A garden leave provision is a term in a Contract of Employment where an employee is not required to attend work and is free to stay at home and look after the garden, hence the term “garden leave”.
A garden leave clause therefore stipulates that the employee must not attend at the company premises for work nor contact customers/clients. Since the employee is still employed, he/she is bound by the other terms of the contract such as the duty of loyalty and confidentiality and receives pay and all other benefits.
An employer would wish to consider invoking the garden leave provision immediately on giving or receiving notice of termination of employment. The usual concern is that the employee may be going to work for a competitor and the employer may not wish the employee to continue working at the company premises.
Advantages of garden leave for the employer
- The employee will no longer have access to sensitive information especially if all passwords are immediately changed.
- The employee will not be able to copy documents for use in future employment.
- The employee will not be allowed to contact customer / clients and if he / she does so, this will be a breach of contract.
- The employee’s salary during the notice of termination can be paid in the usual way with statutory deductions thereby assisting cash flow as opposed to paying a lump sum by way of salary in lieu of notice.
Difficulties with garden leave for the employer
- The use of garden leave provisions must be exercised in a reasonable way. An aggrieved employee may ask the Courts to rule on whether the employer is acting reasonably in invoking garden leave or claim that the length of the garden leave period is excessive. The Courts have decided that employers should not be given protection beyond what is necessary and consideration is given to the need for employees to maintain skills by exercising them in the workplace. Thus, there are certain industries such as the IT industry where an individual may have great harm done to their career if they are excluded from the workplace for even a short period of time.
- The employee may well have already taken documents in anticipation of being excluded from the premises.
- In the modern age of communication, it is difficult to monitor whether an employee is in breach of the garden leave provisions. To all intents and purposes, an employee may be sitting in his/her garden but using a laptop to communicate with key personnel. It is also difficult to know whether other employees are contacting them either during working hours or socially outside.
Employers should therefore consider carefully in each individual case whether on giving or receiving a notice of termination of employment, the employee should either work out the notice, be put on garden leave or have the employment terminated immediately and pay salary in lieu.