Garden leave may sound relaxing, but the circumstances which call for it are most certainly not.
Employees are usually directed to take garden leave to prevent them, during the notice period, from:
Directing an employee to take garden leave usually only occurs where such right is expressly contained in the employment contract. However, in the absence of express garden leave provisions, courts may imply them into an employment contract for the duration of the notice period.
The key advantages of garden leave are that an employee can be prevented from:
Employees are still employed by the employer during the notice period and therefore must:
An employee is required during the notice period to comply with the employer’s reasonable and lawful instructions, including complying with the employer’s directions not to:
The main disadvantage of garden leave is that an employee is required to stay away from the workplace, but remains on full pay and entitlements (eg company car, insurance etc) during the garden leave period.
If the employer fails to pay the employee their salary or contractual entitlements, a court may find that the employer has constructively dismissed the employee or repudiated the employment contract, allowing the employee to work for a competitor during the notice period. In addition, there is the risk that such repudiation may cause any post-employment restraint of trade to be unenforceable.
There are advantages and disadvantages for employers using garden leave mechanisms to protect their business interests against outgoing employees. Employers should consider whether the benefits of directing an employee to take garden leave outweigh the costs associated with it.
To protect their business interests, employers should:
Posted on: 28 July 2017