Is Garden Leave Overrated?

June 02, 2015

Including express 'garden leave' provisions into the contracts of employment of key executives in the UK has long been seen as a key aspect of an employer's armoury in relation to the protection of its business, along with other express terms relating to matters such as confidentiality, intellectual property and post-termination restrictive covenants. Placing an executive on garden leave protects the employer's business by enabling it to exclude the individual from the business for some or all of the applicable notice period - thereby keeping the individual away from clients, colleagues and confidential information - whilst still preventing the employee from being able to begin new employment with a competitor.

Garden leave protection of course comes at the cost of continued salary payments and benefit provision. Its efficacy may also be affected by the length of the relevant notice period and the particular role of the individual. But express provisions entitling the employer to 'bench' an employee are needed to avoid the risk of the employee seeking to argue - if he or she can establish that the individual's particular role entails a right to work in order to preserve their skill set etc - that exclusion from work is a breach of contract entitling them to claim constructive dismissal. A valid claim of constructive dismissal enables the individual to evade the remainder of the notice period and any applicable restrictive covenants.

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