Garden Leave: Rights & Rules that Should be Made Available

August 19, 20193:21 pm1952 views

Are you witnessing that one of your top performers decides to join competitor’s company? If the answer is yes, then he should be charged for garden leave.

What is garden leave?

Garden leave is a condition where an employee who resigns or has their employment terminated should leave their job or is not permitted to work while remaining on the payroll in order to prevent them from receiving up-to-date information. The said employee should not contact clients, customers, or other colleagues within industry. In addition, as the employee remains employed throughout the garden leave period, at the end of his period, the employee will be terminated and his entitlement will be paid. On the other hand, if during garden leave employee draws his resignation letter back and employer agrees upon his condition, the employee might return to work normally.

See also: 10 Top Employment Law Issues in Asia Pacific

When to make garden leave available?

Garden leave is meant to protect confidential information of a company, therefore, it should especially be pertained when employees are leaving to join a competitor of your company.

Besides, garden leave can also be applied when employees will have their employment terminated at a future date or have provided notice of their resignation to restrain them from communicating important information to competitors.

Garden leave can also be imposed on employees to allow them to find alternative employment or when there is a suspended pending disciplinary action.

Garden leave rights and rules

Employers might / might not enforce garden leave to their employees, unless otherwise there are some terms stated in the employment contract.

When you place your employee on garden leave, he/she remains an employee of your company. Therefore, except there is written, recorded, clear, and well-drafted clause regarding garden leave in an employment contract, employers expose themselves to the risk of claims of contract breach. Hence, you should express garden leave clause under an employment contract. Mark Donovan suggested that your garden leave clause can be written as follows.

“The Employer might place the Employee on “garden leave” for all or part of the Employee’s period of notice of termination. During a period of “garden leave” the Employee will remain a paid employee of the Employer, but the Employer might require the Employee not to attend the workplace, contact any costumers or other employees, or undertake any duties whatsoever.”

The stated employee, nonetheless, might attempt challenge of garden leave clause validity, whether or not it is reasonable. Therefore, concluding the Law Gazette garden leave practice, you might consider the following tips to create well-crafted and reasonable garden leave clause:

  • Create a reasonable time period of your garden leave. The shorter the time, the more reasonable it is.
  • Whether or not the garden leave has a greater negative effect on both employees and employers. If the negative impact is greater, garden leave might not be reasonable.
  • Whether or not the employer has a legitimate interest to protect confidential information by enforcing garden leave. If yes, the clause should be reasonable.

Beyond any stated law above, garden leave can still be enforced to employees without any written expression if employees have in the first place breached their employment obligations of good faith and fidelity, trust and confidence, misusing confidential information, and/or breached fiduciary obligations. 

Read also: Employer’s Guide to Equal Pay Law