We’ve all heard of it, but are you aware of how and when Garden Leave can be best utilised …? As an HR Consultant, I asked this question to some of my clients most would opt to use it at the end of the employment relationship ‘if the need arose’ but exactly what that situation would look like is a little blurry…
This got me thinking, maybe it would help to take things right back to basics…
What is Garden Leave?
Garden Leave is a period of time when an employee is instructed to stay away from the workplace – this instruction would normally include the restriction of access to company property, systems and communication platforms such as email or instant messaging. In addition to these restrictions the prohibition of contact (by whatever means) with colleagues, clients or suppliers would come hand in hand.
Generally, for the duration of Garden Leave all contractual entitlements to pay; benefits; and holiday accruals remain in force. However, dependent on the wording of your contracts, an employee may not be entitled to accrue or receive payment of an (individual or Company) performance related bonus or the use of a company car and you may be able to require any accrued holiday to be used during the Garden Leave period. In any event, the employee must be ready and available to respond to any instruction from the employer, meaning that they are not able to carry out any work for any other organisation (including self-employment) and remain under contract.
So why & when can Garden Leave be used?
Garden Leave can be used to mitigate potential risk to the business, usually to prevent an employee from contacting and poaching clients before starting a new job. A common situation where this may arise is when a key team member tenders their resignation in order to take up a role with a direct competitor. Placing this employee on Garden Leave for the duration of their notice period allows you to control the employee’s client contact and exposure to current confidential information, such as client lists, sales pipeline, sales figures etc. in the immediate period before joining the competing organisation – minimising any temptation to take any sensitive information with them. Care should be taken here when exercising Garden Leave for long periods (6 months) and then placing post-termination restrictions on the employee for a further 12 months as such a sustained period may render the post-termination restrictions unenforceable and therefore leave the organisation exposed.
Alternatively, the employee may be seen as disruptive to the organisation while in their period of notice, Garden Leave can be utilised to minimise any negative effect the employee may have on the organisation, work colleagues or clients in the immediate period before the employment relationship ends.
Another way that Garden Leave can be used, is as an alternative to suspension. You may have had a complaint or grievance raised against a key member of your team. As a Company, you want and need to take the allegations seriously and ensure that you launch a fair and reasonable investigation. Due to the nature of the allegations, it would be preferable if the key team member remained out of the business while the investigation is untaken but you feel that by suspending them there are negative connotations attached. Garden Leave could be used instead. It provides the required effect of temporarily removing the employee in question from the business but is a softer approach that is not misconstrued as a disciplinary sanction in itself. If used in this sort of a situation, you should be mindful to keep the period as short as is practically possible before looking to close any associated processes such as grievance or disciplinary.
What if I don’t have Garden Leave in my contracts?
Contract is king… Within the employment contract, there is an implied term that the employer will provide the employee with work and that the employee will do that work. By instructing the employee to remain at home, the employer is breaching this implied term and tribunals are increasingly seeing this approach as a breach of contract.
However, there is no breach of contract when the employment contract contains an express provision giving the employer the right to place an employee on Garden Leave along with a description of the situations when this may be exercised, for example, if notice of termination has been given by either party or during investigatory periods.
Therefore, knowing that it can be hard to predict if and when a period of garden leave is needed, it is advisable to draft clauses allowing its use in all employee contracts as a matter of course.
If you have any queries regarding utilising Garden Leave in your organisation, or would like some support drafting provisions into your employment contracts, we’d love to talk to you. Connect with us at 01621 730 824 or email@example.com.