Pictured above: Mike Wakeling
Gardening leave is more akin to the law of the jungle, an expert
has warned.
Mike Wakeling, head of the dispute resolution department at
Lodders Solicitors in Stratford-upon-Avon, says such restrictive
covenants in employment contracts can be difficult to make
stick.
Because ultimately the terms have to be reasonable and what is
reasonable or not will be argued over as long as courts exist.
Restrictive covenants are used for a variety of reasons,
including preventing ex-employees from working for a competitor,
recruiting former colleagues or using confidential information.
Mr Wakeling said: "As for 'being sent on garden leave' - a
favourite with law and accountancy firms - it is designed to
require the employee to spend all or part of their notice period at
home while continuing to receive salary and benefits, so
restricting access to confidential information and clients.
"It requires a specific clause in a contract and is also subject
to a test of reasonableness with regard to its duration. Now there
is much more movement of staff between firms garden leave rarely
lasts more than a few weeks or months, but a year is not unheard
of."
Typically, to get a covenant upheld and enforced, the
ex-employer has to convince a court that it is designed to protect
his legitimate business interests and extends no further than is
necessary to protect those interests.
Mr Wakeling noted: "For a restriction to be reasonable it must
not be drafted too widely. It is unlikely that a wide geographical
area will be acceptable and, as a general rule, a restriction for
more than six months will be difficult to justify.
"The typical example is that of a hairdresser where a
geographical restriction might be reasonable in a rural area but
not in a city.
"Courts will be reluctant to deny somebody the ability to
work.
"Ultimately restrictive covenants have a touch of the law of the
jungle about them - the issues will vary considerably from case to
case and from employee to employee. And judges are different
animals so it's not necessarily a question of who roars the
loudest."
Covenants which seek to prevent any form of competition with a
former employer are rarely allowed to stand.
And where an employer claims damages for breach of a restrictive
covenant in an employment contract, they will need to show some
resulting loss.
However,the poaching of contracts can be hard to prove.
"All in all it can be a bit hit and miss and much depends on how
good your lawyer is," noted Mr Wakeling.
For more information about Lodders, please visit their website
here: www.lodders.co.uk