Employment relationships end for a myriad of reasons. In some situations, even in amicable ones, an employer may need to protect their business and its confidential information from a former employee with a gardening leave clause.
This is not to say that the employee is untrustworthy, or has committed some indiscretion against an employer. But rather, it is a precautionary measure that is usually spelled out in the original employment contract. Hence when it is invoked, neither the employee or the employer is taken off guard.
To learn more about what gardening leave entails and what you can/cannot do as an employee, read on.
Overview:
- What is garden leave in Australia?
- Advantages of a gardening leave clause
- Why employers use gardening leave clauses
- What an employee on gardening leave can/cannot do
- Is garden leave legal?
What is garden leave in Australia?
Gardening leave is when an employee leaves a job and is required to stay away from work during their notice period. They are still paid as normal, and can either work at home/from another location, or not at all.
Why do they call it gardening leave?
Because the employee cannot work for another employer, and most likely won’t be working for their ex-employer, they have time to tend to their gardens (so to speak).
Without being able to work, employees often take up hobbies (such as gardening) while they’re on gardening leave – especially if the terms in their contract prevent them from going on holiday.
Advantages of a gardening leave clause
The purpose of a garden leave clause in a contract is four fold;
- It protects the best business interests of the employer.
- It provides for confidential information to remain safely in the hands of the employer.
- It creates a limited period of time during which the ex-employee cannot work for a competitor.
- In the event that the disengagement is due to a hostile situation, it allows for both parties to separate while not creating financial hardship for either.
Why employers use gardening leave clauses
All of these protections are valid and often necessary for employers who allow employees access to confidential business information, exclusive suppliers, financial assets and growth plans. The short gap in access to this information to an employee who is leaving the company can give the business owner time to make any necessary changes to accessing sensitive information. These changes may make the information currently known to an ex-employee less valuable and possibly moot.
What an employee on gardening leave can/cannot do
As an employee being placed on gardening leave, you do have some significant obligations. These obligations include;
- You cannot attend the workplace
- You cannot continue to perform any activities that were previously your responsibility
- You can only participate if requested to do so by your employer
- You must remain available to your employer to allow for transitional issues to be addressed
- You must still abide by the existing terms of your employment contract
- You may be unable to take another position with a new company if it directly competes with your ex-employer
- You may be prohibited from engaging in any other form of employment for the duration of the garden leave
Can I go on holiday whilst on garden leave?
It depends on what is outlined in your employment contract. Even though you may not be required to work, you will need to remain contactable by your employer.
Can I start work while on gardening leave?
It is not advisable to commence work at your new job while you’re on gardening leave. If you were to do so, it could be seen as a breach of contract.
Employee benefits during the notice period
While an employer and employee may agree that the employee’s salary will continue during the period of garden leave, there are other considerations that a garden leave clause should also clarify, with regard to:
- Ongoing accrual of benefits such as vacations time, holiday pay and sick leave
- Ongoing health care benefits
- The loss of commissions from sales that might have accrued during the garden leave period
- Any restraint regarding future employment must comply with the restraint of trade laws and terms in the employment contract
Is garden leave legal?
The way for an employer to prevent any legal issues arising out of the gardening leave clause is to be sure the clause is properly written into the contract. In addition, it is wise to be sure to review the clause and secure the employee’s full understanding of its implications prior to the employee signing the employment contract. The best way to ensure that a gardening leave clause is legal and enforceable, is to seek the advice of an employment lawyer prior to including the clause in the contract.
If you find yourself in need of assistance with this, or other post employment restraints, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation on 1800 770 780.