Employment Law Partner Paul Maynard discusses recent developments in garden leave.
Some employers struggle to understand their options when an employee hands in their notice. In most cases, their options are limited to one of the following:-
- Requiring the employee to work out his contractual notice, which may not be ideal if the employee is going to work for a competitor and you wish to limit their access to your customers, staff or confidential information.
- Making a payment in lieu of their notice period, may be even worse as the employment will be terminated immediately and you will have to pay the employee a lump sum to cover their notice period, which could be a windfall to the employee if they already have somewhere else to go.
- Placing the employee on garden leave for the duration of their contract, requiring them to stay away from work (perhaps in the garden) or allocating them different duties (such as a handover project). Garden leave is conditional upon the employer continuing to pay the employee all the time they are ready and willing to work for your business.
Twinned with professionally drafted, reasonable post-termination restrictive covenants, a garden leave clause can be one of the most effective measures you can take to protect your business from unlawful competition by departing employees.
The circumstances and principles under which the courts will enforce a garden leave clause and indeed the circumstances in which an employer can seek garden leave without an express clause, are fully explained in our comprehensive briefing note on the subject, which has been fully updated with details of the most important decisions in this constantly developing area of law. These include:-
- An example of an employer enforcing a garden leave clause whilst at the same time refusing to pay the employee, who had stated he was unwilling to work during his notice period.
- Clarification of the circumstances in which an employer may place an employee on garden leave, for reasons other than the risk of competition, for example in order to make cost savings.
- An example of the court enforcing garden leave in a competition case for a period of 12 months.
Paul Maynard is a partner and head of Employment Law at Gaby Hardwicke. He is a recognised specialist in all aspects of employee competition and on the protection of business information, is regularly instructed on such cases and has been involved in some of the leading cases on the subject. Other briefing notes on this subject can be viewed on or downloaded from our website.