Q&A – 24 October 2016
Restrictive clause in employment contract
I am a chef working in a leading Dar hotel. My employment contract states that I cannot work for any competitor for a period of 24 months nor can I open my own business for the same period. Recently due to the downturn in business I have been released from work and I got a job with another hotel. My former hotel has written to me that I stop working in my new job or they will sue me and report me to the police. This is a very large and influential hotel owner but these are tough times and I need to survive. What should I do?
UI, Dar
There is nothing to worry and you need not do anything. Even though you have signed the employment contract, the clause in your contract in as far as not being able to work elsewhere is illegal as it is in restraint of trade. Of course, if your former employer is willing to pay your salary for the 24 months when it expects you not to work elsewhere, which we doubt they will agree to, this clause will not stand in a Court of law, and unless you have not given us other relevant information, you can state this to your former employer.
As for your former employer being large and influential, the law looks at all equally and this fact has no bearing on the matter. Continue your cooking!
Charter of aircraft under tax laws
I am a charterer of aircraft and have leased on a long term to a certain Tanzanian operator. I wish to know whether there has been any change of tax law that will affect my rights over my aircraft, and how I can circumvent this?
PP, Europe
Under section 69 of the Tax Administration Act 2015, and to protect Government revenue, a taxpayer who charters an aircraft or ship under a charter for a period exceeding three years shall be treated as the owner of the aircraft or ship during that period, and the captain of any aircraft of ship shall be treated as being in possession of the aircraft or ship.
This section implies that the charterer or lessee of the aircraft that is leased for a period exceeding three years, may have the aircraft seized by the tax authorities for the charterers or lessees personal tax liabilities as is deemed to be the owner of the aircraft or ship.
There is no provision for such taxpayers who enter into leases shorter than three years and you are guided accordingly to enter into such shorter leases to protect your aircraft.
Misleading fat free advertisement
I have been in the restaurant business for the last 30 years. Six months ago, another restaurant has opened next to me whose name is Kula Chakula bila Mafuta Restaurant (in English come eat fat free food restaurant). The restaurant has its name as fat free food restaurant but sells deep fried chicken, chips, chips mayai and everything that has fat in it. I do not mind competing with the restaurant but the name that they are using is creating confusion amongst people who end up going there believing that indeed the food is fat free. Is this name not misleading to people and what can I do about it? My second question is can a company after registration change its name?
AP, Dar
The Companies Act does come to your protection as in if in the Minister of Trades and Industries opinion the name by which a company is registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, he or she may direct it to change its name.
If the direction is not challenged in Court must then be complied with within a period of 6 weeks from the date of the direction or such longer period as the Registrar of Companies may think fit to allow.
The law further states that the company may, within a period of 3 weeks from the date of the direction, apply to the court to set it aside; and the court may set the direction aside or confirm it and, if it confirms the direction, shall specify a period within which it must be complied with. If a company makes default in complying with a direction under this section, it is liable to a fine and, for continued contravention, to a default fine.
Our advice is for you to write to the Minister of Trade and Industries, explaining the situation and stressing the harm that in your opinion this misleading name is causing to the public.
We answer your second question in the affirmative in that a company may by special resolution and with the approval of the Registrar signified in writing change its name. If the Registrar refuses to give his approval, he shall give his reasons. The registrar shall enter the new name on the register in place of the former name, and issue to the company a certificate of change of name, and shall notify such change of name in the Gazette.
It must be noted that a change of name by a company under any of the circumstances above shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.