“Gardening Leave” – What is it and how can it work for our business?
What is gardening Leave?
Gardening leave refers to the practice of requiring an employee to take paid leave (as distinct from Annual Leave or Long Service Leave), to tend to the garden so to speak – hence the name, for the duration of their notice period. Whilst on gardening leave the employee is required to be available to you if and when required, and must be contactable throughout the entire period - he/she is not required to perform their duties, attend the workplace, contact clients, and be otherwise involved in the business.
How could it work for your business?
It’s strategy or option typically utilised in relation to your more senior or executive type employees, as a way of keeping them out of the business so that you can firm up client relationships and protect your confidential information, before they commence employment elsewhere with a competing business or otherwise.
A possible alternative to this option is to pay them in lieu of notice and rely on the enforceability of any post-employment restraint clause in their employment contract (bearing in mind that post-employment restraint clauses are notoriously tricky and costly to enforce).
Do I need to include a term in our employment contracts to cover it?
However, you can require an employee to go on gardening leave, even if you don’t have such a clause, subject to a number of exceptions including:
- the employee doesn’t earn commissions on work performed;
- the employee doesn’t hold a public office; and,
- the employee isn’t in employment which is highly dependent on publicity to enhance their reputation (for example, the entertainment industry – TV presenters, actors and professional athletes) and the ability to gain publicity could be said to be part of the agreement with the employer.
Where do I go for more information?
If you would like to discuss the inclusion of such a clause in your employment contracts and how it could work effectively for your business please contact our employment contract experts in Parramatta and Norwest: