January 9

What is garden leave and when should it be used?

Garden leave is one of the many tools employers have at their disposal to help protect their business interests.

If you place someone on garden leave (often known as ‘gardening leave’), it means that you require the employee to be away from the workplace during their notice period.

The employer is under no obligation to provide work or assign any duties to the employee for the whole or part of the employee’s notice period. It often involves asking the employee:
• not to perform any service for the company,
• not to attend the premises,
• not to use company equipment,
• to refrain from business contact with customers, suppliers and other employees.

Despite this, they still remain an employee and they will continue to receive salary and contractual benefits in the usual way.

They will also be bound by the express and implied terms of their contract of employment, most especially confidentiality clauses and restrictive covenants. This typically means that they will not be allowed to:

• work for another employer,
• act in a self-employed capacity,
• do anything that is contrary to the employer’s business interests.

They must be available for the employer, for example, if a manager has some queries or needs help with the handover.

Why do employers use garden leave?

Typically you will find a garden leave clause in the contracts of senior employees to:

• stop an employee working for a competitor until their notice period has come to a close (so even though they are not in the office, you retain control over them),
• keep them away from confidential or sensitive company data and prevent them from misusing this data,
• stop the employee from poaching customers or colleagues,
• enable the successor to the role to start work without worrying that the other employee will get in the way,
• they may also be used if the employer is concerned that the post-termination restrictive clauses applicable to the employee are not enforceable.

When can you put someone on garden leave?

It will occur when someone resigns from their post or is dismissed with notice.

What are the risks for employers?

If you do not have a clear and well-drafted garden leave clause in the employee’s contract of employment and you decide to place them on garden leave (and it has not been agreed to by the employee in writing), you expose yourself to the risk of claims of breach of contract. This could entitle the employee to argue that it amounts to a fundamental breach of the contract. They could resign and claim constructive dismissal. It could also mean you lose your rights to enforce post-termination restrictive covenants.

If the employee has a notice period which exceeds six months, the employer may not be permitted to enforce garden leave for the full period. This is because it’s likely a court would think it’s longer than necessary to protect the employer’s business interests.

To check that your business is protected with garden leave provisions and post-termination restrictive covenants please email me at nicola.goodridge@goodhr.co.uk

January 3

Employment law in 2019: seven changes to look out for…..

1. Post-Brexit immigration rule changes

Whether or not a deal on the UK’s exit from the EU is agreed, the rules around the employment of EU nationals will change sooner or later.

The government has introduced a scheme under which EU workers already in the UK will be able to apply for “settled status”, to be able to live and work in the UK indefinitely.

However, employers need to be aware that, going forward, the employment of workers from the EU is likely to be subject to restrictions in the same way as the employment of other foreign nationals, so will need to adjust their recruitment processes accordingly.

2. Start gathering evidence for executive pay reporting

Rules coming into force on 1 January 2019 mean that UK quoted companies with more than 250 employees will have to report on ratios between the CEO and employees’ pay and benefits.

The requirement applies to financial years beginning on or after 1 January 2019 so the first tranche of reporting will start in 2020. However, affected companies should gather their evidence in good time to be able to calculate their pay ratios by the deadline. The information will have to be included in the directors’ remuneration report.

3. Extend itemised pay statements to workers

From 6 April 2019, the right to an itemised pay statement will extend to workers, not just employees.

Further, where a member of staff’s pay varies according to time worked, the employer will have to include on the itemised pay statement the total number of hours worked for which variable pay is received.

This can be done either as an aggregate figure or as separate figures for different types of work or different rates of pay.

4. Publish second gender pay gap report

Employers with 250 or more employees on the “snapshot date” (31 March in the public sector and 5 April in the private and voluntary sectors) must report on their percentage gender pay gap annually within 12 months of that date.

This means that the deadlines for the second round of reports are 30 March or 4 April 2019. Employers need to gear up to publish their second report, if they have not done so already.

Organisations must publish reports on their website and on the Gov.UK website. In the private and voluntary sectors, reports must also be accompanied by a written statement confirming their accuracy and be signed by a senior person as prescribed by the legislation.

5. Be aware of national minimum wage rate increases

The national living wage is due to increase to £8.21 per hour from 1 April 2019. Other national minimum wage rates are also due to increase, with hourly rates rising to £7.70 for workers aged at least 21 but under 25, to £6.15 for workers aged at least 18 but under 21 and to £4.35 for workers aged under 18 who are no longer of compulsory school age.

6. Meet increased statutory family and sick pay rates

The weekly amount for statutory family pay rates is expected to increase to £148.68 for 2019/20. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance. The increase normally occurs on the first Sunday in April, which in 2019 is 7 April.

The weekly rate for statutory sick pay is expected to increase to £94.25 from 6 April 2019.

7. Start preparing for parental bereavement leave and pay

The government has confirmed that it intends to introduce a right for bereaved parents to take paid time off work.

Under the current proposals, bereaved parents will be able to take leave as a single two-week period, as two separate periods of one week each, or as a single week. They will have 56 weeks from their child’s death to take leave.

The new right is expected to come into force in April 2020, but employers should start preparing for it during 2019, and could decide to introduce their own bereavement leave policy if they don’t already have one.

If you need any help email me at nicola.goodridge@goodhr.co.uk