Garden Leave – Overview

A garden leave clause is a specific clause in an employment contract that allows an employer to require an employee to remain away from the office during their period of notice. Without such a contractual right it can be very difficult to lawfully prevent an employee attending the office.

Garden leave arguably provides much greater protection than post termination restrictive covenants. As the employee is still employed he is still subject to the remaining provisions in his/her contract such as implied and express duties of good faith, and is also required to carry out reasonable management instructions. Therefore if the employee is instructed not to communicate with clients or other members of staff, yet they breach that instruction, it is a relatively simple claim against them for damages and an order (an injunction in urgent matters) preventing them from benefiting from that breach.

The employment contract continues throughout gardening leave and the employer remains under an obligation to perform all the terms of the contract including the payment of salary and the provision of all contractual benefits. There is debate whether certain benefits can be excluded during garden leave (such as bonus) if there is specific provision in the contract. The danger is that such a provision will put the employee at a detriment and the employee will then claim that there has been a breach of trust and confidence entitling him/her to resign and claim constructive dismissal. In these circumstances the protection of garden leave is lost and the enforceability of the restrictive covenants is brought into question.