What is this about?
The Labour Court recently ruled and upheld a CCMA finding that dismissing an employee for seeking employment whilst still employed constitutes substantively unfair dismissal.
The employee was fired after negotiating a job with rival a company amid his company’s short-time and retrenchments. The Court confirmed employees retain the right to explore other opportunities, even competitively, without facing dismissal.
Case Background
The employer charged the employee in terms of a term of his contract, banning preparatory steps toward competing businesses during employment. He was dismissed in June 2021 after less than six months of employment, following suspension and a hearing on multiple charges, primarily his job search. The CCMA deemed the dismissal unfair, awarding 12 months' compensation (later reduced to six by the Labour Court on review, but the fact that his dismissal was substantively unfair was upheld).
Court's Key Reasoning
- Public Policy Violation: The clause in the employment contract in question prohibited job-seeking with competitors, is unenforceable as it is contrary to public policy.
- Constitutional Right: Section 22 of the Constitution guarantees freedom of trade, occupation, and profession; employers cannot limit job searches without protectable interests (where the restraint of trade comes in).
- No Conflict or Protectable Interest: Job hunting creates no inherent conflict; restraints post-employment require proprietary interests and the party who wishes to enforce the restraint must prove that there is a protectable interest (i.e. the secret to the “Coke-a-Cola”-formula, or something similar).
Take away
One: Employees cannot be dismissed simply because they are exploring “greener pastures” while they are still employed.
Second: Employers must conclude clear and enforceable restraint of trade agreements with employees if they seek to limit post-employment competition. Vague clauses will not suffice. There must be a protectable interest - the Coke formula or something similar. And herein lies to rub: the person wishing to enforce the restraint must provide reasons and prove why it must be enforced.
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