‘Garden Leave’ and the Right to Work

Posted: 26th January 2011

GardenWhen an employer wishes to prevent a departing employee from having access to information that could be useful to a competitor or which would assist the employee in setting up in competition with the former employer, the employer can place the employee on ‘garden leave’ even where the contract of employment does not contain an express right to do so. This will be easier to do if the employer is not contractually obliged to provide work but, in the event of a dispute, the courts will consider whether or not the employee’s skills will suffer as a result of a period out of the workplace.
In Christie v Johnston Carmichael, Mr Christie was put on garden leave after he resigned from his job with Johnston Carmichael, a firm of Chartered Accountants. He had recently qualified as a member of the Chartered Institute of Taxation and sought a higher paid position within the firm. This could only be achieved by a move to a different office and discussions to this end took place. Mr Christie gave no indication at that time that the move would not proceed as planned but later sent a letter of resignation giving the required three months’ notice. He claimed that he had no choice but to resign because his current role in the firm was being eliminated without his consent.
He denied that he was on garden leave. In his view, he had been constructively dismissed and his contract of employment was at an end. He brought a claim of constructive dismissal and alleged that Johnston Carmichael had breached his contract of employment by putting him on garden leave.
On the circumstances of the case, the Employment Tribunal (ET) rejected Mr Christie’s claim for constructive dismissal. Furthermore, although there was no express garden leave clause in his contract, his employer was entitled to request that he stay away from the office during his notice period. As his role with the firm was not unique, he would not have been ‘deskilled’ by not using his skills for a three-month period.
Mr Christie appealed against the ET’s decision with regard to garden leave but lost. In the view of the Employment Appeal Tribunal, Mr Christie’s contract could not be construed as giving him the right to work. Nor was there anything to indicate that the period of garden leave would result in a loss of skill. Indeed, even had he commenced work as a specialist tax adviser, it was unlikely that his skills would have diminished in that time and it was open to a professional person on a period of leave to keep himself up to date through personal study.
We can advise you to ensure contracts of employment contain appropriately drafted clauses in order to protect your business when necessary.