Vodacom in legal triumph over former top exec

Vodacom has won what its law firm is describing as a “precedent setting” legal case against its former chief officer for consumer business, who resigned in December to join rival MTN.

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Vodacom has won what its law firm ENSafrica is describing as a “precedent setting” legal battle against its former chief officer for consumer business Godfrey Motsa, who resigned in December to join rival MTN as one of its top executives.

Motsa resigned on 23 December 2015 to take up the position of vice-president for South and East Africa at MTN Group, effective 1 January 2016.

Vodacom then launched urgent proceedings at the labour court in Johannesburg, seeking to enforce the terms of Motsa’s contract, which included a six-month notice period and a restraint of trade for a further six months.

According to ENSafrica, Vodacom was successful in its application, with the court confirming that Motsa will spend six months on gardening leave until the expiry of his notice period in June 2016 and then may not work for MTN — or any similar competitor — for a further six months in terms of the restraint-of-trade clause.

Judgment was handed down last week. Vodacom confirmed on Monday that it brought the action against Motsa and said legal costs (including that of senior counsel) were awarded against him.

An MTN spokesman declined to comment on what the development means for the telecommunications group or how it intends dealing with the matter or filling the vacancy in the interim.

Motsa did not immediately respond to a call seeking comment on whether he intends taking further legal steps.

Motsa joined Vodacom in 2007. He was appointed as chief officer in April 2015 and entered into a written contract of employment in June 2015. This contract contained the six-month notice period and the gardening leave provision, which entitled Vodacom to require him not to report for duty during the notice period, ENSafrica said.

Godfrey Motsa

Godfrey Motsa

The firm said Vodacom became aware of his discussions with MTN a day before he tendered his resignation.

“Vodacom sought to enforce Mr Motsa’s six-month notice period, and expressly communicated to him that he would be placed on gardening leave until the termination of his notice period on 23 June 2016,” ENSafrica said.

The firm said the decision sets a precedent in that the labour courts have not, until now, had the “opportunity to consider what impact, if any, a so-called ‘gardening leave’ provision may have on the enforceability of a restraint of trade”.

The court found that Motsa “failed to discharge the onus of proving that Vodacom had elected to waive its right to enforce his notice period in terms of his contract of employment”.

“The labour court held that, in such circumstances, there is no reason why specific performance should not be awarded. The labour court accordingly held that Mr Motsa remains an employee of Vodacom until the end of his notice period on 23 June 2016,” ENSafrica said.

It said Motsa argued further that even if the court were to enforce his notice period and find that his engagement with MTN constituted a breach of his restraint undertakings, Vodacom should not be entitled to enforce his restraint undertakings for a further period of six months after the termination of the employment relationship on 23 June.

However, the court found that Motsa “had access to significant confidential and proprietary information and that Vodacom clearly had a proprietary interest worthy of protection (for a period exceeding one year)”.

“On such basis, the labour court enforced Mr Motsa’s restraint undertakings, in addition to, and notwithstanding, the six-month gardening leave period,” ENSafrica said. – © 2016 NewsCentral Media

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  • Dave Baker

    I hope no-one is surprised about this ruling.

    Notice periods are always enforceable and restraints (if reasonable and specific) are usually enforceable. It is an urban legend that they aren’t

  • If senior executives have no ethical standards, how can they expect their subordinates to behave ethically?

  • Stupid stupid stupid. I don’t get how he didn’t see this one coming. Now he’s shot himself in both feet.

  • Muzi Makhaye

    “According to ENSafrica, Vodacom was successful in its application, with the court confirming that Motsa will spend six months on gardening leave until the expiry of his notice period in June 2016 and then may not work for MTN — or any similar competitor — for a further six months in terms of the restraint-of-trade clause.”

    Legalese or bad grammar?… is he out for six months (on gardening leave) plus “further six months” thus making it twelve months?

  • CharlieTango

    Begs the question about MTN HR asking him about his contractual obligations to Vodacom before offering him the job.

  • Kleinfontein

    is one entitled to full normal pay while on gardening leave and perhaps extra bucks while under restrained of trade? if so i wonder what was the rush to join MTN? Greed perhaps

  • McTSA

    Not sure which, but it appears that the 6 months notice period he is obliged to give VC will not be spent in their offices. Some corporates prefer to tell key persons to take “garden leave”, i.e. still on the payroll but you may not come back to the office/work.

    The restraint of trade, which seems fair, prevents him from any work, contract or otherwise, similar to that which he was in.

    So all in, it will be at least 12 months before he can take up his new role at MTN.

  • McTSA

    Without insider knowledge, I wouldn’t be surprised if he did not disclose the conditions of termination to which he is subject.

    The flash of money and/or power can also dull the senses and rational thinking… maybe it was all too much for him 🙂

  • McTSA

    6 months’ garden leave… pure bliss! 🙂

  • Greg Mahlknecht

    And it doesn’t hurt MTN in any way if he got caught, they probably just said “hey, if you’re okay with it, welcome to the family!”

    He’s been at work over a month now, if he was going to divulge secrets, the damage is probably already done anyway.

    I don’t think anyone would put that past MTN after their recent history.

  • Arrow

    Agree to some extend. One of the critical criteria for enforcing it is that it should be fair. Restraints of trade are usually only enforced for very senior positions.
    In a country where unemployment is so high, trying to prove that it is fair for anything under exec level is going to be very very hard.

    In this case it probably was.