John Paul Executive Sales & Marketing Recruitment

Resignation, notice periods and garden leave

Share this page:

                       

 

What notice are you obliged to give your employer?

Your contract of employment should specify what notice period you should give when you resign. If no explicit contract is in place, the statutory minimum period of notice will apply. For an employee who has been employed one month or more it is one week.

Contractual implications

Post Termination Restrictions

Post termination restrictions are only enforceable if they are reasonable in terms and scope and protect legitimate business interests. A clause stopping you poaching staff or customers for six months may be reasonable. A clause stopping you working in IT retail for the next two years is unlikely to be.

If your new employer wants you to breach those restrictions, you should ask them to indemnify you against any claim & legal costs that your current employer may bring as a result.

Garden Leave

Some contracts of employment give the employer the option to ask that you do not attend the workplace during your notice period, even though you continue to be paid. This is known as "garden leave"- the employee is expected to stay at home and not commence new work during this period. The logic behind this is clear. Once it becomes known that the employee is leaving the company, an employer may not want to take a chance to have the employee continue working where confidentiality and trade secrets become more of an issue (especially if you are going to work for a competitor). The employer will not be in breach of contract to require the employee to stay at home during the notice period as long as there is a provision in the contract giving the employer the right to insist on Garden Leave.

If you are thinking about breaching the contractual notice period, think again. Your current employer may be able to sue you if it suffers losses as a result of your breach. If you are going to a competitor, the company may be able to get an injunction to stop you.

Shares and Share Options

If you have unexercised share options, you may well lose the right to exercise them if you resign. If your employer is unlisted, you may be obliged to sell them back to the company at a certain price. Your share-holder agreements should clarify these points.

Discretionary Bonuses

If you resign, it is reasonable to assume that your current employer will be unwilling to pay any discretionary bonus you were expecting. Case law now indicates that employers must exercise discretionary bonus clauses ‘genuinely, rationally and in good faith’. However if the prospective bonus is likely to be sizeable, you may consider keeping quiet about your imminent departure until it is safely in your bank account.

This information is based on UK law, is for general guidance only and should not be relied upon without specific legal advice. 26/02/07

The last tip we can give you is to feel good about the decision you’ve made.

While you may feel that your departure will adversely affect others you need to remember that the contract between you and your employer is a business arrangement and changing your job is within the parameters of that arrangement and perfectly acceptable when one or the other of you can forge a more beneficial arrangement elsewhere.

Useful links

	Basic rights at work
	Contracts of employment
	Employment fact sheets
	Employment

 

Share this page:

                       

 

Sitemap

Copyright | John Paul Executive Recruitment | Tel: 0118 965 3881| Fax: 0118 965 3888| www.johnpaul.co.uk

Legal