
interpretation, be read as intending to
provide for the determination of delictual claims arising from breach
of an employment
contract.
[5]
[21]
While the applicant has a protectable interest in protecting any
exclusive know-how it has in relation to
its own products, and in the
respondents not being able to exploit his association with the
applicants’ existing clients
as a former trainer of such
clients’ employees, the extent of the restraint the applicant
seeks to enforce which would effectively
prevent the first respondent
from utilizing any of the skills he has acquired in facilitating
training in the sector. Such skills
as he learned through the
training courses he went to whilst employed by the applicant, aside
from training related to the specific
equipment and products used by
the applicant, are of general application in the sector and there is
no evidence to suggest that
the training he will provide for the
second respondent will embody know-how exclusive to the applicant.
[22]
Nevertheless, I accept that there is a risk that former clients of
the applicant, to whom he had rendered
training services as a
facilitator, might seek his services. That protectable interest can
adequately be preserved by limiting
the type of client he can provide
training to. I also accept that there is a risk he might engage with
former clients of the applicant
to provide other services. The
applicant’s interests in being able to maintain its existing
customer connections in this
regard are worthy of protection for a
reasonable period.
[23]
In the circumstances, an adequate balance will be struck between the
protectable interests of the applicant,
which - realistically
speaking - might be threatened by the first respondent’s
breach, and the interests of the first respondent
in being able to
pursue the vocation he has been trained in, will be met by the order
below.
Conclusion
[24]
In light of the reasoning above, the main distinguishable feature of
this case from the
Maluleke
case is the slightly wider claim
by the applicant that the first respondent may engage in activities
beyond training and facilitation
in competition with it. Those
interests are adequately protected in my view by extending the ambit
of restricted activities the
first respondent may not engage in.
[25]
No reasons were advanced why the restraint in this case should be
enforced for any period longer than the
court was prepared to endorse
in
Maluleke
and accordingly the order similarly curtails the
period of the restraint.
[26]
On the question of costs both parties have been partially successful
and it would not be appropriate to make
a cost award in favour of the
applicant in view of the limited success it has obtained.
Order
[1]
The matter is dealt with as one of urgency under Rule 8 of the Labour
Court Rules, and to
the extent that there has been noncompliance with
the manner of service and time periods set out in the Labour Court
Rules such
noncompliance is condoned.
[2]
The first and second respondents are interdicted and prohibited from
directly or indirectly
approaching or contacting any of the clients
of the applicant for whom the first respondent performed or
facilitated training whilst
in his employment by the applicant, and
from providing or offering any training services, which the first
respondent was qualified
to facilitate when he left the applicant’s
service, to such clients for the period ending 18 months from the
date of his
termination of service with the applicant, namely until
24 April 2020.
[3]
For the period ending 18 months from the date of his termination of
service with the applicant,
namely until 10 June 2020, the first
respondent is interdicted and prohibited from being engaged in the
supply of ‘working
at height’ safety gear and fall arrest
equipment, which the applicant supplies to its customers, to
customers who were customers
of the applicant at the date of the
termination of his service, and directly or indirectly approaching or
contacting any of such
clients of the applicant, with a view to
supplying them with ‘working at height’ safety gear and
fall arrest equipment,
which the applicant supplies to its customers.
[4]
No order is made as to costs.
_______________________
Lagrange
J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
S
Aucamp instructed by JNS Attorneys
FIRST
AND SECOND RESPONDENTS:
R
G Beaton SC instructed by de Villiers & du Plessis Attorneys
[1]
Heightsafety
Training Academy (Pty) Ltd v Maluleke and Others
(unreported), J 1498/19 dated 26 July 2019.
[2]
2014 (2) SA 214 (SCA)
[3]
At
224-5.
[4]
Evins v
Shield Insurance Co Ltd
1980 2 All SA 40
(A);
1980 2 SA 814
(A) 838–839
[5]
Section
2 of the BCEA states:
2
Purpose of this Act
The
purpose of this Act is to advance economic development and social
justice by fulfilling the primary objects of this Act which
are-
(a) to give
effect to and regulate the right to fair labour practices conferred
by section 23 (1) of the Constitution-
(i) by
establishing and enforcing basic conditions of employment; and
(ii) by
regulating the variation of basic conditions of employment;
(b) to give
effect to obligations incurred by the Republic as a member state of
the International Labour Organisation