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Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad

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The relationship between restraints of trade and garden leave

Yeukai Mupangavanhu

Abstract


The purpose of the article is to examine the relationship between a so-called "garden leave" clause and a post-termination restraint of trade clause in employment contracts, in view of the decision in Vodacom (Pty) Ltd v Motsa 2016 3 SA 116 (LC). The Labour Court grappled with the question of whether the enforcement of the garden leave provision impacts on the enforcement of a post-termination restraint of trade clause. Enforcement of both these types of clauses may be problematic. It can result in unfairness if an employee ends up being commercially inactive for a long period. The author argues that garden leave has a direct effect on the enforcement of a post-termination restraint of trade clause. Accordingly, a restraint of trade will be enforced only if the employer's proprietary interest requires additional protection beyond what is achieved under the garden leave clause.

Keywords: Employment contract; restraint of trade; garden leave; proprietary interest; reasonableness




http://dx.doi.org/10.17159/1727-3781/2017/v20i0a1278
AJOL African Journals Online