Hi-Tech Recruitment (Pty) Limited and Others v Nel and Another (J909/2016) [2016] ZALCJHB 250 (18 July 2016)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Case no: J909/2016

DATE: 18 JULY 2016

Not Reportable

In the matter between:

HI-TECH RECRUITMENT (PTY) LIMITED.............................................................First Applicant

HIGHER INTELLIGENCE (PTY) LIMITED.........................................................Second Applicant

ANTHROPI HOLDINGS (PTY) LIMITED...............................................................Third Applicant

And

CARMEN NEL (LAW)................................................................................................First Respondent

REDHEADS ENGINEERING SOLUTIONS (PTY) LIMITED.........................Second Respondent

Heard: 09 June 2016

Delivered: 18 July 2016

TLHOTLHALEMAJE, J

Introduction:

[1] The Applicants seek interdictory relief to enforce certain restraint of trade and confidentiality undertakings contained in the First Respondent’s contract of employment. The relief sought by the Applicants was initially in two parts. In Part A, the Applicants sought to obtain an urgent interim interdict to prevent the First Respondent from taking up employment with the Second Respondent, so as to preserve the status quo, pending an application for final relief. Following the filing of the answering affidavit, and to the extent that the First Respondent had conceded that she had indeed signed the restraint of trade agreement and had also joined the employ of the Second Respondent, which was a direct competitor of the Applicants, the latter formed a view that the application should proceed for final relief as set down on 19 May 2016.

[2] When the application came before Whitcher J, the First Respondent however agreed to an interim order in terms of the relief as sought in Part A. This therefore also disposed of the dispute in regards to the existence of the restraint agreement and the question whether the Second Respondent was a competitor or not.

[3] The application was launched on an urgent basis. Whilst conceding that interim relief has since been obtained (thereby neutralizing the immediate urgency), the Applicants’ contention is that Part B of the application remains urgent on the basis that not only because restraints of trade are considered by this Court to be inherently urgent, but also because the First Respondent has deferred her employment with the Second Respondent pending the final determination of this matter. It was also submitted that in those circumstances, the First Respondent equally have an interest in disposing of this matter as soon as possible. The First Respondent did not take issue with the urgent nature of the application, and to the extent that she remained unemployed and cannot take up employment with the Second Respondent pending the final determination of this application, the matter shall be treated as urgent. Furthermore, it is accepted that disputes pertaining to breach of a restraint of trade are invariably of an urgent nature[1].

[4] In Part B, the Applicants seek a final order, inter alia, interdicting and restraining the First Respondent for a period of 12 months and in the whole of South Africa, from being employed by the Second Respondent. An order is also sought to enforce the First Respondent’s obligations arising out of the parties’

restraint of trade agreement. In the event that the Applicants are successful, an order of costs, including the costs of two counsel is sought from the First Respondent.

Background:

[5] The papers in this matter are voluminous. Some were filed and delivered on the morning of the hearing of the application. The

papers include the normal three sets of affidavits, an additional supplementary replying affidavit as filed by the Applicants to their own replying affidavit, the Applicants’ supplementary affidavit (new evidence), the First Respondent’s response to the Applicants’ replying and supplementary replying affidavit, and an additional answering affidavit to the Applicants’ new evidence. Both parties also filed comprehensive heads of argument for which the Court is indebted. In determining the merits of the application however, I have endeavoured to focus on what I deem to be the essence thereof.

[6] The First and Second Applicants are subsidiaries of the Third Applicant and the Group as a whole is referred to as the ‘Anthropi

Group’. Prior to 2011, the Group comprised of a number of entities including Hi-Tech Recruitment CC (The CC). The First Respondent had entered into a contract of employment with the CC on 15 June 2011. The contract made provision for certain restraint of trade and confidentiality undertakings made by the First Respondent to the CC and any ‘Associated Company’ as defined in the contract.

[7] During 2011 the Group was restructured, and the business of the CC was split into two, viz, ‘Higher Intelligence’ and Hi-Tech Recruitment’, which had continued as the brands of the CC. The latter continued to remunerate the employees of both brands. A decision was taken to house the brands in separate corporate entities in 2012, and the Second Applicant was registered in February 2014. In February 2014 the business of Higher Intelligence was transferred as a going concern from the CC to the Second Applicant. The employment contracts entered into between the CC and its employees were automatically transferred to the Second Applicant in accordance with section 197 of the LRA. The CC was converted into a (Pty) Limited in 2015, together with the Third Applicant.

[8] Currently, the Group consists of the First and Second Applicants, together with several other recruitment companies, all specialising

in the industries of engineering, mining, manufacturing (encompassing fast moving consumer goods and heavy industry), civil consulting and construction industries, and also provides engineering and technical skills.

[9] The business of the Group and that of the Second Applicant in particular is in the placement of candidates at companies and/or

legal entities. Such placements may be permanent or long term temporary. Its income is generated from the placement fees derived

from placements, and the fees charged to the client is a percentage of the annual remuneration package agreed between the client and the candidate. The companies at which the candidates are placed are divided into those at which the Group has placed candidates (existing clients) and those which would be suitable for the candidates and where the ground work has been laid.

[10] The Applicants’ contention is that the proprietary interests sought to be protected have always been that of the business of the Second Applicant (as rebranded), being the business in respect of which the First Respondent had at all material times rendered her services to. The Second Respondent was joined to these proceedings as the First Respondent is currently in its employ or is intent on being in its employ despite it being common cause that it is a direct competitor of the Second Applicant. The Second Respondent has not opposed the application and will abide by the Court’s decision.

[11] The Applicants’ contention as per the averments made in the founding affidavit deposed to by its Managing Executive, Michele Hill, is that from the Second Respondent’s website, it is apparent that it is a group of companies founded in Germany, and is an international provider of engineering services to industrial, commercial, retail, institutional and government sector clients across Southern Africa with offices in Cape Town and Gauteng. The Second Respondent also provides a variety of services including engineering consulting; complete solutions; staff on a temporary basis in terms of its secondment offering; or recruitment of engineers and other technical staff. It is active in all fields of engineering, and like the Second Applicant, places candidates in all fields of engineering it is active in. In terms of recruitments, the Second Respondent also assists its existing and prospective clients with recruiting candidates for permanent placements within their organisations, especially engineers, technologists and technicians. It is also a private employment agency which operates in inter alia, the engineering, mining, manufacturing, civil and construction sectors, and also offers both permanent and temporary placements.

[12] It is also contended by Hill that the Second Respondent offers recruitment services in direct competition with it, and that both operate head-on in the same market place. In this regard, it is contended that it offers recruitment services in the very field in which the First Respondent operated whilst in the employ of the Second Applicant. Hill further contended that the field is extremely niche, and that not only does the Second Applicant and the Second Respondent service certain of the same clients, but both will draw from the same limited pool of candidates when filling positions.

The first respondent’s employment and the restraint agreement:

[13] The First Respondent was offered a contract of employment by the then CC (now Second Applicant) on 20 May 2011 as a Full Time

Sales/Recruitment Consultant. Her appointment commenced on 20 June 2011. Prior to her appointment, she had not been exposed to the recruitment industry nor had she worked as a recruitment consultant. When a written offer of employment was made by the CC, a provision was made that the First Respondent understood that it was conditional upon her signing a detailed contract of employment, which contract expressly contained a restraint of trade provisions. It is the Applicants’ case that the First Respondent was therefore fully aware from the outset that should she accept the offer of employment, she would be required to furnish certain undertakings[2].

[14] The First Respondent commenced her employment with the CC on 15 June 2011, having concluded the written contract of employment which is about 46 pages long. The restraint and confidentiality undertakings are contained in four main clauses, viz;

Clause 5: Confidential Information, which provides that the first respondent as a consequence of the agreement will have access to the TRADE SECRETS and CONFIDENTIAL INFORMATION of the company;

Clause 6: Return of Documentation, Records, Title and Copyright

Clause 12: Restraint of Trade; and

Clause 12: Soliciting Staff

[15] In terms of the restraint provisions, the First Respondent further undertook for a period of two years from the date of the termination of her employment, not to take up employment or be associated in any way with a business competitive to that of the Applicants, and/or to perform recruitment services in competition with the Applicants; not to solicit the business of the Applicants’ clients; and not to utilise, disclose or divulge the Applicants’ confidential information.

