Restraint-of-trade payments in South African financial service companies

Abstract

Orientation: The topic of restraint of trade has attracted attention, with significant renewed interest in light of the role it is said to play in contributing to the executive‟s career moves and the protection it offers companies. At the heart of the issue is the perceived unfairness of the contract between the employee signing the contract and the company restraining the employee.Research purpose: The purpose of this study was to describe aspects the restraint of trade within the South African financial services industry.Motivation for the study: The motivation for the study was the development of a deeper understanding of restraint of trade, within the South African context, as the concept became prevalent over the past years with many questions remaining unanswered.Research design approach and method: The research was a qualitative, content study.Main findings/results: The primary finding was that, despite the wide use of such contracts they are not clearly understood, they are still perceived as unfair and are seen as a tool to curb career development.Practical managerial implications: The results suggest that the use of such contracts maybe popular but they are flawed, even though elements such as the period of the contracts and the quantum of payments are known the legal clarity and misunderstanding of these contracts is still an issue.Contribution/value add: The study provides context to Restraint-Of-Trade within a South African framework. It further provides key insight into the perception, misalignment of these contracts to the overall understanding and the aim they are meant to achieve.