Guide to drafting a garden leave clause
Your standard senior employment contract (and directors service agreement) should reserve you the power to put the employee on garden leave when notice is given either by you or the employee.
If your contract does not contain an express power to impose garden leave this can still be implied, but the Court will have to balance the employee’s right to work and exercise his/her skills against your interests in a keeping a key employee who may have confidential information away from your competition by having them on garden leave.
How having the power to impose garden leave can help:
Your employee has resigned giving notice and you learn that he is planning to go to work for your main competitor. You don’t want to pay in lieu of notice and nor do you want the employee in the office day-to-day as that will allow him the opportunity to plan how to poach your clients and maintain contact with them. You put him on garden leave and impose restrictions including a block on him having contact with your clients. This is a way of delaying the employee’s ability to poach your clients and delay his arrival at your competitor.
You have a senior employee who you have been consulting with about her possible redundancy. The employee has threatened a number of claims during the process and you have attempted settlement unsuccessfully. When you confirm the redundancy your options are to make her work her notice (not great given she has made threats) or to pay her in lieu of notice. Another option would be to put the employee on garden leave. Such action usually assists in getting an employee to the negotiating table to agree exit terms which work for both sides even (if you later agree to pay in lieu for the balance of the notice period).
If you need help in:
- drafting a garden leave clause or seeking to impose garden leave where you have no express power to do so;
- exiting a senior-level employee where you have been unable to reach settlement;
- threatening or taking action against a former employee who is poaching your clients;
Please contact David Greenhalgh on 020 3603 2177.
Common Questions Answered
Why do I need a lawyer to review my settlement agreement?
UK law requires independent legal advice to be taken before a settlement agreement can become legally binding. Without it, the agreement is unenforceable. An experienced employment lawyer will ensure you understand every clause and that your interests are fully protected.
How much does it cost to get a settlement agreement reviewed?
Your employer will usually pay for you to get independent legal advice on the terms and effect of your agreement. This is standard practice and is typically written into the agreement itself as a contribution towards your legal costs.
Can my settlement agreement be improved?
Often, yes. David regularly negotiates for increases in value, better exit terms and stronger protections for his settlement agreement clients. Even where an employer presents a figure as “final”, there is frequently room to negotiate.
How long does the process take?
With David, many clients get to sign-off in a matter of days if all they need is advice and sign-off. On urgent agreements David provides a same-day service, so a tight deadline is never a barrier to getting the right advice.
Related Articles
