Is your restraint of trade enforceable and at what cost?

It appears to be the new way of doing business in South Africa that more and more employers are trying to enforce restraint of trade agreements against former employees. This may be a sign of the times where due to the current economic climate not only is everyone tightening their belt but they are also trying to find protecting their income from being attacked unlawfully or unfairly. 

Our Constitution however protects everyone from being deprived of a right to earn an income. Section 22 of the Constitution provides that “Freedom of trade, occupation and profession: Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law”.

In other words whilst you have the Constitutional right of freedom of trade this is not an absolute right and this right may be limited. This means that the parties themselves are entitled to restrict or limit these right themselves subject to such limitations not impinging upon a party’s Constitutional rights. 

Further “freedom of trade” is also limited in terms of South African common law where a person (employee) may not compete unfairly against another (employer) by using information/IP/trade secrets etc. That is a former employee may not use this unfair advantage gained as a consequence of the employment relationship to compete against the employer.

The Competition Act no. 89 of 1998 provides for various prohibitions on anti-competitive conduct, restrictive practices such as price fixing, predatory pricing and collusive tendering and abuses by dominant firms for example where such firms have a market share of 35% or more.

We were recently involved in exactly such a matter where the employer instituted action against the former employee to enforce a restraint of agreement and also claimed unlawful competition* against a former employee which once again highlighted the importance of knowing and understanding your legal rights before entering into any such agreements. This applies equally to employers and employees. 

Don’t glibly present and/or sign these agreements without first obtaining legal advice as there are many legal principles involved as well as the constantly changing legal landscape. 

Don’t risk it is simply not worth the costs and aggravation and sometimes the devastating consequences of been deprived of or severely limiting your right of freedom of trade.

* Should you wish to read the judgment in the matter (RLWA (Pty) Ltd v  T McDuling case no: 56595/2019) a copy is available on our website 

NB: Please note that this article is for informational purposes only and not for the purpose of providing legal advice. Should you require more information on this topic or any issue arising out of this please contact Allardyce & Partners on 011-234 2125 or

Scroll to Top
Scroll to Top