Restraint of trade gardening leave

Legal services from the best Lawyers in Chennai. The South African Labour Courts have, until now, not had the opportunity to consider what impact, if any, a so-called “ gardening leave ” provision may have on the enforceability of a restraint of trade. He was subject in his contract to a clause precluding him from engaging in any other employment during the term of the agreement, a. Although restraint of trade cases are always highly context-specific, a recent case provides an example of the High Court finding a long period of garden leave to be reasonable in the circumstances. The court found that months was a reasonable period of time for a stockbroking firm to establish itself with its clients.

In this case the court held that in determining the reasonableness of the duration of a restraint , ‘the full period that an employee is out of the market should be taken into account.

His contract of employment included both a three month restraint clause and a three month gardening leave clause. In essence, this meant that he would not be able to work for a competitor for a period of six months as his three month restraint clause wouldn’t commence until his three month gardening leave period had expired and he could not work for a competitor whilst on gardening leave. Mr Kerr agreed to remain on garden leave until this date. However, he advised Air New Zealand that he did not intend to comply with the six-month post-termination restraint of trade clause in his employment agreement, because he had received legal advice that it was unenforceable. In response to this, Air New Zealand sought an injunction.

The central issue in this case was the date when the restraint of trade undertakings in his contract of employment should start operating: the date Motsa resigned or at the end of the period of garden leave. Motsa contended that the restraint of trade became operative on the date at which Vodacom made the election not to require him to work during his notice period. He contended further that.

The court confirmed that the restraint was reasonable and that the employee had to spend six months on gardening leave , and could not work for the competitor for a further six months.

Counsel for Vodacom on the other hand argued that both the six months’ garden leave and the six months’ restraint of trade post termination of employment were independently enforceable. The Court endorsed Vodacom’s argument and ordered Motsa to comply with both the garden leave and the restraint of trade obligations. In dismissing Motsa’s contention that Vodacom would meet their. However, employers should be aware that if an employee’s employment agreement contains both a garden leave provision and a restraint of trade provision, the period the employee is on garden leave may be taken into consideration in working out whether or not the restraint of trade provision is reasonable (and therefore enforceable).

The restraint of trade provision takes effect after the end. Garden Leave and Restraint of Trade Agreements - Can garden leave be an effective substitute for a restraint undertakings or can it cause the restraint undertaking to be unenforceable? The Labour Court grappled with the question of whether the enforcement of the garden leave provision impacts on the enforcement of a post-termination.

Garden Leave in Redundancy, Restrictive Covenant, Trade secrets and confidential information, Termination of Employment Contract, Restraint of Trade. What is Garden Leave This term is used to describe an employee who has been dismissed and hence is not required to work, nevertheless is still receiving his or her normal salary whilst staying at home. Whether or not a restraint payment is made to the employee is only one of the factors that a court will consider in determining the reasonableness and enforceability of the restraint of trade. If a restraint of trade payment is made, it is more likely that a court will find that the restraint is not unreasonable, if the individual has been adequately compensated for the limitation placed on.

The issue whether a period of gardening leave counts as service for calculating the length or term of a restraint of trade will be determined by ordinary principles of contract interpretation. However, even where a contract does not include a gardening leave clause, the courts have now, in some Victorian cases, found that “ gardening leave ” is an implied term of most employment contracts. In other words, the employer may have an implied (or unwritten) right to impose gardening leave on the employee even where this is not specifically set out in the employment contract.

Dismissed after months, during which no contract had been offered. Mr Guy argued that his time on gardening leave should count towards the restraint period as otherwise the plaintiff would be imposing a six-month restraint perio where only three months was provided in his employment contract. D is restraint of trade - unlimited in geographic location, computer related services too wide and months too long.

E is a penalty clause.

The weight given to the doctrine of restraint of trade and the potential impact on partners wishing to leave a firm is likely to mean that anti-team-move clauses require meticulous drafting. A restraint clause is only effective once an employee leaves the business. Garden leave Garden leave is also commonly used in conjunction with restrictive covenants for maximum effect.

The inclusion of a garden leave clause in a contract of employment allows an employer to require the employee to spend all or part of the notice period at home whilst continuing to receive his usual salary and benefits.