[16] To the extent that the Applicants had conceded that the First Respondent only had access to the Second Applicants’ confidential information and had forged connections on behalf of the Second Applicant, it was only the proprietary interests of the Second Applicant that were sought to be protected, and to this end, the restraint of trade was only to be enforced for a period of 12 months across the whole of South Africa. The Applicants thus seek to restrain the First Respondent from competing directly or indirectly with it in the fields of engineering, mining, manufacturing (encompassing fast moving consumer goods and heavy industry), civil consulting and construction, and from providing skills including technical and engineering skills to these industries, which are deemed to be the core focus of the Second Applicant’s business.

[17] It is common cause that the First Respondent tendered her resignation from the Second Applicant’s employ on 1 February 2016 by giving one months’ notice instead of three months as per the provisions of her contract of service. According to Hill, the First Respondent had refused to give the required three months’ notice despite this being brought to her attention, and had also upon being questioned, refused to divulge where she was going to be employed.

[18] A meeting was held with the First Respondent on 2 February 2016, with the Applicants being represented by its Ms De Lange, the Legal and HR Manager of the Group, its Ms Labuschagne who was the First Respondent’s direct Manager, and Ms Sofos of its attorneys of record. At that meeting, the First Respondent stated that over the past weekend, she had received a spiritual vision to the effect that she should no longer work for the Group. She had also indicated that she had no confirmed offers of employment, and that God had spoken to her at her church, and that she had been called to resign as a ‘leap of faith’. According to Hill, the First Respondent had given assurances that she had no intention of harming it or its interests in any way.

[19] At that meeting, the First Respondent had according to Hill, also indicated that her then unnamed attorney had informed her that a three months’ notice period was illegal and unreasonable, and that she was not prepared to serve that period. The Second Respondent nevertheless disputes this version, but however confirmed that she had been advised by a legal insurance company (APSO) that she was not legally obliged to disclose the name of her prospective new employer.

[20] Following a further meeting held with the First Respondent, and after she had given assurances that she had no intentions of continuing in the recruitment industry as she sought to follow her religious calling, she had also agreed to tender her full notice, which ultimately was agreed to at two months. She had further given assurances that she would not breach the terms of her restraint of trade. Despite giving these assurances, the First Respondent on 3 March 2016 submitted an application to the Second Applicant’s

De Lange, to relax the restraint of trade provisions. According to Hill, from this application, it was apparent to the Second Applicant

that the First Respondent had every intention of taking up employment with its competitor, and needed to renegotiate the terms of the restraint to suit her needs (i.e. only to be restrained from dealing with certain clients whose names were listed in that application). The Second Applicant did not agree to the relaxation of the restraint agreement.

[21] On 14 March 2016, the First Respondent submitted a sick note absenting herself on sick leave until 18 March 2016 due to stress.

When the Second Applicant demanded clarification regarding the validity of the sick note, a further sick note was tendered on 1

April 2016, placing her on sick leave from 31 March 2016 to 8 April 2016. In an attempt to amicably resolve the matter, correspondence

was exchanged between the Applicants’ and First Respondent’s attorneys, with the latter further contending that their client was of the firm view that she had signed the contract of employment incorporating the restraint of trade provisions under duress, and further that their client’s intention is to keep her options open in the recruitment business.

[22] It was only on 14 April 2016 that the First Respondent’s attorneys of record had confirmed that their client had been offered employment by the Second Respondent. On 27 April 2016, the Applicants’ attorneys of record advised the Second Respondent

in writing of the First Respondent’s restraint of trade and confidentiality undertakings, and that her intended employment with it would constitute a breach thereof. The Second Respondent was implored to withdraw the offer of employment made to the First

Respondent.

[23] The First Respondent’s employment was terminated on 29 April 2016. Subsequent thereto, the parties met on 10 May 2016 where ‘with prejudice tenders’ were made. The First Respondent’s tender was on the basis that she be permitted to take up employment with the Second Respondent in exchange of certain undertakings including that she would not place any candidates at the clients listed by her in her application for relaxation of the restraint of trade; place any candidates which she had placed for the Second Applicant at any stage in the preceding two years; solicit any of the Second Applicant’s staff members; and divulge or require her to divulge any of the Second Applicant’s confidential information. The Applicants viewed the tender as self-serving, not in good faith, and had thus rejected it.

[24] The basis of the Applicants’ ‘with prejudice’ offer was to pay the First Respondent her net basic salary until end of May 2016; to actively assist her in finding alternative employment that would not infringe the Second Applicant’s proprietary interests; and to restrain her from offering recruitment services only in the fields of Engineering, Mining, Manufacturing, Civil Consulting and Construction sectors. The First Respondent rejected this tender on 11 May 2016, as she held the view that her tender went a long way in alleviating the concerns of the Second Applicant.

The legal framework and evaluation:

[25] It is trite that a party that seeks to enforce a contract in restraint of trade must invoke the contract and prove the breach

thereof. The principles set out in Magna Alloys and Research (SA) (Pty) Ltd v Ellis[3] have remained authoritative in regards to restraint of trade agreements. It is thus accepted that restraint of trade agreements

are enforceable unless, and to the extent that they are contrary to public policy because they impose an unreasonable restriction on the former employee’s freedom to trade or to work[4]. The onus is on a party wishing to be absolved from a restraint of trade agreement to allege and prove on a balance of probabilities

that the restraint agreement is unenforceable because it is contrary to public policy and thus unreasonable[5]. To the extent that disputes of fact may arise from the parties’ pleadings, the approach as set out in Plascon Evans Paint Ltd v Van Riebeeck Paints (Pty) Ltd[6] is applicable.

[26] The Court in Magna Alloys accepted that a contract in restraint of trade is not necessarily wholly enforceable or wholly unreasonable, and a court may in the public interest, order that the whole, or only a part, or no part at all, of a restriction on trade be enforced[7]. The Court stated that it is in the public interest that persons honour their own agreements. The fact that an agreement is unreasonable or unfair in regard to one of the parties will normally not provide any ground for challenging its validity[8].

[27] In Sunshine Records (Pty) Ltd v Frohling and Others[9] Grosskopf JA, in line with the common law freedom to economic activity or trade, which is further underpinned by section 22 of the Bill of Rights in the South African Constitution[10], summarised the approach in Magna Alloys as follows:

'In determining whether a restriction on the freedom to trade and to practise a profession is enforceable, a court should have regard to two main considerations. The first is that the public interest requires, in general, that parties should comply with their contractual obligations even if these are unreasonable or unfair. The second consideration is that all persons in the interests of society, be permitted as far as possible to engage in commerce or professions or, expressing this differently, that it is detrimental to society if an unreasonable fetter is placed on a person's freedom of trade or to pursue a profession. In applying these two main considerations, a court will obviously have regard to the circumstances of the case before it.'

[28] The Court in Magna Alloys did not specify what the test for reasonableness was. In Basson v Chilwan and others[11] Nienaber JA, having aligned himself with the principles set out in Magna Alloys, identified four questions which should be asked when considering the reasonableness of the restraint. These are;

1. Does the one party have an interest that deserves protection at the termination of the employment?

2. If so, is that interest threatened/prejudiced by the other party?

3. Does such interest weight qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive?

4. Is there an aspect of public policy having nothing to do with the relationship between the parties, which requires that the restraint

be maintained or rejected? Thus, where the interest of the party sought to be restrained outweighs the interest to be protected, the restraint is unreasonable and consequently unenforceable.

[29] The Court in Experian[12] also made reference to Kwik Kopy (SA) (Pty) Ltd v Van Haarlem and Another 1999[13], where a further consideration was added, viz, whether the restraint goes further than is necessary to protect the interest. In this regard issues such as the duration of the restraint and the geographical area covered by the restraint are accorded the same

importance[14]. In similar vein, Wallis AJ (as he then was) in Den Braven SA (Pty) Ltd v Pillay and Another[15] held that:

"The proper approach in my view is for the court to ask itself whether the conduct that the applicant seeks to restrain by way of an interdict is conduct that falls within the terms of the restraint agreement and from which the former employee agreed to abstain. If the answer to that question s in the affirmative the court then moves to an analysis of whether it should, in accordance with the principles of public policy, enforce the agreement to that extent by granting relief to the applicant. It has no need in those circumstances to have regard to those portions of the agreement that are more extensive than the relief actually being sought."

