Veitch Penny LLP - Exeter | Crediton, Devon

Case

SG&R Valuation Service Co v Boudrais & Others
High Court (Queen’s Bench Division) (12 May 2008)

Issues

1. Garden leave
2. Competition
3. Protection of data

Facts

On 4 & 7 April 2008 respectively, Mr Boudrais and Ms Smith resigned from their employment with the employer, giving the three months' notice as they were required to do by their contracts of employment. Almost immediately, it became apparent to the employer that both employees may have been disclosing confidential information, were planning to take business from the employer to their new employer, were planning to solicit staff and had expressed an intention to damage the business by their actions.

The employees involved were asked to remain at home on garden leave. There was no clause within their contracts allowing the employer to do this. A few days later, the employees were suspended pending disciplinary action.

The employees resigned with immediate effect. They claimed that by placing them on garden leave, the employer had acted in breach of contract, entitling them to resign.

The employer made an application to the High Court for an injunction placing the employees on garden leave for the duration of their notice.

Decision

The court had to consider whether the employer could place them on garden leave and whether the employees had the right to work under their contracts. It concluded that in this case, there was such a right. They were highly skilled and their work was particularly specialised. Being prevented from working within the market for a significant period of time would mean that their skills would become stale. It also meant that they were unable to earn bonuses which made up a substantial part of their earnings.

Against this background, the court acknowledged that this right was not absolute requiring the employer to provide work at all times. The right had to be subject to a qualification that the employee must nor have demonstrated that they are not ready or willing to work by their actions. Where such a breach exists, there is no obligation by the employer to provide work.

In this case, whilst the employees had the right to work, they had demonstrated they were not ready and willing to work by their conduct. Consequently, the employer was entitled to place them on garden leave. An injunction was granted placing the employees on garden leave for the remainder of their notice period.

Comments

This case highlights the importance to employers of having a garden leave clause in their contracts, particularly if they employee staff who have valuable business connections or access to confidential information. Without such a clause, the employer would have to be able to prove there is clear wrongdoing on the employee's part, which in most cases, is going to be very difficult to do.


Rachel Billen - Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

This Employment Law Update does not constitute legal or other professional advice and should not be relied on as such. You should take specific advice regarding your circumstances before taking any action based on the information contained within this Update.