Articles
Enforceability of Garden Leave Clause in an Employment Contract
by Rishi Batta Law FirmGarden
leave clause is an extremely useful tool for employers to mitigate the impact
of employees (usually a senior employee) exiting an establishment, by providing
(a) transition period, to phase out the incumbent employee, and (b) bedding
period for his or her replacement. It is common to find a garden leave clause
in employment contracts of key employees of establishments who (a) have
significant knowledge of day-to-today affairs of the establishments, or (b) are
engaged in a highly technical industry (such as pharma, banking and financial
services, biotechnology, etc.), or (c) possess significant trade secrets and
confidential information. In practice, such a clause entails the employee in
question being excluded from the workplace or being limited to a peripheral
role, instilling a sort of Chinese firewall so as to minimize or eliminate
their exposure to critical matters that impact the day-to-day affairs of the
establishment.
The garden leave clause is normally included in
employment contracts and kicks in once the employee in question has begun
serving his or her notice period. It remains effective for the entirety of the
notice period and in some instances may even extend beyond the contractual
notice period.
While garden leave provisions have been widely
accepted and are common around the world, there have been instances where
Indian Courts have found such a clause to (a) fall foul of Section 27 of the
Indian Contract Act, 1872 (“the Act”), and (b) be in disguise as a restraint of
trade.
Tatva Legal, Hyderabad, amongst other services,
provides comprehensive employment
law related
legal services and our team of experienced lawyers advise on all aspects of labour law, catering to the needs of both the
private sector and public company employees.
Read More: https://tlegal.com/blog-details/enforceability-of-garden-leave-clause-in-an-employment-contract
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About Rishi Batta 
Law Firm
13 connections, 1 recommendations, 57 honor points.Joined APSense since, July 6th, 2021, From Hyderabad, India.
Created on Jul 28th 2021 05:32. Viewed 286 times.
