SA No Competition Clause

[rkk]

Hi All

I am working for company X in SA which is developing a project of Producing energy by using fossil fuel . I am still in probation period with company X
I got another offer from a company Y which is located in WA and planning to produce energy via Renewable sources.

No competition Clause stated : You must not during your employment or within after 3 months of employment end, as a contractor or employee - carry on or be engaged in or associated with same business competing with our business. Business competition with our business means here is following.
Actually competing with any part of our business which you were/are involved
In a position where it might be reasonably be expected to became such a competitor in the foreseeable future.

Now as the end product ( Energy / Power ) is same, Are they competitor to each other ???
Based on above stated clause will it be enforceable in my case, as I will be changing the state??
Pls advise .

 

[Paul Cott]

Hi rrk, I would say that on the brief bit of information provided, the 2 companies are not in competition however other people's view may differ and there are many other factors that go into this such as what markets they operate out of and who their customers and or potential clients come from.
A restraint against competition per se is prime facie void however if you have signed the contract with the clause in it, it is valid and enforceable unless and until set aside. Also, the duration of the restraint is very important as is the time frame of the restraint.

 

[Tim W]

I agree with @Paul Cott above.

I would suggest an additional "it depends"... and that relates to the nature of your employment.
If you are a traditional PAYG employee, or if you are a (sham) contractor,
then any clause may be less likely to be enforceable.
Further, if you are not an especially senior worker (even if highly qualified and doing technically complex work),
then your former employer might find it hard to enforce such a clause.

 

[Rod]

... and the other consideration in your favour is any employment contract clause preventing you from earning a living is also prima facie void.

Keep in mind any prohibition on the solicitation of clients will likely be enforceable.

 

[Tim W]

Keep in mind any prohibition on the solicitation of clients will likely be enforceable.

Agreed. This is important.
You are free to state the bare fact that you are changing jobs,
but any active attempt to take clients with you, may become a problem.