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How Does Garden Leave Work?

How Does Garden Leave Work?

Are you thinking of terminating an employee? Do you want to prevent them from using sensitive information with another competitor? Read this guide.

29th March 2019
Reading Time: 2 minutes

Introduction

If an employee is leaving by resignation or termination, understand what options you have to protect your company’s resources. An earlier article outlined How Much Notice Do You Have to Give When Terminating an Employee? Using the minimum notice period, employers can use garden leave for their employees. Garden leave occurs when an employee doesn’t have to work during their notice period while still being paid regularly.

To protect sensitive information or even the relationships that employee has established before they potentially work for a competitor. Employment Contracts often have garden leave clauses. You can set one up in 15 minutes here – free Employment Contract (Full Time).

There are certain obligations from both parties.

Employers

  • Clear indication of what the gardening leave is for (sometimes, given to employees to find a new job)
  • Obliged to provide work if outlined in employment contract
  • Regular remuneration

Employees

  • Not working (in office or from home)
  • Conforming to employment agreement
  • Available during notice period
  • Not working for anyone else during notice period

There are benefits for employers to use gardening leave when employees are departing their company. They lie with the fact that they are still under the terms of their contract which still places them as an employee who

  • Protects business information
  • Can’t work anyone else
  • Has to act in the company’s best interests

There are other benefits which tie in with the fact that they are not in the office preventing any potential poaching of clients or existing team members. It is important to consult a contract lawyer who can review your existing employment agreements to ensure that there are clauses which prevent such sensitive information moving onto others.

Conclusion

Gardening leave is common in Australia for companies that engage with confidential information or have relationships with external parties. Important to revise and amend all your employment contracts & insert an express power to put an employee on garden leave during any notice period or during the course of their employment. It is also important not to reduce or remove any benefits payable to the employee when they are on garden leave. If these obligations are not followed then you can be in breach of contract giving rise to wrongful dismissal matters for your business.

Unsure where to start? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

Author
Tom Willis