Circumstances leading to the signature of the restraint agreement:

[30] In opposing the application, the First Respondent’s first main contention was the restraint should not be enforced because she, as a 28-year old woman at the date of her employment, was “overwhelmed” by the employment contract and was given only 2 hours to consider it. She had signed the contract without reading the whole document, and consequently, did not realise that it contained restraint undertakings. In this regard, although not disputing the fact that she had signed the offer of employment[16], she could not recall having seen or read the fine print paragraphs. She contended that four weeks later, she was required to sign the full 46-page fine print contract of employment, and that her request to take a copy home to study it properly was refused. She contends that worse still, at that stage of her life, she did not know what a restraint of trade was.

[31] It was further the First Respondent’s contention that she was not afforded an opportunity to properly consider the contents of the contract and negotiate its terms and conditions; that with an employment background of being a merchandiser, secretary, fragrance consultant, image consultant and freelance make-up artist, amongst others, she was presented with a 46-page fine print employment contract containing the restraint of trade provisions, and that the provisions surrounding it and relevant thereto spanned over a number of pages, and were scattered throughout the contract.

[32] It was common cause that the signing of the contract was video recorded, and the First Respondent’s further contention was that this point of the interaction (request to take a copy home) was conveniently not video-recorded. She contended that she was faced with a situation whereby, should she not sign the contract, she would be left unemployed, having resigned from her previous employment. She submitted that effectively she had no choice but to sign the contract of employment, having not been placed on equal footing or provided with a proper opportunity to read and consider the implications of the whole contract. In the light of these factors, it was her contention that she should be excused from the restraint and other undertaking provisions as contained in the agreement.

[33] The Applicants disputed the First Respondent’s contention that the contract was unenforceable in the light of the circumstances

leading up to its signature. In this regard, it was submitted that to the extent that the First Respondent might rely upon duress, she does not remotely satisfy the test upon which she bears the onus[17]. Further to the extent that she might have relied on undue influence in seeking to rescind the contract, it was contended that no such case had been made out.

[34] I have had regard to the averments made by the parties in all the various sets of affidavits in regards to the issues surrounding the circumstances under which the agreement was signed. I am in agreement with the submissions made on behalf of the Applicants that the First Respondent’s contention that the circumstances leading to the signature of the agreement made it unenforceable lacks merit. My reasons in this regard are as follows;

[35] The principles applicable in instances where duress is alleged as enunciated by Corbett J in Arend v Astra Furnishers (Pty) Ltd[18] remains authoritative. In this regard, it was held that duress may take the form of inducing in a contracting party, a fear by means of threats, and that where a person seeks to set aside a contract, or resist the enforcement of a contract, on the ground of duress based on fear, the following elements must be established, viz,

(a) a reasonable fear that the threat might eventuate;

(b) that the fear was caused by the threat of some considerable evil to the ex-employee;

(c) that the threat was of imminent or inevitable evil;

(d) that the threat or intimidation was unlawful or contra bonos mores;

(e) that the moral pressure exerted by the threat has caused damage.

[36] The First Respondent as correctly pointed out has not in any manner satisfied the above requirements. Her main contention was that the circumstances under which she had signed the contract of employment can lead to only one conclusion, i.e., that she had to sign the contract or be unemployed. It was alleged that she was not in a position whatsoever to bargain or negotiate the contract before signing it.

[37] Firstly, it is not correct as she had asserted in her answering affidavit, that at no point was she informed that she would she be subjected or expected to sign a restraint undertaking. In this regard, she had conceded that on 20 May 2011, she signed annexure ‘MH7’, which is the initial two-paged offer of employment. This offer reads as follows;

‘Dear Carmin,

Offer of Employment:

We take great pleasure in extending an offer of employment to you with our company. This offer is conditional on you signing a detailed

Employment Agreement containing numerous material provisions including but not limited to the confidentiality and restraint of trade clauses. (My emphasis) We set out below the some terms of your offer. We urge you to acquaint yourself with and ensure that you understand and agree with all the terms of your employment prior to the acceptance of our offer of employment (Sic)

{TABLE OUTLINING THE TERMS AND CONDITIONS OF SERVICE}

We look forward to welcoming you as part of our team!

Yours faithfully

Annalise Labuschagne

Managing Executive

HI-TECH RECRUITMENT

I understand that in addition to the terms set out above, I will be required to conclude a detailed agreement of employment containing

inter alia clauses relating to confidentiality and restraint of trade. (Emphasis)

EMPLOYEE (Signed)’

[38] Having regard to the above, and it being the Applicants’ case that the First Respondent had insisted upon a written offer of employment prior to her commencing her employment and/or resigning from her previous employment, it is not only improbable, but equally inconceivable, that she could have in any shape or form, been subjected to some form of duress or undue influence. At the time that she signed the offer of employment, she was gainfully employed by her erstwhile employer, and the contention that she either signed the contract or remained unemployed is equally fallacious. She had a choice at the time that she signed the offer of employment. If she was uncertain or uncomfortable about the restraint of trade and other undertakings referred to in that offer in two clear instances, (which in my view she had conveniently omitted to read), she could have at that stage enquired what that entailed, and refused to sign the agreement until such time that she had seen and studied the full contract.

[39] The First Respondent in my view voluntarily signed the offer of employment which had alerted her to future undertakings to be made. On her version, she had signed the offer on the same day after verifying the details as contained in the table, as per her discussion with Labuschagne, including the position, remuneration, benefits and working hours. It is improbable that she would have read everything else but the provisions relating to the restraint and confidentiality undertakings. If she did not read the fine print above and below the table as she had alleged, it should be concluded that she did so by choice, and it does not assist her case that she was more concerned with the other terms and conditions of the offer to the exclusion of everything else contained in clear terms in that document. Even more significantly, the First Respondent does not raise any concerns regarding the circumstances under which she had signed the offer of employment.

[40] Much was also made of the fact that the signing of the contract as video-taped does not capture the essence of the fact that she was pressured into signing the agreement. A transcript of the video tape[19] pertaining to the signing of the contract on 15 June 2011 however reveals that Natalie De Jesus of the CC at the time had asked her whether she understood what a restraint of trade meant. The First Respondent’s immediate response to that question is inaudible, but after De Jesus had nevertheless explained to her what a restraint of trade meant, her response was “Okay”. In no way from that response can it be said that she never understood or appreciated what the consequences of signing the contract were, nor can it be said that the circumstances under which she had signed the contract were oppressive towards her or had placed undue pressure or influence upon her. As the Labour Appeal Court in Trevlyn Ball v Bambalela Bolts (Pty) Ltd and Another[20] stated, to require an employee to agree to a restraint as part of her contract of employment cannot, by itself, constitute duress as contemplated in the law of contract. Even moreso, it does not assist an ex-employee to complain of threats or duress some five years after taking up employment, as it becomes glaringly obvious that it is convenient for her to so, as she seeks to be excused from her contractual

obligations.

[41] A further consideration on the issue of the alleged duress is that the main contract is a 46-paged document titled;

‘AGREEMENT OF APPOINTMENT /EMPLOYMENT INCORPORATING RESTRAINT OF TRADE, NON-SOLICITATION OF STAFF AND CONFIDENTIALITY AGREEMENT’.

On the First Respondent’s own version, she was given two hours within which to study the document and append her signature thereto. I am in agreement with the submissions made on her behalf that a factor to be taken into consideration in determining whether a restraint of trade should be enforced or not, is the equality or otherwise of the bargaining power of the respective parties in negotiating / signing the employment contract[21]. The First Respondent however appears to seek to deal with the main contract as an isolated document when this is not the case. It is in that light that I have raised the concern that the issue of duress does not feature insofar as the signing of the offer of employment was signed. The signing of the main contract was merely a formalization of what was contained in the offer of employment she had voluntarily signed on 20 May 2011. At that stage, her bargaining power was not at all compromised as she was then in the employ of another entity.

[42] From the heading of the document itself, it is evident that the First Respondent could not possibly have not known what the document was all about. The fact that she was given two hours to read the document or that she was not allowed to take a copy home for further digestion does not detract from the fact that as at the time that the main document was signed, she had already committed to the restraint undertakings on 20 May 2011.

