The relationship between restraints of trade and garden leave
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
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright in all material published in PER/PELJ vests in the author, provided that authors grant, by submission of their contributions, permission that their contributions may be shared and adapted without restriction. An author furthermore agrees that the same contribution may not be published elsewhere without the written permission of the editor.
Anyone gaining access, electronically or otherwise, to a contribution to PER, may quote from such contribution, use the intellectual content thereof, share and adapt it, but subject to the following conditions:
you must give appropriate credit, provide a link and indicate if changes were made; and
the copyright of the author(s) may not be infringed in any way.