In preventing Reddy from holding a job at Ericsson, the court found that the restriction was intended to prevent a person using confidential technologies from using it to the detriment of the employer: the real difficulty is whether a trade limitation clause is applicable or not. In determining whether or not a trade restriction clause is applicable, a court will determine whether the prohibition on non-competition is appropriate. In Magna Alloys and Research (SA) (Pty) Ltd/Ellis 1984 (4) SALJ 874 (A), the Tribunal found that a trade restriction was applicable and legal, unless it was inappropriate. This means that the worker must then wear the supports in order to avoid enforcing the trade restriction. With regard to the determination of adequacy, two fundamental principles are in conflict, namely the principle that everyone should have the total freedom to be negotiable and earn a living as he wishes and, on the other hand, the principle of the intercity of contracts, which means that all contracts must be concluded freely. Home Labour Law “Are trade agreements important to the economy? A trade restriction is a provision within an employment contract that requires that, in the event of a termination of the employment relationship, the worker may be limited to the geographical boundaries and the work he can perform. A trade restriction is imposed by a ban, desired by the employer, which prevents the worker from holding a job and being deterred from holding a job. If a definitive ban is to be made, three things must be defined: (i) there must be a clear right; (ii) an actual or duly recorded injury; and (iii) the absence of other satisfactory remedies. The length of time for which the restraint is applicable; Workers must ensure that the restriction clauses do not have a negative impact on their future employment prospects.
A trade restriction must balance an employer`s right to protect its business interests with a worker`s right to earn a living. The factors that a court considers when deciding whether it is appropriate to exercise restraint: a worker who wishes to be dismissed from a contract likely to restrict trade must be able to convince the court that his right to work outweighs the potential prejudices that his former employer might suffer in the event of the worker`s departure and competition with the former employer on the open market. In a recent end of the case, there was a factual dispute over the existence of trade restriction and a possible hi-jacking of the employer by the workers. The employee acknowledged the creation of a new company in direct competition with the employer. The employer did not obstruct the restriction of the trade agreement and claimed that the workers had destroyed the restriction of the trade agreement. The employer also failed to restrict trade agreements by other agents who would have weighed in on its favour. The material dispute could not be resolved on paper. A trade restriction is an agreement between an employer and a worker or a provision of an employment contract that prevents a worker from being employed by a competitor of the employer or from setting up a business in competition with the employer after the termination of the employment. As a general rule, workers are required to comply with trade clauses after the termination of the employment contract.
However, some limitation of trade clauses may be considered unenforceable. Restriction agreements are widespread in trade and industry in South Africa.