[43] Even more dispositive of the First Respondent’s allegations in this regard is that as correctly pointed out on behalf of the Applicants, she in any event, falls squarely within the operation of the principle caveat subscriptor[22]. It has been held that the caveat subscriptor principle will not be enforced if the terms of the contract have been inadequately or inaccurately explained to an ignorant signatory[23]. I however do not believe that the First Respondent was an ignorant signatory to the contract, nor do I believe that there is any merit in her contentions that she could not possibly have been aware what the consequences of signing a restraint agreement were. Clause 23 ‘DECLARATION’ of the agreement further provides that she has been afforded an adequate opportunity to peruse the agreement, to acquaint and satisfy

herself with the provisions and signed the agreement on that basis. Accordingly, it is found that her contentions that the circumstances under which the contract was signed made such a contract unenforceable are clearly without merit and ought to be rejected.

Protectable proprietary interests:

[44] Clause 12.2 of the contract of employment provides that;

‘For the reasons, inter alia, set forth in clause 12.1. the Employee agrees and undertakes that in order to protect the respective

proprietary interests of the Company and/or any Associated Company/ies, the Employee shall not, for the periods recorded in clause 12.3 below, and during the course of his employment with the company: -

12.2.1 be concerned, engaged, involved or have an interest, in any capacity, whether as an owner, shareholder, member, director, manager, group leader, personnel consultant, trainer, team leader or otherwise, in any business is similar to or competing with the respective businesses of the company and/or any associated company/ies, in the field of personnel recruitment, which is either

physically based, which carries out any of its operations , or conduct any business, whether telephonically, by means of telefax,

E-mail, via the Internet, or in any other manner:-

12.2.1.1 within the province of Gauteng; and/or

12.2.1.2 with a 50 (FIFTY) kilometre radius of the physical address of any and every branch or administrative office of the place of business of the company, or that of its associated companies; and/or

12.2.1.3 within South Africa

[45] It is common cause that the First Respondent has joined or is intent on being employed by the Second Respondent, an entity which she had conceded is a direct competitor of the Second Applicant. Ordinarily, such conduct would prima facie constitute a breach of the restraint agreement as she had conceded in her answering affidavit[24]. Other than denying that the enforcement of the agreement will serve to protect the Applicants’ alleged protectable interests, she submitted that the mere fact that she has taken up employment with the Second Respondent, does not in itself entitle the Applicants to any relief if all that she would be doing, is to apply her skills and knowledge acquired whilst in the employ of the Second Applicant. To this end, it was further submitted that it is only if the restriction on her activities serves to protect a proprietary interest relied on by the Second Applicant that she would be in breach of her contractual obligations[25].

[46] In Experian[26], the Court identified protectable interests deserving of protection in the following terms;

“It is well established that the proprietary interests that can be protected by a restraint agreement, are essentially of two kinds,

namely:

‘The first kind consists of the relationships with customers, potential customers, suppliers and others that go to make up what is

compendiously referred to as the “trade connection” of the business, being an important aspect of its incorporeal property

known as goodwill;

The second kind consists of all confidential matter which is useful for the carrying on of the business and which could therefore be used by a competitor, if disclosed to him, to gain a relative competitive advantage. Such confidential material is sometimes compendiously referred to as “trade secrets”.’ (References omitted)

Customer connections:

[47] Customer connections entails the relationship a business has with its customers and potential customers, and it is an important aspect of a business’ goodwill. In Den Braven S.A. (Pty) Limited v Pillay and Another, the Court held that;

“The legal position where an employer seeks to enforce a restraint of trade agreement on the basis of a risk of harm to its trade

connections and in particular its connections with its customers, has been authoritatively set out in the following terms:

“The need of an employer to protect his trade connections arises where the employee has access to customers and is in a position to build up a particular relationship with the customers so that when he leaves the employer’s service he could easily induce the customers to follow him to a new business... Heydon The Restraint of Trade Doctrine (1971) at 108, quoting an American case, says that the “customer contact” doctrine depends on the notion that:-

“The employee, by contact with the customer, gets the customer so strongly attached to him that when the employee quits and joins a rival he automatically carries the customer with him in his pocket””

In Morris (Herbert) Limited v Saxelby [1916] 1 AC 688 (HL) at 709 it was said that the relationship must be such that the employee acquires:-

“Such personal knowledge of and influence over the customers of his employer ... as would enable him (the servant or apprentice), if competition were allowed, to take advantage of his employer’s trade connection...””[27]

[48] It has also been held that the onus is on the respondent to demonstrate that he/she never acquired any significant personal

knowledge of, or influence over, the applicant’s customers whilst in the applicant’s employ, and that it suffices if it is shown that trade connections through customer contact exists, and that they can be exploited if the former employee were employed by a competitor. Thus once a conclusion has been reached and it is demonstrated that the prospective new employer is a competitor of the applicant, the risk of harm to the applicant, if its former employee were to take up employment, becomes apparent[28].

[49] The Applicants’ contention was that its business operations depended upon the protection of proprietary interests in confidential information and customer connections. In this regard, its main case was that as the recruitment industry as a whole was extremely competitive, the client and candidate database and recruitment methods and techniques of the applicants as developed by its Marina Welihockyi were the lifeline of its business, and were closely guarded and protected. It was further contended that Welihockyi had experienced first-hand the devastating effects of the unlawful use by ex-employees of her company’s confidential information and customer connections, and that there was a real risk that the Second Applicant’s business would suffer direct financial harm should the First Respondent be permitted to compete with the Second Applicant and, in doing so, take advantage of the confidential information and customer connections which she had access to and/or forged, respectively, whilst in its employ. It was further submitted that the First Respondent would immediately benefit the Second Respondent, and could deprive the Second Applicant of substantial business by virtue of her knowledge and customer connections, and would be enticed to do so as this was the basis on which she would be in a position to earn commissions.

[50] The First Respondent on the other hand disputed that she had close relations with customers and it could certainly not be said she had them ‘in her pocket’. She conceded having dealt with more companies than as reflected in her application for the relaxation of the restraint undertakings, but denied having forged relationships with them. She contended that there was no loyalty between her and those companies and did not have then ‘in her pocket’. Insofar as some sort of relationship may exist between herself and and companies, she had given a number of undertakings including that she would not do business with companies at which she had made placements in the last two years and had also obtained the same undertaking from the Second Respondent in an attempt to allay any insecurities that the Applicants may have that she could pass that information on to another consultant within the Second Respondent’s business. She further suggested to the Applicants that the undertakings would apply for 18 months from the date of the termination of her employment.

[51] To further show good faith, she had also has switched off her cell phone and placed a voice mail message thereon, stating that callers should contact the Second Applicant for further assistance. She has also given the Second Applicant the option of taking over her cell phone contract, and has also during 2015, signed a document relinquishing her LinkedIn profile to the Second Applicant upon termination of her employment. She also undertook that from now on, she would be working under her married surname, as opposed to her maiden name which she was known by during her employment at the Second Applicant.

[52] In regards to the undertakings made, the issue is whether the Applicants’ stance to reject them is irrational. It was however correctly submitted on its behalf that it is by now trite that the applicant in a restraint of trade dispute should not have to content itself with crossing its fingers and hoping that the respondent party will act honourably or abide by the undertakings that he/she has given[29].

[53] Whether the First Respondent enjoyed a close relationship with Second Applicant’s customers to the extent that it can reasonably be said that she could certainly have them ‘in her pocket’ needs to be determined within the context of her position and scope of employment under the Second Applicant, the frequency and duration of interactions with the clients; her personality; where the contact took place; the knowledge that she gained with regard to the clients’ needs and requirements; the general nature of their relationship (including whether an attachment is formed between them, the extent to which customers rely on the employee and how personal their association is); how competitive the rival businesses are, and whether there is evidence that customers were lost after the employee left[30].

[54] It was common cause that the First Respondent had no prior experience in the recruitment industry when she joined the Second Applicant, and she had conceded having received training. It should thus be accepted that her knowledge, skills and experience in recruitment and placements was gained largely during her employment with the Second Applicant, and at the time of her resignation she was employed as a Senior Recruitment Consultant.

