Paying someone whilst they do their gardening? Surely that can’t be right! Why would organisations consider putting someone on gardening leave when budgets are already tight? Does this concept still have a place today or should it remain in the 1980s, with its use in Yes, Prime Minister, making it a more widely recognised term? The short answer is, yes, it still has its place and can provide valuable protection for organisations; however, let’s explore exactly what Garden Leave actually is, its benefits and some areas to consider when enforcing it.
When an employee is leaving a job, either by way of resignation or the termination of contact, the employee is instructed not to attend the workplace or perform any duties, but remains a fully paid employee of the business for the full period of Garden Leave, bound by the terms of the contract of employment.
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Garden Leave is commonly used for strategic reasons to protect the business and keep the employee away from key relationships, such as employees, customers, suppliers. Another reason for Garden Leave is to prevent the employee from accessing confidential and sensitive information.
The employee is still bound by the terms and conditions of their contract, including confidentiality throughout the period of Garden Leave. It also means they are unable to enter into a contract with their new employer until after their actual termination date.
The period of Garden Leave aims to keep the employee out of the marketplace (either with a competitor or setting up on their own) for long enough to allow the business to get its house in order, for a period of handover, to enable their successor to establish key relationships with customers and suppliers and so that any sensitive information that they may possess becomes out of date or less significant.
Things to consider
- Salary – The employee will continue to receive their salary for the period of Garden Leave
- Benefits – Benefits such as holiday entitlement, private medical, company car (for private and business use) will need to remain in place throughout the period of Garden Leave, until the actual termination date
- Tools of employment – Company equipment such as a laptop or mobile phone, which are used purely for work related activities, may be retrieved from the employee during Garden Leave. However, this will depend on whether the employee will be required to carry out any work-related activities whilst they are on Garden Leave.
- Breach of contract – Whilst a clause in the contract is not a legal requirement, placing someone on Garden Leave without an express term may be considered a breach of contract. Care must be taken to consider the impact of placing someone on Garden Leave, particularly where part of the employee’s remuneration is dependent on their work, such as commission and bonuses.
- Challenge – Employees may challenge Garden Leave placement, especially if they are eager to start afresh and join their new employer. Some may even decide to throw caution to the wind and commence employment regardless. The next step must be considered carefully. You could begrudgingly let the matter pass unchallenged – however, this may give the green light to other employees to do the same – or you could sue for damages, a potentially lengthy and costly process.
In order that both parties are crystal clear about what is and is not allowed throughout the period of Garden Leave, it is recommended to detail such provisions within the contract of employment. And remember, from 6 April 2020, in accordance with the Good Work Plan, a written statement of terms (contract of employment) is a day one right for employees (this replaces the obligation for employers to provide a statement following the first two months of employment).
For more help on ensuring your contracts of employment provide protection for your business and peace of mind for you, please contact us and speak to a member of our friendly HR team, who will be happy to help.