We asked our employees who are married to each other to stop trading at a local club selling food as it is a conflict of interest even though it is on their off days. We also sell food and have a pub and they lurking our clients to go there and support them on their off days. We asked them not to operate in competition, and they understood it but now continue doing it. What are our rights?
In my experience, people seldom leave a social event just to buy food, so it's unlikely that you would be losing any significant business unless that said social club is stationed right next door.
Also, typically a restraint of trade clause in South Africa is almost impossible to enforce as it seen as anti-competitive conduct and would only be enforceable if they are intentionally stealing your clients and they are making and selling the same food you are.
Given the protection employees enjoy in South Africa, firing an employee for selling items that do not use your recipes is almost guaranteed to come with backlash from the Department of Labor or the CCMA, regardless of any restraint of trade agreement you may have with said employees. The repercussions would be amplified greatly if these employees belong to a union.
Best case scenario given the employment issues in South Africa would be to request them to make sure they sell their products (provided it's not the same recipe as the business') in an area away from the workplace.
Something I've noticed in my years of working in foodservice.
- Some people frequent a business because it is convenient.
- Some do it because they like the food (or drink specials, or prices. Basically something that this place has that others don't)
- Some people keep going back to see the people that work there.
The best/most successful employees in the service industry aren't simply the ones who work the hardest. They are the ones who are most charismatic. If people are leaving your location to go visit your employees over at another location, keep in mind that it is the employee they are following. Not the food.
What does this mean for you?:
First and foremost if you fire them, the people who are following them will probably follow them wherever they go next. And they will do it all of the days the employees are elsewhere.
That leaves you with two people who are very charismatic, that you probably don't want to fire, and are passively hurting your business. Now you need to get them to actively help your business. Incentivize them to use their skills to help you grow.
Offer them a promotion. Marketing manager. Director of client relations. Something of Something. Send them out into the world to generate new clients (some of the time. They also need to stick around and help retain new and old clientele. Reiterate that you need them to not be pulling people away from you on their days off. Make it contractual. Do not sneak it on them. That will only force your hand to have to fire them, which we established probably isn't your best option.
The fact is you gave them a direct order - what to do or not to do on their day off, when they are not paid by you, so you have no authority and that direct order counts for nothing.
You can't stop them from selling food at this local club. You can fire them, but then obviously they will work hard selling food at this local club on the weekend, and now on other days as well.
So what you need to figure out before you act: How much are you actually losing in trade on the weekend? Are they competing because they sell food and you sell food and it annoys you, or is this actually costing you money? And then you have to figure out: How much does it cost you to fire them and find new employees, who might need to be trained first, and how much would it cost you if they increase their competing work?