[55] During her employment, she made placements in the Logistics, Supply Chain, Finance and IT industries. Her focus then shifted to placing candidates in the Engineering, Mining, Manufacturing, Civil Consulting and Construction sectors, which the Second Applicant

insists are the main areas of its core business. Over time, the First Respondent became a specialist in the latter fields, was regarded as highly successful, a ‘high flyer’ and even won ‘Consultant of the year’ award within the Group for achieving the highest average targets. According to Hill, the First Respondent became the face of the Second Applicant’s business in terms of her field of speciality, and was allowed to work unsupervised. The First Respondent denied having been left

unsupervised or being the face of the Second Applicant.

[56] Notwithstanding the First Respondent’s denials that she was the face of the Second Applicant, it should however be accepted that over the period of her employment, she had indeed forged strong links with a variety of its customers, and it is my view that she has not demonstrated that she has not acquired the requisite degree of influence over those customers whilst in the Second Applicant’s employ, which influence can be used to the disadvantage of the Second Applicant. This conclusion is reached on the basis of the following;

[57] The First Respondent has every intention of joining the Second Respondent which is a direct competitor of the Second Applicant, and is thus in breach of her restraint undertakings. Furthermore, it is not for the Second Applicant to trust that the First Respondent would not use her customer knowledge/connections to the disadvantage of the Second Applicant in circumstances where on her version, she had access to the Second Applicant’s database containing the names of thousands of candidates and clients; where she had conceded that the Second Respondent also does recruitment in the same industries as the Second Respondent; where on her own version, customers had contacted her in the event of them having a vacancy and she having successfully placed a candidate with them previously; where she had contacted clients in the past to ask them what their views of her service were and had received good reviews; and also where 70% of her business in a particular year was repeat business

[58] In the light of the above factors, I am satisfied that the Applicants have indeed demonstrated that the First Respondent is in a position to build up a particular relationship with the Second Applicant’s customers, to such an extent that when she left its employ, she could easily induce the customers to follow her to a new business, or customers could easily want to do business with her rather than the Second Applicant, thus effectively carrying the customers with her ‘in her pocket’.

[59] I further agree with the submissions made on behalf of the Applicants that in making certain undertakings, the First Respondent

cherry-picked clients or areas she has no interests in in the name of pursuing her rights to apply her skills and knowledge acquired whilst in the employ of the Second Applicant. To conclude on this issue, I am satisfied that the circumstances of this case are such that First Respondent had access to the customers of the Second Applicant’s business, that she was indeed in a position to build up a particular relationship with those customers, with the result that when she left the Second Applicant’s service, she would easily influence those customers to follow her to the Second Respondent at the expense of the Second Applicant. There is therefore no reason why, in principle, the restraint should not be enforced to protect the Second Applicant’s trade connections[31].

Confidential Information:

[60] It is trite that the essence and purpose of any restraint of trade agreement is to prevent the use of confidential information by a former employee to the detriment of the employer. It has been held that it was not necessary to find that the ex-employee did or would actually use trade secrets and confidential information in his new employment, but that is was sufficient if he could do so[32]. For information to be regarded as confidential, it must (a) be capable of application in trade or industry, must be useful; not be public knowledge or property; (b) it must be known only to a restricted number of people or a closed circle and (c) be of economic

value to the person seeking to protect it.[33]

[61] In this case, the First Applicant had conceded that she had access to the Second Applicant’s data base which it was acknowledged was ‘closely guarded’. The fact that such information was closely guarded can only imply its economic value and usefulness to the Applicants. The database is stored on a software package for the recruitment industry called Placement Partner. The software is customised for the Group and the database stored thereon records the details of every single candidate that was approached over the years as well as clients’ information. That information could be used to generate reports such as lists of placements at specific clients and placement according to specific job descriptions, expertise, locality and other search criteria. It was further contended on behalf of the Second Applicant that its database contained all information pertaining to details of existing and prospective clients operating within a particular field, records of companies, schedules containing comprehensive details of the past, present and future personnel requirements, full details of candidates who are seeking assistance, all job specifications and positions and requirements received from clients, advertisements placed by the Group, master files of highly confidential cold-calling sheets containing a list of all calls made to clients, and all standard forms created.

[62] It was the Applicants’ case that the First Respondent was taught to use and was given unfettered access to the Second

Applicant’s extensive database, both computerised and in hard copy, which database had been collated over 16 years at considerable

costs, and which the First Respondent could have printed.

[63] The First Respondent denied that there was any information which was worthy of protection. She contended that she no longer had access to the database or its contents, and that in any event, the information contained on the database can easily be obtained via the social media including Google, LinkedIn and Pnet.

[64] The First Respondent conceded having been exposed to confidential information in respect of the details of customers and information

contained on Placement Partner, which the Applicants contended was the lifeblood of the recruitment industry. That information as stored on the Second Applicant’s database might be within the public domain because it can be gathered from Pnet and/or Linked. However, that information was accessed by the First Respondent in the context of a confidential relationship between her and the Second Applicant and thus deserves protection. It is trite that the fact that information may be in the public domain does not detract from the fact that it remains valuable to its owners and thus protectable, unless a conclusion can be reached that such information is of such a trivial nature that it lacks any value. Central to this case is that the Applicants expended time, resources, skills and labour in gathering and compiling the information, and a dismissive approach by the First Respondent that such information might be in the public domain and /or of little value cannot sustain her claim that it is not worthy of protection.

[65] The fact that the First Respondent had returned all such information or her contention that she did make copies or take printouts of this information and could not possibly remember all the details thereof does not assist her case, and is little comfort for the Applicants. The essence of the Applicant’s case is that the First Respondent was indeed exposed to such information, and the fact that she merely indicated that she could not recall whether she had downloaded it makes it even more critical that it should be protected by means of a restraint.

[66] There are no guarantees in the light of the First Respondent’s dismissive approach that she would not communicate such information to the Second Respondent or its employees. As correctly pointed out on behalf of the Applicants, once it has been established that the First Respondent had access to the Second Applicant’s confidential information (as she had conceded), it should be accepted that it axiomatically follows that in theory, she could disclose that information to the Second Respondent should she desire to do so. Her bona fides in this regard is irrelevant, and her undertakings are small comfort in the light of potential damage that can be done to the Second

Applicant’s business. To this end, it is concluded that the information illustrated elsewhere in this judgment constitutes

confidential information, which is proprietary to the Applicants, and which worthy of protection. The First respondent should therefore be interdicted from using it, given that she had obtained it in a confidential relationship as an employee of the Second Applicant.

Infringement of the protectable interest:

[67] It was submitted on behalf of the Applicants that the employment of the First Respondent by the Second Respondent, within the area of engineering placements, clearly constituted a direct infringement of the Second Applicant’s proprietary interests, and that the very terms of her ‘with prejudice’ tender served only to underscore that conclusion. To this end, it was contended that there was no doubt in the circumstances that her continued employment with the Second Respondent would infringe the Second Applicant’s proprietary interests.

[68] As to whether the First Respondent’s employment with the Second Respondent would infringe on the Applicants’ protectable

interest as already determined is further dependent on the nature of the employment she seeks to take up with the Second Respondent, and the possible risks to the Applicants with that employment. It has already been concluded that First Respondent was a senior employee who was steeped in the business of the Second Applicant, and was thus privy to and possessed of its confidential information and customer connections. The Second Respondent is a direct competitor of the Second Applicant, and the First Respondent employment with the Second Respondent is clearly in breach of the restraint agreement, and would invariably infringe the protectable interests. The undertakings made by the First Respondent as already indicated are small comfort for the Applicants who are entitled to enforce the restraint agreement in the light of the risks posed by the First Respondent’s employment with the Second Respondent. To this end, regard is also had to the circumstances that led to the First Respondent’s resignation from the Second Applicant, the attempts made at amicably resolving the matter, and the options still available to the First Respondent to utilise her skills in other areas not in conflict with the interest of the Applicants. I am satisfied that on the facts and given the First Respondent intent to join the employ of the Second Respondent, her allegiance will invariably be towards her new employer. She would thus be in a position to act to the detriment of the Applicants.

Weighing of interests:

[69] It was submitted on behalf of the Applicants that the First Respondent left the Second Applicant’s employ of her own

accord, that she was able to remain economically active outside of the Second Applicant’s business, and that she remained quite free to utilise her skills and experience in the public domain, even in personnel recruitment, provided only that she does not do so in competition with the Second Applicant in the engineering field. It was further submitted that it was common cause that it remained open to the First Respondent to exercise her skills and abilities in personnel recruitment, and that she had opted to bury her head in the sand and ignored all of the other possible employment opportunities available to her in the recruitment industry, because it suited her to stay in the engineering sector.

