garden leave clause

Quick Reference

A clause in an employment contract that provides for a long period of notice, during which the employee will be remunerated in full but will not be required to attend at the workplace. Such clauses are used by employers wishing to safeguard trade secrets or prevent a highly skilled employee from leaving to work for a rival firm. An employee who has been head-hunted could be required to serve ‘garden leave’ for a period of up to one year in order to lawfully terminate his or her existing contract. Throughout this period the employee will be subject to all the normal contractual restraints. Management sees the use of such clauses as an expensive, but reliable and enforceable, alternative to traditional restraint of trade clauses.

Subjects: Business and Management — Law.

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