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Although not yet a common feature within SA, internationally the concept colloquially known as “garden leave” is not uncommon.
In short, garden leave may be incorporated into an employee’s employment contract to address the circumstance wherein an employee is given notice or, more typically, resigns, and is obliged to serve all or part of his/her notice period away from the workplace and market place (ie, in the garden).
Simultaneously, the employer is exempted from providing the employee with work during the notice period.
Garden leave should not be confused with a restraint of trade which is a “restrictive covenant” which may have application on completion of the period of garden leave.
During the period of garden leave the employee is still subject to the normal terms and conditions of employment which ordinarily apply, and the employee continues to receive their remuneration as they are technically still employed.
Furthermore, the employee may not enter the premises of the employer, contact suppliers, clients or colleagues, and may not start working for another employer.
More often than not, employers incorporate a garden leave clause into a contract of employment for the following reasons:
l The arrival of an employee who has resigned at a competitor is delayed, thereby providing the employer with an opportunity to reinforce prevailing business relationships in anticipation of possible overtures emanating from the erstwhile employee under the umbrella of the competitor.
l Current confidential information ages during the period of garden leave thereby limiting the competitor intelligence value such information may have for the competitor.
l The employee is restrained from competing with the employer during this period.
Skilled workers, however, have a right to work (even though in common law, generally, there is no right to work).
This right is premised on the fact that their skills and competencies may deteriorate should they not be afforded an opportunity to exercise their skills.
Historically, English case law has tended to uphold the validity of garden leave clauses, even in light of so-called skilled employees, although more recently, English courts have been less sympathetic to this argument.
It has been argued that garden leave clauses are a more effective method of protecting confidential employer information than restraints of trade.
An employer may not require an employee who is not subject to a garden leave obligation to remain at home for the duration of the remainder of their notice period; this would amount to a breach of contract by the employer.
In such circumstances, the employee would be entitled to terminate the employment contract before the notice period is completed and commence employment with the employer.
Given the complexities surrounding restraints of trade and the dilemma of enforcing such restraints, employers may be increasingly inclined to elect rather to pay their employees to sit in the garden for a period of time prior to commencing subsequent employment with a competitor.
l Book a Seta-accredited Conducting Disciplinary Hearings workshop for June 5 and 6. Phone 011 476 1620, e-mail firstname.lastname@example.org, or visit www.tonyhealy.co.za