[70] Recently in Labournet (Pty) Ltd v Jankielsohn and Another[34] , Prinsloo J held that;

“The question is how does the Applicant’s interests weigh up qualitatively and quantitatively against Jankielsohn’s interests to be economically active and productive. In my view this consideration goes hand in hand with a consideration of the public interest that requires parties to comply with their contractual obligations and that allows all persons to be productive and to be permitted to engage in trade and commerce or professions.”

[71] I am in agreement with the views expressed above and intend to deal with these aspects of the enquiry accordingly. It is trite that a restraint would be unenforceable if it prevents a party after termination of his or her employment from partaking in trade or commerce without a corresponding interest of the other party deserving of protection, and further that a restraint will be considered to be contrary to public policy and therefore unenforceable if it does not protect some legally recognisable interest of the employer, but merely seeks to exclude or eliminate competition. In this case, a conclusion has already been reached the proprietary interest of the Applicants deserves protection, and the only issue is whether the restraint is reasonable in terms of area and duration. It has already been stated that the restraint will be unreasonable if the duration and scope of area sought to be enforced falls outside of the agreement itself, and/or the restraint is broader than necessary.

[72] The First Respondent submitted that the restraint of trade and other undertakings are unreasonable for a variety of reasons. Firstly, the complaint is that the restraint of trade is wide in that the nature, extent and duration of the obligations and restrictions imposed on the her, who at the time was appointed as a junior person at a salary of R10 000-00 per month, created such an extreme and serious restraint on her freedom to pursue her profession. Secondly, she contends that the restraint of trade provides for a situation whereby she may not compete within the entire field of personnel recruitment, within the area of Gauteng and/or within a 50km radius and/or within South Africa. The area of the restraint is therefore not made clear and she needs to wait until she receives Court papers before knowing which of these options are being pursued by the Applicants. Thirdly, she submitted that the same applied with regards to the customers with whom she was not allowed to have dealings, in that the Applicants can, after termination of the First Respondent’s employment contract and upon initiating Court proceedings, decide whether she is not allowed to deal with.

[73] At clause 12.7. 1 of the restraint agreement the First Respondent acknowledged that the restraints contained in the agreement are reasonable as to their subject matter, area, and duration and are necessary to protect proprietary interests of the company and those of its associated companies. To the extent that it was found that the First Respondent falls squarely within the principles of caveat subscriptor, it should be concluded that she is indeed bound by the duration and area of the restraint agreement.

[74] If a restraint of trade clause is however found to be too vague, it will not be enforced. The Court will not enforce a blanket restraint that makes it impossible for an employee to work in any related industry. As shall be illustrated below however, there is no basis for a conclusion to be reached that the Applicants seeks a blanket restraint as the First Respondent is still at liberty to pursue her career in the recruitment industry. To the extent that the Court might be inclined to deem the scope, area and duration to be unreasonable for whatever reason, clause 12.7.7 of the agreement provides that the court having jurisdiction shall be entitled to sever any one or more of the provisions in such a manner as may be elected by the company and/or the court, so as to ensure that the scope of the restraint falls within the court’s definition of reasonability.

[75] In considering whether the Court should exercise its discretion in this regard, it is taken into account that during the engagement

between the parties prior to the First Respondent terminating the employment relationship, it was made clear to the First Respondent

that she was at liberty to pursue her career in recruitment as long as this did not conflict with the interests of the Applicants. To this end, the First Respondent was free to pursue her career in the recruitment industry with the exclusion of any endeavours in the Mining, Manufacturing, Civil Consulting and Construction sectors. As correctly pointed out on behalf of the Applicants, there are a myriad of businesses that offer recruitment services but that do not compete with the Second Applicant. She is thus free to exercise her calling in a variety of sectors outside of the sectors identified by the Applicants, including IT, health care, finance etc.

[76] The intention behind the enforcement of the restraint in the identified sectors is not merely to meant to stifle or eliminate

competition. It is meant to protect the proprietary interest as identified. The First Respondent is thus in no manner constrained

from earning a salary as long as she pursues her career outside of the restraint provisions. Furthermore, and as I understand the

contentions, she unreasonably rebuffed the Applicants’ endeavours in assisting her in securing alternative employment that

would not infringe the Second Applicant’s proprietary interests. Her steadfast stance to work for the Second Respondent and

recruit in the area in competition with the Second Applicant as correctly submitted underlies the Second Applicant’s apprehension of harm.

[77] In regards to the duration of the restraint, the First Respondent contended that even the reduced period of 12 months was unreasonable,

taking into account that the Applicants have not offered any explanation as to why that period was reasonably required to protect

its proprietary interests. The Applicants’ contention in insisting on the 12 months period was that it was only the proprietary interest of the Second Applicant that are sought to be protected; that the period was reasonably necessary for the Second Applicant to appoint a replacement for the First Respondent and for her replacement to foster and nurture relationships in his/her own right with the Second Applicant’s clients, and also a reasonable initial period to protect against the worst excesses of abuse of confidential information.

[78] The basis of linking the finding of the First Respondent’s replacement to the duration of the restraint period baffles me in that it is inconceivable that it would take a well-qualified and suited replacement that long to establish him/herself with clients and to come to terms with the intricacies of the Second Applicant’s business. It is however taken into account that it took the First Respondent a period of about four years to reach the level of acceptable or excellent standards required to make an exceptional recruitment consultant she is. Significantly however, I am in agreement with the Applicants that the period is nonetheless

reasonable where the intention is to protect confidential information which it has been found that the First Respondent was privy to in the course of her employment with the Second Applicant. Other than merely alleging that the period was unreasonable, I do not believe that the First Respondent has advanced any cogent reasons to demonstrate why the period is unreasonable as alleged.

[79] Having had regard to the above, it should be concluded that the restraints of trade does not go further, in respect of their nature, extent and duration, than is necessary to protect the protectable interest of the Applicants. There is no reason to conclude that the restraint agreement is either vague or against public policy, and it is found that the Applicants’ interests qualitatively and quantitatively surpass those of the First Respondent, moreso since the restraint agreement does not constrain the First Respondent from being economically active and productive. The agreement is therefore reasonable in the light of the proprietary interests sought to be protected, and is as a result, valid and enforceable.

Requirements of final relief:

[80] Where a final interdict is sought, three essential requisites must be met. Thus there must be a clear right, secondly an injury actually committed or reasonably apprehended, and lastly, the absence of any other satisfactory remedy.[35] In restraint of trade disputes, the availability of an alternative remedy is a factor that may be taken into account in considering

whether and to what extent the restraint should be enforced[36]. For a clear right to be established, the court has to consider whether there is an interest deserving of protection. If this question is answered in the affirmative, the next question is whether the ex-employee is in a position to threaten those interests. If the answer is still in the affirmative, those interests must be weighed up against the interest of the ex-employee not to be economically inactive and unproductive[37]. The last enquiry has been answered in the Applicants’ favour.

[81] Having considered the facts and circumstances of this case, I am satisfied that the Applicants have demonstrated a clear right to the relief sought, i.e. to protect its proprietary interest in its confidential information and customer connections by way of restraint and confidentiality undertakings made by the First Respondent. That clear right is being infringed or is to be infringed by the First Respondent in breach of the restraint agreement, by taking up employment with the Second Respondent which is a direct competitor to its business. The taking up of the employment with the Second Respondent invariably constitutes a direct if not immediate threat to the Second Respondent’s proprietary interests, and it is apparent that the Applicants have no other alternative remedy of protecting those proprietary interests other than by way of enforcement of the restraint undertakings.

