In modern employment contracts, restraint of trade clauses are commonly inserted to protect the employer’s proprietary interests. The purpose thereof is to prohibit an employee for a specified period and prescribed geographical area from taking up employment with a direct competitor.

Employers need to be wary of employees who breach restraint of trade clauses and agreements as this may lead to exponential loss in the employer’s proprietary interests and reputation in the market. Urgency is an important element for the successful protection of an employer’s proprietary interest.

When the restraint of trade obligations of an employee is breached, an employer may launch an urgent application interdicting the employee from taking up employment with the direct competitor.

Rule 8 of the Rules for the Conduct of Proceedings in the Labour Court highlights the grounds for urgent applications. An applicant seeking relief by way of an urgent application seeks an indulgence from the court for the application to be given preference and treated as one of urgency given the nature of the employer’s business.
The onus, according to Rule 8 of the Labour Court Rules, is on the employer who seeks relief in terms of the urgent application to provide substantial reasoning, within the founding affidavit, why the matter before the court should be treated as one of urgency. In Sibongelenn Radebe v The Aurum Institute (C662/2023) [2023] ZALCCT 66, the court reiterated that when determining urgency, it is critical that the applicant has within their founding affidavit established the background circumstances which make the matter urgent and the core reasoning why substantial relief cannot be attained within the normal prescribed time frame.

Urgency is determined by the courts on a case-by-case basis. The core aim of the application is directed to protect the employer’s proprietary interests in relation to their trade secrets, confidential information, and company clients.

In Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) the employee, as per his restraint of trade clause was prohibited from joining the employer’s direct competitors in the market. The court found in favour of the employer, stating that the restraint of trade clause in the employment contract was neither unreasonable nor contrary to public policy and should stand. Therefore, a restraint of trade clause is reasonable unless it can be proved to be unreasonable. However, the onus of proof rests on the person alleging its unreasonableness.

This blog was co-authored by Francisco Andrade-nobrega, Candidate Attorney.