Dismissed employees must honour restraint clauses, says Labour Appeal Court

EARLIER this year, the Labour Court found that a restraint of trade was unenforceable due to the dismissal of the employee.

- ROSALIND DAVEY and CHLOE LOUBSER

This decision was taken on appeal to the Labour Appeal Court (LAC). The judgment provides important guidance for employers seeking to enforce restraints following dismissals and clarifies the scope of the Labour Court's jurisdiction in related matters.Background

Backsports (Pty) Ltd, a company in the internet communications and technology sector, employed an employee as a senior stream lead for 10 months until his dismissal for misconduct on October 16, 2024. His employment contract contained a restraint of trade clause which, among other things, prohibited him from competing with Backsports or any of its subsidiaries, and from soliciting employees, for a period of 12 months from the termination date of his employment.Following the employee's dismissal, he referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration. However, he later withdrew his claim.

Due to concerns that the employee was breaching his restraint of trade undertakings, Backsports approached the Labour Court seeking an order to restrain the employee from soliciting its customers and employees, and from threatening and harassing its employees and directors, or sabotaging its assets.

In the Labour Court