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Tuesday 9 December 2014

Garden leave - spending time in the garden?

Employees are put on "garden leave" when their employers want to stop them from performing their regular duties whilst working out their notice period.  During garden leave employers usually want employees to stay at home (in the garden), so they are kept away from customers, and thereby minimise the risk that they might try to persuade customers to follow them to their new employment.

During periods of garden leave an employee is still employed and they remain bound by their contract of employment and their obligations to the employer.  On the other hand an employer is required to continue to pay salary and provide all contractual benefits, eg a company car.

In order for someone to be put on garden leave it's crucial that the written contract of employment contains an express term giving the employer the right to do so.  In the absence of a 'garden leave' clause, an employer would be breaching the contract of employment if they sent an employee home.  One consequence of breaching a contract of employment is that the employee might choose to resign and claim that they have been unfairly constructively dismissed.  Also, if the employer fundamentally breached the contract of employment, they would be unable to rely upon other restrictive provisions in the contract - for example, an employee could resign and leave immediately to join a competitor and be free of any restrictive convenants.

Placing an employee on garden leave during a notice period is a useful tool for an employer when they would like to protect legitimate business interests including goodwill and confidential information.  However, businesses must take care only to place employees on garden leave when they have an appropriate garden leave clause in the contract of employment.

For further information or to make a free initial half house appointment contact David Coward, Head of Employment Law at Sampson Coward in Salisbury on 01722 410664 or david.coward@sampsoncoward.co.uk