Annexures to the employment contract

An employment contract is the most important document in the workplace and defines the terms and conditions as agreed upon between the employer and employee. It regulates the employment relationship and by including proactive clauses and annexures in the employment contract, the employer is better positioned to address and limit disputes that may arise from this relationship.

In addition to the employment contract, the employer can add annexures to further protect the business going forward. Typical annexures that form part of the employment contract include a restraint of trade and a confidentiality agreement. These agreements are crucial for more specialised business activities to prevent competition and protect confidential information, unique methods and procedures, patents, etc.

A restraint of trade is an agreement between the employer and employee that prevents an employee from using his/her work, aptitude or training in the same field as the employer for a specific time period and in a specific area, after employment with the current employer came to an end. The restraint of trade seeks to protect the interests of the employer with specific reference to confidential information, clients, and goodwill (the business’s good name).

Aspects to consider for a restraint of trade to be successfully enforced:

• What: What are the specific tasks, aptitude, work or field in which a former employee cannot become involved.
• Where: Refers to the geographical area.  Take note that there should be a connection with the specific area.
• Time: Refers to the period after the employee has left employment, during which the restraint of trade will be valid. This must be a reasonable period of time.

Confidentiality agreements are legal contracts that protect the employer’s confidential information and trade secrets. These agreements require employees to maintain confidentiality and not disclose any sensitive information to third parties. Confidentiality agreements can be used to protect various types of information, such as financial data, business plans, client lists, product designs, etcetera. These agreements can also be used to ensure that employees do not use confidential information for personal gain or to benefit their new employer after leaving the business.

These types of agreements also serve as a deterrent for employees not to incriminate themselves in these actions knowing that they may be subject to legal action. These agreements are enforceable in court, provided they are reasonable and do not place unnecessary restrictions on the employee’s ability to work and earn an income.