An Employee is Able to Choose His Employer when a Proper Restraint of Trade is not in Place

An IT company, Sourceworx (PTY) Ltd, brought an application before the Gauteng High Court in the matter of Sourceworks (Pty) Ltd v Datacentrix (Pty) Ltd (2024/065728) [2025] ZAGPJHC 470 (19 May 2025) to stop its former employee from continuing work linked to Transnet while employed by Datacentrix (Pty) Ltd.

The employee had been working on Transnet’s systems for years through various contractors. In 2021, he joined the employer, which was subcontracted by Datacentrix to provide IT maintenance to Transnet. Their subcontract included a clause preventing either party from poaching the other’s employees.

In November 2023, the employee resigned from the employer after becoming unhappy with his treatment there. Coincidentally, Datacentrix advertised a position the day before his resignation. The employee applied, was chosen from 73 applicants, and joined Datacentrix in December 2023.

The employer accused Datacentrix of breaching the no-poaching clause and demanded the employee’s removal from Transnet projects. After some negotiation, Datacentrix agreed to remove him but refused to pay the R200,000 “compensation” the employer demanded. Despite this, the employee continued in a consultative role at Datacentrix, occasionally advising on Transnet-related matters.

In June 2024, the employer approached the High Court on an urgent basis, seeking an interdict to prevent Datacentrix from using the employee’s services on Transnet projects for 12 months. It also asked for a restraint against Datacentrix poaching its employees, though this claim was later abandoned.

The case was initially struck from the urgent roll but returned in May 2025. The employer argued that Datacentrix had breached its undertaking to remove the employee from the Transnet account and wanted the matter referred to oral evidence.

The Court ruled that there was no binding agreement preventing Datacentrix from employing the employee. The alleged undertaking arose only as part of failed settlement negotiations, and Datacentrix had never intended to be legally bound by it.

Even if it had been binding, the Court found that such an agreement was contrary to public policy. It stressed that companies cannot bargain over an employee’s working conditions simply to satisfy the wishes of a former employer, as this undermines constitutional protections against forced labour and the right to fair labour practices.

The Court also noted that the employer had not demonstrated any irreparable harm from the employee’s continued work at Datacentrix, nor had it shown any protectable interest that justified restricting his employment.

Both the employer’s application to refer the matter to oral evidence and its main application were dismissed. The company was ordered to pay the legal costs of Datacentrix and the employee.

The judgment reinforces that, without a valid restraint of trade, an employee’s right to choose their employer and working conditions cannot be curtailed by agreements between companies.

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