Garden Leave and Implied Terms

The High Court, in SG&R Valuation Service v Boudrais, has held that an employer will sometimes be entitled to force garden leave onto senior directors even when there is no such right in the contract.

In this case, two directors resigned with the intention of joining the competition. There was strong evidence of an intention to misappropriate confidential information. The employer insisted on a period of garden leave, so as to delay the date when they joined their new employer, and sought an injunction enforcing this The employees resisted on the grounds there was no garden leave clause, they had a right to work, and that by not providing work the old employer was in breach of contract - entitling them to leave and go elsewhere.

The court held that the implied right to provide work is subject to the qualification that they have not, as a result of some prior breach of contract or other duty, "rendered it impossible or reasonably impracticable for the employer to provide work" (para 24). As there was a prima facie case on the documentary evidence that the directors had done just that, the judge held that they had no right to be provided with work by the old employer, and so the employer could insist on a period of garden leave. The injunction was granted.