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Thread: Legal Advice Please

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    Legal Advice Please

    Good Day, my questions cover both labour and business law. My husband is a 20% shareholder of a cc., he was employed by the company for 9 years when they offered him an interest in the business 4 years ago. The condition was that he sign a 3 year restraint of trade agreement covering the whole of South Africa. At the time it did not seem like an unreasonable condition as my husband was very happy working there and was planning on retiring with this company. He had full trust and confidence in the members and never intended leaving the company as this was his first job after leaving school and he knew that finding another job would be difficult as he had no further education or training. A few weeks ago he arrived at work and out of the blue they served him with a notice of suspension for dishonest conduct and he was summoned for a disciplinary hearing 2 days later. My husband was in complete shock and disbelief as he was accused of selling goods to customers and depositing the money in his personal bank account for his own benefit. He maintained his innocence during the hearing and provided bank statements and evidence that he was innocent and did not need to steal money from the company which he had a vested interest in. The company had written affidavits from 80% of the stores staff stating that my husband was engaging in dishonest conduct, but the company could not provide any invoices or customer affidavits stating that they paid him the monies or how much they paid him. All the affidavits were similar and when the witnesses were questioned by my husband their answers were all the same as if they had been coached. The facilitator found my husband guilty and the company asked that he resign. He refused to resign stating that he was innocent and they dismissed him. My husband reported the case to the CCMA for a CONARB which the company objected to. On arrival at the conciliation hearing the company said that they wanted to negotiate, which my husband agreed to. This was just a delay tactic as it is clear that they did not really want to negotiate. The case will now go for arbitration. My questions are was the disciplinary hearing procedurally fair as the so called "independent" facilitator was hired by the company and my husband was not consulted, also the evidence he provided was omitted from the recommendation and only the company's evidence was included. Also they are treating him as an employee and not a member of the business and my husband feels like they only used him to secure BEE tenders all these years and now they want to get rid of him. Can he lodge a civil claim against the company for wrongful accusations, defamation of character, forcing him out of the business and loss of income, pending the outcome of the CCMA hearing? Lastly can he challenge the restraint of trade as he is now forced to go out and earn a living and because this is the only line of business he knows it will be very difficult for him to find gainful employment in another line of business? The company is a wholesaler/retailer and the goods they sell are not unique and can be found in most retail stores, ie.e stationers, hardware stores etc.

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    Diamond Member tec0's Avatar
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    I would recommend seeking a legal practitioner. Clearly conspiracy comes to mind and if he can proof no extra income and they cannot give effective evidence of misconduct then he was wrongfully dismissed.

    A wrongful dismissal and conspiracy points to victimisation and it is worth noting that if there was no neutral chairman then the first hearing can be dismissed as a neutral chairman is part of the criteria for a hearing. Second thing to consider is representation? Was he represented? This too may be of some concern to the CCMA.

    It is also within your right to ask for a lie detector test on the members that testified against him. It would be better if the company has no pervious dealings with the people that would conduct the test.

    You can also point out to your legal practitioner that your evidence was dismissed outright however in a court case financial dealings will be considered as evidence. I hope it helps a bit.

    Remember no one can force anyone to do anything in a hearing and you are allowed to escalate regardless of the outcome.

    Also you need not accept any offer that is on the table and don't allow anyone to force you to accept anything.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Diamond Member Justloadit's Avatar
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    With respect to the restraint of trade, it will be extremely difficult to uphold this by the company concerned, as no monetary compensation was given to ensure the restraint of trade, and no one can prevent you from earning a living from your skills that you possess. My suggestion is that your husband get legal representation on this as soon as possible, as this may turn out to be a mine field, and having the right representation in your corner will ensure smooth sailing.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Site Caretaker Dave A's Avatar
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    I also recommend getting a lawyer involved as soon as possible. Seems like there's a lot on the line here, so I wouldn't play around.

    Quote Originally Posted by Justloadit View Post
    With respect to the restraint of trade, it will be extremely difficult to uphold this by the company concerned, as no monetary compensation was given to ensure the restraint of trade
    Based on the evidence presented so far, we don't know that. There is the little matter of shares acquired a few years ago, and nothing has been said on what was paid for them, fair value etc.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member Justloadit's Avatar
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    I go with Dave, get a lawyer ASAP!
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Platinum Member sterne.law@gmail.com's Avatar
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    The issues at hand:
    The dismissal: - Refer the matter at the CCMA for arbitration and continue. This is where the issues of the procedure and substance will be tested
    the shares: - he should still be a shareholder unless the shares and employment are interrelated. This notwithstanding, while there is a labour dispute he could still protect his asset with an interdict, pending the outcome. The actual agreement and company articles or MOi will determine what happens, particulalry in terms of being paid out for shares. As a 20% equity owner he eithers contiunes with managment rights and voting rights or they must buy his shares.

    Shareholding and employment though interrelated are still seperate issues.
    As a shareholder he could apply to liquidate the cc, which may shake the tree enough.

    The restraint: - In answer to some posts above, there was a payment in that it formed part of the share purchase arrangement. however, there is no law or practice that a person must be compensated for a restraint. This is a misunderstood concept. It is practiced though at times. The issue of contract vs constitutional rights went back and forth until it was decided that the signed contract will stand, which must then be challenged. Restraints are challenged on grounds of reasonableness and public interest. you can ignore it and wait for the company to act or you can get a court to issue a ruling.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Dave A (26-Sep-11), Justloadit (26-Sep-11)

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    Platinum Member sterne.law@gmail.com's Avatar
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    And yes, you may want to consult with an attorney!!!

    Try Steve Bester of Kotze attorneys 012 331 809
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Mrs A (28-Sep-11)

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    Thank you all for the great advice, much appreciated.

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