Garden leave permitted without express contractual provision

The recent decision of the Employment Appeal Tribunal (‘EAT’) in Christie v Johnston Carmichael has established that an employer may be entitled to place an employee on ‘garden leave’ even where there is no express provision entitling this in the employee’s contract of employment.

Mr Christie worked for Johnston Carmichael (‘JC’), a Scottish firm of chartered accountants. Following a dispute with JC, Mr Christie gave three months notice of his resignation and in his letter he alleged a breach of contract by JC and claimed constructive unfair dismissal. JC wrote back and informed Mr Christie that he would not be required to work out his notice period and placed him on garden leave. They reminded him of his restrictive covenants including a requirement not to contact clients. There was no provision in Mr Christie’s contract of employment allowing JC to place him on garden leave.

Mr Christie contacted clients in breach of his restrictions and when JC objected to this he claimed that his contract was at an end and refused to accept that he was on garden leave. He then presented claims in the Employment Tribunal for constructive unfair dismissal and for breach of contract. He argued that JC was not entitled to place him on garden leave.

The EAT held that Mr Christie had not been constructively unfairly dismissed and that JC’s action in placing him on garden leave did not amount to a breach of contract. On the issue of garden leave, the EAT concluded that on the facts Mr Christie did not have a right to work during his notice period. They considered that he would not become de-skilled during this period as he could study privately and ensure that he kept up to date with professional developments. The EAT held that JC were entitled to place Mr Christie on garden leave even though there was no garden leave provision in his contract of employment.

It is recommended that employers take professional advice before placing an employee on garden leave, particularly in the absence of an express contractual provision. All the facts will need to be weighed up including the proposed length of the garden leave period and the employee’s role.

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