Garden leave is the term used when employers ask their employees not to attend work during their notice period – ie, 'go home and tend the garden'.
Can any employer use garden leave?
Employers must expressly include the right to use garden leave during notice. If there is no express right, the courts have held that some employees do have the implied right to work during their notice period and thus putting them on garden leave will be a breach of contract. This applies to employees whose remuneration is dependent on working or whose skills would diminish should they be put on garden leave for the length of the notice period.
In a manufacturing environment, provided the employer promises to make payments for lost commission or team bonuses, using the implied right to garden leave is less likely to be an issue in relation to employees who have less than three months' notice. The only area for concern may arise in relation to R&D employees.
Restrictions during garden leave
Some employers believe that garden leave should be akin to home imprisonment and try to stipulate that the employee must be available near his/her home phone during all normal working hours. This is not reasonable: if an employer does not require an employee to work his notice period then it can only ask that an employee be available on reasonable notice.
Employees are not entitled to work for their new employer during the garden leave period.
Why do employers use garden leave as opposed to pay in lieu?
Garden leave provisions are arguably more effective than any form of post-employment restrictive covenants. During garden leave, the employee continues to owe duties to his existing employer and cannot compete against it. Should an employee be caught working for his new employer, the existing employer is entitled to apply for damages against both the employee and the new employer.
