[Question] Is it legal to hold an employee?

[kalyan1709]

Hi Team,

I would like to know how the South Africa's labor law works? Below is my question

My employer: X
My Client: Y


Can an employer hold an employee not to work for the same client for 24 months? My contract is going to end on 31st July 2021. My employer is asking me to sign on an agreement which says:

1. After termination of the contract with employer X, employee should not join the same team in client Y for 12 or 24 months
2. After termination of the contract with employer X, employee should not join different team in client Y for 12 or 24 months

Is this legal in South Africa as per the labor law? If I sign this agreement, I can't join client Y from another contracting agency. Please suggest.

Thanks,
pvrkkumar

[Dave A]

Restraints may be enforceable if they are specific and fair.
If your employer introduced you to the client, I suspect the restraint may be enforceable.
The bit that has me curious is the employer is only asking you to sign the restraint now?
Is there a restraint clause already in your employment contract? (and this is just clarifying/reinforcing specifics?)

[Blurock]

In my flawed opinion your employer should have asked the client to sign agreement not to poach his staff.

[adrianh]

My contract is going to end on 31st July 2021. My employer is asking me to sign on an agreement which says:

1. After termination of the contract with employer X, employee should not join the same team in client Y for 12 or 24 months
2. After termination of the contract with employer X, employee should not join different team in client Y for 12 or 24 months

Its a bit late in the game for this sort of nonsense - I would laugh at the employer - he should have thought of getting you to sign such a thing when you signed the employment contract.

[Blurock]

The main reason for a restraint of trade is to prohibit employees whose employment has been terminated from disclosing confidential and valuable information which they obtained by virtue of their employment, to competing parties. Restraints also seek to protect a company’s client base and supplier connections. It can also be used to prevent a direct competitor from employing a person who has been trained and skilled by his previous employer and so protecting the investment made in the employee by the company.

Immediately though it raises questions about the freedom of employment of a person bound by a restraint of trade and whether such is legally enforceable.

Under South African law, a restraint of trade is valid and enforceable, except when its enforcement would be contrary to public policy, in which case such a restraint of trade will not be upheld, either fully or in part. In other words, you cannot be prevented from finding other employment or practicing your trade.

There is a very fine line. Best is to study your original contract for any such restrictive clauses and if in doubt, obtain a legal opinion.

[kalyan1709]

Thank you all for the reply.

[heathermalone]

It depends on what kind of work agreement and contract you signed with your employer. If you have given the rights and have accepted such holding terms, then there are possibilities for your employer to enforce these. Go through your agreement terms and conditions to get more clarity.