Costs:

[82] In terms of section 162 (1) of the LRA, this Court may make an order of costs according to the requirements of law and fairness. In considering the issue of costs in this Court, and in particular, within the context of restraint of trade applications, the Labour Appeal Court in Trevlyn Ball v Bambalela Bolts (Pty) Ltd held that;

“The normal rule that costs follow the result is not automatically applicable in Labour Court proceedings. The court is required to consider factors like the financial state of the parties, their bona fides and their continuing relationship, in coming to a decision whether to order the unsuccessful party to pay costs. Litigants are not to be deterred from defending or prosecuting bona fide actions for fear of adverse costs orders.”[38]

And,

“Another important aspect which the court a quo clearly did not consider before making the costs order, is the fact that the enforcement of a restraint, technically, involves a constitutional issue. Restraints of the kind being considered, constitute a limitation on a citizen’s right, in terms of section 22 of the Constitution, which, arguably, requires justification (although the procedure employed in Reddy, would suffice in most cases). In constitutional matters, the general rule that costs follow the result, does not apply. In such matters costs orders are generally eschewed out of concern that they may produce a “chilling effect”, in that litigants may be deterred from approaching a court to litigate concerning an alleged violation of their Constitutional rights for fear of being penalised with costs if they are unsuccessful. If constitutional matters are raised or defended in good faith and not vexatiously and the issues raised have merit or are important, like the violation of a right guaranteed in the Bill of Rights, and the proceedings that ensued, resolved those issues, the party complaining of the violation, even if unsuccessful, would, generally, not be ordered to pay the costs”[39].(Authorities omitted)

[83] The Applicants sought a cost order against the First Respondent, including the costs of two counsel. Applying the principles set out in Trevlyn Ball, it is common cause in this case that since her resignation from the Second Applicant, the First Respondent has not gained any income as a result of the interim relief granted on 19 May 2016. Furthermore, I do not hold the view that in opposing the application, the First Respondent had acted frivolously or vexatiously, and she was indeed entitled to oppose the application as the relief sought had implications for her rights as contained in section 22 of the Constitution. Any cost order against her in the light of the conclusions reached will in essence be adding salt to injury. In these circumstances, it is my view that considerations of

law and fairness militate against any cost order against her, and accordingly, the following order is made;

Order:

1. The First Respondent is interdicted and restrained for a period of 12 months commencing from 1 May 2016 until 30 April 2017 within the Republic of South Africa from –

1.1 being employed by the Second Respondent;

1.2 being concerned, engaged, involved or having an interest in, in any capacity whatsoever, in any business similar to or competing with the business of the Second Applicant (including for her own account) in the field of personnel recruitment, that is, personnel recruitment in the Mining, Manufacturing (which encompasses Fast Moving Consumer Goods and heavy industry), Civil Consulting and Construction sectors which is either physically based or which carries out any of its operations or conducts any business in the Republic of South Africa;

1.3 directly or indirectly accepting any benefit from any person or legal entity whether in money or otherwise for the rendering of any service within the Republic of South Africa which is the same as, or similar to, any personnel recruitment or related service provided by the Second Applicant;

1.4 soliciting, interfering with, inducing, enticing or endeavouring to entice away from the second applicant any customer of the second applicant or from providing any information or advice which may or does have that effect;

1.5 whether for her own benefit or for that of anyone else, persuading, inducing, soliciting, enticing, encouraging, procuring or offering to employ any employee of the Second Applicant in any business which competes either directly or indirectly with the business of the Second Applicant; and

1.6 utilising or divulging any of the second applicant’s confidential information and/or trade secrets concerning the second applicant’s business to any person, including the second respondent.

2. The First Respondent will, within 5 days of this order, return all and any of the Second Applicant’s confidential information in her possession or under her control whether such information is stored in hard or soft copy. The First Respondent will thereafter destroy and/or delete, as the case may be, any copies which she may have in her possession or under her control of such information and she will provide the Second Applicant with an affidavit deposed to by the First Respondent identifying the documents that she had so retained (whether in electronic or hard copy format) and confirming that she has disposed of them in terms of this paragraph.

3. Each party is to pay its own costs.

Tlhotlhalemaje, J

Judge of the Labour Court of South Africa

Appearances:

For the Applicants: Adv C Whitcutt SC with Adv C de Witt

Instructed by: Sofos Attorneys

For the First Respondent: Adv. L Erasmus

Instructed by: Du Randt, Du Toit, Pelser Attorneys

[1] Mozart Ice Cream Franchises (Pty) Ltd v Davidoff 2009 (3) SA 78 (C)

[2] Annexure ‘MH7’ to the founding affidavit

[3] [1984] ZASCA 116; [1984] (4) SA 874 (A) at 891 B-C)

[4] As to what constitutes public policy was summarised in Venter v Khan and Others (14185/2011) [2014] ZAKZDHC 48 (3 November 2014) at para [63] as follows; “In summary, clauses that public policy cannot tolerate include those that are ‘draconian’, ‘so gratuitously harsh and oppressive’, that are ‘clearly inimical to the interests of the community’, that are ‘contrary to law or morality’, that ‘run counter to social or economic expedience’ or are ‘unconscionable and incompatible with public interest’. (Authorities Omitted)

[4] As to what constitutes public policy was summarised in Venter v Khan and Others (14185/2011) [2014] ZAKZDHC 48 (3 November 2014) at para [63] as follows;

“In summary, clauses that public policy cannot tolerate include those that are ‘draconian’, ‘so gratuitously harsh and oppressive’, that are ‘clearly inimical to the interests of the community’, that are ‘contrary to law or morality’, that ‘run counter to social or economic expedience’ or are ‘unconscionable and incompatible with public interest’. (Authorities Omitted)

[5] See Experian South Africa (Pty) Ltd v Heyns and Another ([2013] (1) SA 135 (GSJ), where Mbha J (As he then was) held as follows: “The position in our law is, therefore, that a party seeking to enforce a contract in restraint of trade is required only to invoke the restraint agreement and prove a breach thereof. Thereupon, a party who seeks to avoid the restraint bears the onus to demonstrate on a balance of probabilities that the restraint agreement is unenforceable because it is unreasonable”.

[5] See Experian South Africa (Pty) Ltd v Heyns and Another ([2013] (1) SA 135 (GSJ), where Mbha J (As he then was) held as follows:

“The position in our law is, therefore, that a party seeking to enforce a contract in restraint of trade is required only to invoke the restraint agreement and prove a breach thereof. Thereupon, a party who seeks to avoid the restraint bears the onus to demonstrate on a balance of probabilities that the restraint agreement is unenforceable because it is unreasonable”.

[6] 1984(3) SA 623 (A) at 634H-635C, where it was held that; ‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact … . If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court … and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks … . Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers.’

[6] 1984(3) SA 623 (A) at 634H-635C, where it was held that;

‘It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power of the Court to give such final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact … . If in such a case the respondent has not availed himself of his right to apply for the deponents concerned to be called for cross-examination under Rule 6(5)(g) of the Uniform Rules of Court … and the Court is satisfied as to the inherent credibility of the applicant's factual averment, it may proceed on the basis of the correctness thereof and include this fact among those upon which it determines whether the applicant is entitled to the final relief which he seeks … . Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers.’

[7] at 896 A-E

[8] at 893

[9] 1990 4 SA 782 (A) at 794C-E

[10] Act 108 of 1996. Which provides “22. Freedom of trade, occupation and profession. — Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law.” See also Trevlyn Ball v Bambalela Bolts (Pty) Ltd and Another [2013] (9) BLLR 843 (LAC) at para 13 where the Labour Appeal Court held that; “…. The effect of the Magna Alloys‟ decision was to place an onus on the party, sought to be restrained, to prove, on a balance of probabilities, that the restraint was unreasonable (See Magna Alloys: Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) at para 14 at 498E-499). However, because the right of a citizen to freely chose a trade, occupation, or profession, is

protected in terms of section 22 of the Constitution and a restraint of trade constitutes a limitation of that right, the onus may well be on the party who seeks to enforce the restraint to prove that it is a reasonable, or justifiable limitation of that right of the party sought to be restrained.”

[10] Act 108 of 1996. Which provides

“22. Freedom of trade, occupation and profession. — Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law.”

See also Trevlyn Ball v Bambalela Bolts (Pty) Ltd and Another [2013] (9) BLLR 843 (LAC) at para 13 where the Labour Appeal Court held that;

“…. The effect of the Magna Alloys‟ decision was to place an onus on the party, sought to be restrained, to prove, on a balance of probabilities, that the restraint was unreasonable (See Magna Alloys: Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) at para 14 at 498E-499). However, because the right of a citizen to freely chose a trade, occupation, or profession, is

protected in terms of section 22 of the Constitution and a restraint of trade constitutes a limitation of that right, the onus may well be on the party who seeks to enforce the restraint to prove that it is a reasonable, or justifiable limitation of that right of the party sought to be restrained.”

