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Legal Terms - garden leave clause
A provision in an employment contract stipulating an extended notice period during which the company compensates the employee fully while exempting them from workplace attendance. Employers utilize such clauses to protect trade secrets and, more significantly, to inhibit a highly talented person from departing and promptly engaging in employment with a competing firm. An employee intending to resign may be mandated to undergo "garden leave" to legally terminate their current contract. During the duration of garden leave, an employee will be bound by all standard contractual obligations. Employers regard the utilization of such clauses as a costly although typically dependable substitute for conventional restraint of trade clauses. These clauses may be enforced by injunctions without facing some challenges associated with restraint of trade clauses, which are notoriously complex to create and implement. Nonetheless, the court may decline to enforce a garden leave clause (William Hill Organization v Tucker [1998] IRLR 313 (CA)). Alternatively, an employer may impose garden leave on an employee when deemed appropriate, despite the absence of a relevant phrase in the employee's contract (Christie v Carmichael [2010] IRLR 1016 (EAT) (Scot)).
A provision in an employment contract stipulating an extended notice period during which the company compensates the employee fully while exempting them from workplace attendance. Employers utilize such clauses to protect trade secrets and, more significantly, to inhibit a highly talented person from departing and promptly engaging in employment with a competing firm. An employee intending to resign may be mandated to undergo "garden leave" to legally terminate their current contract. During the duration of garden leave, an employee will be bound by all standard contractual obligations. Employers regard the utilization of such clauses as a costly although typically dependable substitute for conventional restraint of trade clauses. These clauses may be enforced by injunctions without facing some challenges associated with restraint of trade clauses, which are notoriously complex to create and implement. Nonetheless, the court may decline to enforce a garden leave clause (William Hill Organization v Tucker [1998] IRLR 313 (CA)). Alternatively, an employer may impose garden leave on an employee when deemed appropriate, despite the absence of a relevant phrase in the employee's contract (Christie v Carmichael [2010] IRLR 1016 (EAT) (Scot)).
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