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Enforceability of clawback clauses in employment contracts

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Enforceability of clawback clauses in employment contracts

On 19 August 2025, the Johannesburg High Court delivered judgment on the enforceability of a clawback clause. This is a contractual term that makes provision for a company to recover certain monies, bonuses or other incentives that were paid to an employee under specific circumstances. This should be distinguished from a malus clause which requires repayment of unearned benefits or remuneration or commissions if an employment relationship ends prematurely. Both clawback and malus clauses require a “trigger event” before they can be invoked. 

15 Sep 2025 1 min read Employment Law Alert Article

At a glance

  • The decision in Mamelodi Sundowns Football Club (Pty) Ltd v Moira Tlhagale Sport Marketing and Management (Pty) Ltd and Another [2025] ZAGPJHC 844 (19 August 2025) affirms the long-standing commercial stance that clawback clauses can be enforced where they are clearly drafted, freely agreed to, and not contrary to public policy.
  • Employers making substantial upfront payments should ensure their contracts contain robust, enforceable clawback clauses to protect against early termination and unearned benefits.

In the Mamelodi Sundowns Football Club (Pty) Ltd v Moira Tlhagale Sport Marketing and Management (Pty) Ltd and Another [2025] ZAGPJHC 844 (19 August 2025) judgment, the “trigger event” was the resignation of Sundowns’ former coach, Mr Pitso Mosimane four months into a 48-month contract. Sundowns sought repayment of almost R8 million from Mosimane, or his intermediary, TSM. 

The sum represented the portion of the intermediary’s commission which was paid upfront, with both the employment contract and intermediary agreement containing clawback clauses obliging pro-rata repayment if the relationship ended early.

Clawback clauses are not out the ordinary in senior executive employment contracts.

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