[11] [1993] ZASCA 61; [1993] (3) SA 742 (A) at 767 G-H

[12] At para [16]

[13] (1) SA 472 (W) at 484E

[14] See also Reeves & Another v Marfield Insurance Brokers CC & Another [1996] ZASCA 39; 1996 (3) SA 766 (A) at 776 E-F where the Court held that; ‘The circumstances to which regard may be had cover a wide field and include typically those pertaining to the nature, extent and

duration of the restraint and the legitimate interests of the respective parties in relation thereto. See CTP Ltd and Others v Argus Holdings Ltd and Another [1995] ZASCA 32; 1995 (4) SA 774 (A) at 784 B. Even factors such as the equality or otherwise of the bargaining power of the respective parties may be taken into

account. See Basson's case, supra, at 777 C - D.’

[14] See also Reeves & Another v Marfield Insurance Brokers CC & Another [1996] ZASCA 39; 1996 (3) SA 766 (A) at 776 E-F where the Court held that;

‘The circumstances to which regard may be had cover a wide field and include typically those pertaining to the nature, extent and

duration of the restraint and the legitimate interests of the respective parties in relation thereto. See CTP Ltd and Others v Argus Holdings Ltd and Another [1995] ZASCA 32; 1995 (4) SA 774 (A) at 784 B. Even factors such as the equality or otherwise of the bargaining power of the respective parties may be taken into

account. See Basson's case, supra, at 777 C - D.’

[15] 2008(6) SA 229 (D) at paragraph [50]

[16] Annexure ‘MH7’ to the founding affidavit

[17] In reference to The Law of Contract in South Africa Sir JW Wessels Kt PC BA LLB 2nd Ed by AA Roberts KC MA LLB; Butterworths, Durban, 1951 at para 1167, where the learned author states that; “In order to set aside a contract on the ground of violence or fear, our law requires the following elements: Actual violence or reasonable fear; The fear must be caused by the threat of some considerable evil to the party or his family; It must be the threat of imminent or inevitable evil; The threat or intimidation must be contra bonos mores; and The moral pressure used must have caused damage”

[17] In reference to The Law of Contract in South Africa Sir JW Wessels Kt PC BA LLB 2nd Ed by AA Roberts KC MA LLB; Butterworths, Durban, 1951 at para 1167, where the learned author states that;

“In order to set aside a contract on the ground of violence or fear, our law requires the following elements:

Actual violence or reasonable fear;

The fear must be caused by the threat of some considerable evil to the party or his family;

It must be the threat of imminent or inevitable evil;

The threat or intimidation must be contra bonos mores; and

The moral pressure used must have caused damage”

[18] 1974 (1) SA 298 (C) at 305-306B. See also Experian at para [32], where Court held that; “The law is clear: a contract concluded as a result of duress can be assailed. In BOE Bank Bpk v Van Zyl 2002 (5) SA 165 para [36], the court re-affirmed that the party wishing to rely on duress in order to set aside a contract, must allege and prove that there was a threat of considerable evil to the person concerned, or to his or her family, such as to induce a reasonable fear of an imminent or inevitable evil; that the threat or intimidation was unlawful or contra bonos mores; and the moral pressure used must have caused damage (see also Arend and Another v Astra Furnishers (Pty) Ltd 1974 (1) SA 298 (C) at 306A-B).”

[18] 1974 (1) SA 298 (C) at 305-306B. See also Experian at para [32], where Court held that;

“The law is clear: a contract concluded as a result of duress can be assailed. In BOE Bank Bpk v Van Zyl 2002 (5) SA 165 para [36], the court re-affirmed that the party wishing to rely on duress in order to set aside a contract, must allege and prove that there was a threat of considerable evil to the person concerned, or to his or her family, such as to induce a reasonable fear of an imminent or inevitable evil; that the threat or intimidation was unlawful or contra bonos mores; and the moral pressure used must have caused damage (see also Arend and Another v Astra Furnishers (Pty) Ltd 1974 (1) SA 298 (C) at 306A-B).”

[19] Annexure ‘RA1’ to the Replying Affidavit

[20] [ 2013] (9) BLLR 843 (LAC) at para [19]

[21] In reference to

[22] In reference to Christie, 6th edition, The Law of Contract in South Africa at p181, where the learned author states that; 'It is a matter of common knowledge that a person who signs a contractual document thereby signifies his assent to the contents of the document, and if these subsequently turn out not to be to his liking, he has no one to blame but himself'

[22] In reference to Christie, 6th edition, The Law of Contract in South Africa at p181, where the learned author states that;

'It is a matter of common knowledge that a person who signs a contractual document thereby signifies his assent to the contents of the document, and if these subsequently turn out not to be to his liking, he has no one to blame but himself'

[23] Katzen v Mguno [1954] 1 All SA 280 (T).

[24] Paragraph 66.2 of the Answering Affidavit

[25] With reference to Automotive Tooling Systems (Pty) Ltd v Wilkens and Others 2007 (2) SA 271 at para [9]

[26] At paras 17, 17.1 and 17.2

[27] At para [6]

[28] Experian, at para [20]. See also Den Braven SA (Pty) Ltd v Pillay & Another at para [6], where the Court held that; “In considering the facts of a particular case it must always be borne in mind that a protectable interest in the form of customer

connections does not come into being simply because the former employee had contact with the employer’s customers in the

course of their work. The connection between the former employee and the customer must be such that it will probably enable the former employee to induce the customer to follow him or her to a new business”

[28] Experian, at para [20]. See also Den Braven SA (Pty) Ltd v Pillay & Another at para [6], where the Court held that;

“In considering the facts of a particular case it must always be borne in mind that a protectable interest in the form of customer

connections does not come into being simply because the former employee had contact with the employer’s customers in the

course of their work. The connection between the former employee and the customer must be such that it will probably enable the former employee to induce the customer to follow him or her to a new business”

[29] In reference to Experian at para [22], where the Court held that; “The ex-employer seeking to enforce against his ex-employee a protectable interest recorded in a restraint, does not have to show that the ex-employee has in fact utilised information confidential to it: it need merely show that the ex-employee could do so. The very purpose of the restraint agreement is to relieve the applicant from having to show bona fides or lack of retained knowledge on the part of the respondent concerning the confidential information. In these circumstances, it is reasonable for the applicant to enforce the bargain it has exacted to protect itself. Indeed, the very ratio underlying the bargain is that the applicant should not have to contend itself with crossing his fingers and hoping that the respondent would act honourably or abide by the undertakings that he has given. It does not lie in the mouth of the ex-employee, who has breached a restraint agreement by taking up employment with a competitor to say to the ex-employer “Trust me: I will not breach the restraint further than I have already been proved to have done”.”

[29] In reference to Experian at para [22], where the Court held that;

“The ex-employer seeking to enforce against his ex-employee a protectable interest recorded in a restraint, does not have to show that the ex-employee has in fact utilised information confidential to it: it need merely show that the ex-employee could do so. The very purpose of the restraint agreement is to relieve the applicant from having to show bona fides or lack of retained knowledge on the part of the respondent concerning the confidential information. In these circumstances, it is reasonable for the applicant to enforce the bargain it has exacted to protect itself. Indeed, the very ratio underlying the bargain is that the applicant should not have to contend itself with crossing his fingers and hoping that the respondent would act honourably or abide by the undertakings that he has given. It does not lie in the mouth of the ex-employee, who has breached a restraint agreement by taking up employment with a competitor to say to the ex-employer “Trust me: I will not breach the restraint further than I have already been proved to have done”.”

[30] Den Braven SA (Pty) Ltd v Pillay & Antoher at para [6]

[31] See also Branco and another t/a Mr Cool v. Gale 1996 (1) SA 163 (E):

[32] In Reddy v. Siemens Telecommunications (Pty) Ltd

[33] See Mozart Ice Cream Classic Franchises (Pty) Ltd v Davidoff and Another

[34] (J299/2016) [2016] ZALCJHB 135 (1 April 2016)

[35] See Pilane and Another v Pilane and Another 2013 (4) BCLR 431 (CC) at para 39.

[36] Mozart Ice Cream Franchises (Pty) Ltd

[37] See OH Mthombo (Pty) Ltd v Bheekie-Odhav (LC C177/12) (22 March 2012.)

[38] At para [29]

[39] At para [30]