A discussion surrounding restraint of trade in employment law.

Abstract

This dissertation seeks to critically examine the restraint of trade doctrine in South African law. Section 22 of the Constitution, 1996 guarantees every citizen the right to not only choose a trade, profession, or occupation, but also to practise them. However, in terms of section 36 of the Constitution, the rights in the Bill of Rights are not absolute. Restraint of trade provisions are incorporated into an employee’s employment contract by the employer, and has the effect of limiting the employee’s free exercise of his/her chosen trade, or profession. An employee who is bound by a restraint of trade cannot compete with his/her employer during the employment relationship and after its termination. The dissertation will explore the enforceability of restraint of provisions in South African law by tracing its history of enforceability in South African law, defining a restraint of trade provision and discovering the reason why such a provision exists, the implications of its incorporation, its status in employment law, as well as contentious issues which arise in respect of such a provision. The dissertation also articulates the requirements which must be met in order for a restraint of trade provision to be upheld by the courts, and the current law on restraint of trade. Garden leave clauses have not been considered by South African courts before February 2016. Garden leave primarily originated from English law and employers, especially in the financial sector have been incorporating them into their employees’ employment contracts. This dissertation will investigate the new concept of garden leave in South African law, by considering its origins, definition, and its applicability in South African law.