BUSINESS LAW & TAX New light on restraint of trade

whether such claim arise from contract, delict, operation of law, equity, fairness or otherwise”

Bradley Workman-Davies & Kelly Sease Werksmans

The question of the enforceability of a restraint of trade was dealt with in Warwick Wealth (Pty) Ltd v Anderson and Others (C178/2023) [2023]

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In this case the court had to determine whether a former employee whose employment contract contained a restraint of trade clause had been in breach after soliciting a sponsorship using the confidential information she acquired while she was under the employ of her former employer for the benefit of her new employer

The court found that there was a valid and enforceable restraint provision in the contract between the parties, and that since it was determined that Anderson had in fact acted in the manner complained of, she had been in breach of the restraint and such breach continued to prejudice

Warwick Wealth’ s protectable interests

In Wheelwright v CP de Leeuw Johannesburg (Pty) Ltd [2023] JOL 57978 (LAC) the labour appeal court (LAC) had to interpret the meaning of a clause incorporated in a settlement agreement concluded after the dismissal of an employee and determine whether such clause extin-

February 28 2010, and which incorporated a restraint of trade undertaking Shortly before the expiry date the parties verbally agreed that the employment relationship would continue on a permanent basis subject to the same terms and conditions guished rights arising out of the enforceability of a restraint of trade enjoyed by the former employer

In this case, on April 26 2007 Wheelwright and his employer entered into a fixed-term employment agreement which would automatically terminate on

In September 2010, Wheelwright was appointed as an associate quantity surveyor by the employer and as such was required to enter into a further restraint of trade agreement with the employer, which replicated the previous agreement’ s restraint clause This agreement was concluded on September 10 2010 In August 2015, Wheelwright became a director of the employer’ s board of directors and also purchased 20% of the issued share capital of the employer

The employer subsequently suffered financial distress due to the Covid-19 pandemic, which resulted in a salary reduction for all employees, including its directors Dissatisfied with the salary reduction, Wheelwright claimed this was in breach of his employment agreement and opted to be retrenched A dispute regarding the calculation of Wheelwright’ s severance pay arose, but notwithstanding this dispute the employer went ahead with Wheelwright’ s retrenchment

Dissatisfied with the terms of the retrenchment he referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) alleging unfair dismissal and failure to pay the current amount of severance pay due to him

At the arbitration proceedings the parties settled the dispute in terms of an agreement prepared by the CCMA which was concluded

Viewpoint Africa

on October 21 2021

The settlement agreement consisted of two separate documents (being a standard form document and Annexure A thereto) The standard form document contained a clause stating that the settlement agreement was entered by the parties in that they “agree to the full and final settlement of the dispute referred to by the CCMA as well as in full settlement of all statutory payments due to the applicant as reflected in paragraph 5 of this agreement”

The settlement agreement elsewhere stated that it was concluded “in full and final settlement of all and any claims which the parties may have against each other

When an opportunity arose for Wheelwright to work on a project not relating to the employer, the employer sought to enforce the restraint which was contained in the September 2010 contract of employment

However, Wheelwright took the view that the CCMA settlement agreement had extinguished the restraint agreement and as such that he was free to work on the project

The labour court initially held that Wheelwright had breached the restraint agreement because the claim only arose after the signing of the settlement agreement, which led to an appeal

On appeal before the LAC, it held that the provisions of the CCMA settlement agreement which purported to settle any and all disputes had to include disputes arising out of an alleged breach of the restraint undertakings which were contained in the September 2010 contract of employment

The use of the words “all and any claims” , the LAC found, meant exactly that