The right to send an employee on "Garden Leave"

31st August 2010 The Employment Appeal Tribunal has recently given a ruling clarifying the important question about the ability of an employer to send an employee on "Garden Leave".

The concept of "Garden Leave" is well established. This is the name given to the situation where an employer instructs an employee to stay away from work, not to contact colleagues or clients, for a certain period, during which that employee will continue to receive his/her pay and contractual benefits and continue to be an employee of the business. This is a way of limiting the opportunity for an employee that is under notice from poaching clients from his/her employer, or from being disruptive in the workplace. 

Normally the right to send an employee on garden leave will be set out in the written contract of employment. The recent case of Christie v Johnston Carmichael indicates that this right can exist without being spelt out in the written contract, unless the employee in question can show that he/she has a "right to work" and/or would be "de-skilled" by staying away from the workplace.

Established cases indicate that in certain professions a right to work may be established, such as where it is essential that the employee is able to continue the practice of the profession in question in order to retain his/her skills and career. This case in the Employment Appeals Tribunal shows that only a narrow group of professions or businesses are likely to fall into the exception of the right of the employer to send it's employee on garden leave.

This case concerned an individual that had qualified as a member of the Chartered Institute of Taxation. After qualifying he had sought an increase in salary and specialist tax work from his employer. The employer could not provide that work, so the employee resigned, claiming constructive dismissal. The employer told the employee that he would not be required to attend work during the notice period, and placed him on garden leave. He was instructed to refrain from contacting clients. Despite the instruction he was given, the employee did contact his clients. The employer then told the employee that he could be summarily dismissed  because of the contact he made to clients in direct contradiction of the instruction they had given him.  The employee treated this response as bringing his employment to an end.

In the Employment Tribunal the case of unfair dismissal, brought by this employee was rejected. The Tribunal found that during the notice period (ie the three months notice he gave when he resigned) he could have carried out study to keep him up to date in his field of work. He had continued to receive pay and benefits from his employer- consistent with still being an employee for that period. Despite the direct instruction the employee had contacted clients. The Tribunal concluded that the terms of the letter from the employee, in which he said that he treated his employment as being at an end was not a constructive dismissal. The employee had been under notice, but legally on garden leave. The Tribunal ruled that he could keep up his skills with private study in the notice period, and there was no "right to work" in this case. The employer had been entitled to send the employee on garden leave, even without an express contractual clause specifying that right.

This case shows that there will usually be a right to send an employee on garden leave, if required. However, we recommend that in order to limit the chance to challenge this, the employer should include an express garden leave clause in the contract of employment for the employee in question. This can be extremely useful in protecting the client and staff of the employer, and can clarify precisely what the employee can and cannot do in the garden leave period.

If you require further help or advice on this matter please do not hesitate to contact us.