4. Roban Electronics is a rival software manufacturer and is one of CompTac’s ma

Question

4. Roban Electronics is a rival software manufacturer and is one of CompTac’s major competitors. Roban has been trying to convince one of CompTac’s key employees, Jim Baxter, to come to work for Roban. Roban knows that Baxter has a written employment contract with CompTac, and that Baxter would breach this contract if he went to work for Roban before his contract with CompTac expires. Assume that Baxter does breach his contract and goes to work for Roban, and the departure of this key employee causes CompTac to suffer substantial losses due to delays in completing new software. Can CompTac sue Roban to recoup some of these losses? If so, explain what CompTac’s cause of action would be and why.

Explanation / Answer

Under the employment contract signed by Jim Baxter and CompTac, few mandatory clauses would have been observed to protect CompTac in situation like this where a key employee leaves in the middle of the stipulated period.

Case:

If Jim wants to quit CompTac to join Roben then Jim should extend a notice of leave prior to his new joining and serve the company for a minimum period as stated previously in the contract so a new employee with similar or better talent can fil Jim’s position. If Jim fails to notify CompTac about his departure before then CompTac can deduct his salary or even impose a penalty. Under Section 37(1)(c) of the BCEA is clearly states that an employee must serve the notice period but any part of th clause can be omitted if the employee pays in lieu.

If CompTac given the importance of the position Jim held is willing to receive payment from Jim to join any new company of his choice, then CompTac should let him go without any damages claim that may occur for Jim’s absence and also provide Jim with a certificate of service.

All in all it depends on CompTac what measures the company should take based on the importance of Jim’s position and any competitive advantage Jim offered to CompTac, either by receiving payment from Jim or any obligations as previously signed between Jim and CompTac.

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