What happens if one of your employees quits and goes to work for one of your competitors? Is there anything you can do to protect the interests and sensitive information of your company? Garden leave is probably the answer to this concern. This type of leave policy does not force employees to spend time gardening. Instead, it is a simple metaphor to define a circumstance in which an employee is required by the employer to be absent from work for the entirety or a significant part of the notice period. Here is what you need to know about a garden leave policy.
Garden leave refers to a workplace practice in which an employee who has resigned, been made redundant, or been dismissed is instructed by the company not to access the workplace or do any activities for the duration of their notice period. Simply put, an employee who resigns or has their employment terminated is not allowed to work, but remains on the payroll. The individual will be contractually retained as a person employed by the company during this type of leave, but they will be kept out of the business. The employee should not contact clients, customers, or other colleagues within industry. This can be a useful approach for a company to help ensure that an employee does not use confidential material or organizational resources to benefit their new employer.
Garden leave is actually useful when the employer is worried that any post-termination restrictions will be difficult to enforce against the employee. The availability of a this leave clause in executive employees’ contracts can also discourage competitors from powerful influence members of staff in the first place. Other several business and legal advantages are:
Given the substantial benefits of garden leave, it may also have a number of negatives for an employer, not the least of which are the costs associated with keeping the departing employee on contract. Other cons of this leave include:
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, this 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.
A period of Garden Leave must exceed the employee’s regular notice period and may be invalidated if it exceeds six months, since an Employment Tribunal may rule that this period is more than needed to sustain the business’s interests. While including a garden leave clause in your employment contracts is not required, putting one alongside restriction of trade clauses may guarantee that you are legitimately instructing an employee to take this leave. Before asking an employee to take this type of leave, it is essential to know company obligations and responsibilities. If you get it wrong, it might have major ramifications for your business, such as a breach of contract or the employee suing you.
When you place your employee on garden leave, he/she remains an employee of your company. Therefore, unless there is written, recorded, clear, and well-drafted clause regarding this leave in an employment contract, employers expose themselves to the risk of claims of contract breach. Hence, you should express this type of 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 this leave period, the Employee will remain a paid employee of the Employer, but the Employer might require the Employee not to attend the workplace, contact any customers or other employees, or undertake any duties whatsoever.“
The stated employee, nonetheless, might attempt to challenge the validity of the garden leave clause, 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:
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.
Employers should use extreme caution when maintaining an existing employee under contract if doing so will strain the company’s financial resources. When opting to place an employee on garden leave, they should always take caution, evaluating the benefits and drawbacks of keeping the departing employee away from the business while keeping them under contract.