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Article 40/2024

LabourEdge

The traditional approach taken by employers, when introducing restraints of trade agreements, entailed stifling the competition.

However, legal developments that followed essentially amount to only proprietary interests worthy of protection, such as trade connections and trade secrets, could lawfully be protected by means of restraint of trade agreements.

What are the questions to be answered when determining the reasonableness or otherwise of a restraint of trade, recently referred to by the labour court in Shoprite Checkers v Johnson and Others (2023) 44 ILJ 906 (LC); (2023) 34 SALLR 79 (LC)?

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In the Shoprite Checkers judgment, Le Grange J applied the test determined in Basson v Chilwan and Others 1993 (3) SA 742 (A) and further elaborated upon in Reddy v Siemens Telecommunications (Pty) Ltd 2007 (2) SA 486 (SCA) and, in doing so, applied the following relevant questions:

  • question 1: did the one party have an interest that deserves protection after termination of the agreement? – referring to a trade secret or trade connection
  • question 2: if so, was that interest threatened by the other party?
  • question 3: if so, did such interest weigh qualitatively and quantitatively against the interest of the other party not to be economically inactive and unproductive? – with reference to s22 of the Constitution
  • question 4: was there another aspect of public policy having nothing to do with the relationship between the parties that requires that the restraint be maintained or rejected?
  • question 5: did the restraint go further than was necessary to protect such interests?
July 20, 2026

Precautionary suspensions

In the public sector, the Senior Management Service Handbook (SMS Handbook) directly addresses precautionary suspensions and the 60-day time limit.

Clause 2.7(2)(c) of the SMS Handbook provides that ‘If a member is suspended or transferred as a precautionary measure, the employer must hold a disciplinary hearing within 60 days. The chair of the hearing must then decide on any further postponement.’

Regulation 6 of the Local Government: Disciplinary Regulations Senior Managers, 2010 (Regulations) provides for the precautionary suspension of senior municipal employees and Regulation 6(6)(a) provides: ‘If a senior is suspended, a disciplinary hearing must commence within three months after the date of suspension, failing which the suspension will automatically lapse.’

What are the principles governing a determination of the question as to whether or not a senior municipal employee’s suspension automatically lapses in terms of the aforesaid Regulation 6(6)(a)?

Obviously, the answers to the aforesaid question are very relevant in the private sector where, firstly, a collective agreement regulates a similar process or, alternatively, such contractual rights have been created between the parties, to be enforced in terms of s77(3) of the BCEA.

July 13, 2026

In the previous article, we dealt with the consequences of a plant level collective agreement with a definite beginning and end date. We indicated to you that, in line with s23(2) of the LRA, and an analysis of the relevant case law, that, once such a collective agreement reaches its expiry date, it expires and is no longer of any force or effect. In this article, we deal with the scenario where a plant level collective agreement is concluded for an indefinite period and the employer gave notice to terminate same.

What are the consequences when a party to a plant level collective agreement, concluded for an indefinite time period, gives notice to terminate such collective agreement?

July 6, 2026

In terms of s23(2), a collective agreement binds, for the whole period of the collective agreement, every person so bound in terms of s23(1)(c) (the members of a registered trade union and the employers who are members of a registered employers’ organisation who are a party to the collective agreement, if the collective agreement regulates the terms and conditions of employment, or the conduct of the employers and employees) who was a member at the time it became binding, or who becomes a member after it became binding (irrespective of whether or not that person continues to be a member of such trade union or employers’ organisation for the duration of the collective agreement).

What is the relevant case law development as to a plant level collective agreement that has an expiry date, i e does such collective agreement continue to be of force and effect after such expiry date?