Labournet Holding (Pty) Ltd v Mcdermott and Another (J2793/02) [2002] ZALC 180; (2003) 24 ILJ 185 (LC) (23 October 2002)

Labournet Holding (Pty) Ltd v Mcdermott and Another (J2793/02) [2002] ZALC 180; (2003) 24 ILJ 185 (LC) (23 October 2002)

The court found that Labournet Holdings (Pty) Ltd, while it may have acquired the rights to enforce the restraint of trade clause, does not itself trade and has no protectable interest in the business conducted by its subsidiaries. The business model employed by the applicant, which uses the National Employers Forum to gain unfair and unlawful advantages in the labour law consulting industry, is not a legitimate interest worthy of protection and is contrary to public policy. The restraint of trade clause, insofar as it seeks to protect such interests, should not be enforced. The court also held that Daniel Krynauw was not an employee, and therefore the rule nisi was discharged as regards...

Citation
[2002] ZALC 180
Parties
Applicant: Labournet Holdings (Pty) Ltd; Respondent: Peter McDermott; Respondent: Daniel Krynauw
Court
Labour Court
Jurisdiction
South Africa
Judgment Date
23 October 2002
Case Number
J2793/02
Procedural Posture
Final Interdict Application / Return Day of Rule Nisi; Application for Final Interdict
Judges
A A Landman
Legal Topics
Restraint of Trade, Section 197 Transfer, Contract of Employment, Public Policy, Jurisdiction of Labour Court
Labour Law Commercial and Corporate Restraint of Trade Section 197 Transfer Contract of Employment Public Policy Jurisdiction of Labour Court

Case Brief

Summary, issues, holding and outcome

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Parties

Labournet Holdings (Pty) Ltd

Applicant

Peter McDermott

Respondent

Daniel Krynauw

Respondent

Procedural Posture

Final Interdict Application / Return Day of Rule Nisi; Application for Final Interdict

Legal Issues

  1. 1 Whether Labournet Holdings (Pty) Ltd is entitled to enforce the restraint of trade clause against the respondents.
  2. 2 Whether the respondents are employees of Labournet Holdings (Pty) Ltd for purposes of the restraint.
  3. 3 Whether the Labour Court has jurisdiction to adjudicate the dispute regarding the restraint of trade.

Ratio Decidendi

The court found that Labournet Holdings (Pty) Ltd, while it may have acquired the rights to enforce the restraint of trade clause, does not itself trade and has no protectable interest in the business conducted by its subsidiaries. The business model employed by the applicant, which uses the National Employers Forum to gain unfair and unlawful advantages in the labour law consulting industry, is not a legitimate interest worthy of protection and is contrary to public policy. The restraint of trade clause, insofar as it seeks to protect such interests, should not be enforced. The court also held that Daniel Krynauw was not an employee, and therefore the rule nisi was discharged as regards...