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Managing the notice period of a senior manager resigning

After almost a week of uncertainty in the world of politics, we now know that the UK will have a new prime minister. Understandably it raises questions not just about how the business of Government will continue until a replacement is found, but at what point the Prime Minister should leave.

These questions are relevant to any business when in a position of losing its Chief Executive Officer or other senior manager, as well as specialist roles.

In this article, we consider how to manage the notice period of a senior manager, or someone who holds a unique role, and particularly focus on garden leave.

What is garden leave?

Garden leave is a term used to send an employee home from work on full pay during their notice period. It can be an option either when an employee resigns, or if it is the employer who dismisses with notice.

To exercise this term, then the contract of employment must allow for it; otherwise forcing someone to remain absent from the workplace would amount to a breach of their contract. If the contract does not allow for garden leave to be used, but you wish to ask the employee to remain off work, then careful handling is vital because to avoid a breach of contract claim, you must have their mutual consent before taking action.

What happens when an employee is on garden leave?

The period of leave is paid because the employee is still employed. They are serving out their notice, albeit at home, rather than attending work.

This means that they do not lose any of their normal pay and benefits and they must be readily available to attend the workplace if the business needs to recall them back to work.

Since the employee remains employed throughout the period of garden leave, which expires when the notice period does, it means they cannot work for another employer.

Why would you place an employee on garden leave?

Garden leave is a useful commercial tool to enable the business to manage any potential risk when an employee who holds either a senior or unique role resigns from their post. The circumstances as to why the employee is leaving are important in considering whether to place someone on garden leave.

Here are some reasons you may wish to invoke the contract clause:

  • To allow the business to protect confidential information from being misused by the employee.
  • To prevent the employee from poaching customers during their notice period.
  • When the employee has resigned having secured a new role with a competitor.
  • The job role is one which involves the handling of commercially sensitive information.
  • The employee has been dismissed procedurally (with notice), but it would not be appropriate for them to remain in the workplace whilst serving their notice.

Implementing garden leave needs careful handling because of the risk of breach of contract when not managed properly. Always check the wording in your contracts of employment to understand whether you have the legal right to impose the leave.

If you do not have the clause in your contracts of employment to allow you to place employees on garden leave, then we would recommend that you consider introducing it in order to protect the business.

Further information

If you need help or advice on how to manage garden leave or would like us to review your contracts of employment to ensure that you have a legal right to use the tool, then please do get in touch with us at HR Solutions on 0844 324 5840.

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