Case - Provident Financial Group Plc v. Hayward

[1989] IRLR 84, Court of Appeal -
No reasonable prospect of damage : Order refused where there is no reasonable prospect of damage : preventing an employee from obtaining other employment by the practice of 'garden leave'.
The court refused an interlocutory injunction restraining the defendant, the financial director of the plaintiff's estate agency company, from breaching a term of his contract of service by working for another company as financial controller of its estate agency business three months before the expiration of his notice terminating his employment with the plaintiffs. It was a term of his contract that he would not work for any other business. On 1/7/88 he gave in his notice and it was agreed that he should be on 'garden leave' until 31/12/88. In October he informed the plaintiffs that he intended to start work for the other company immediately. The plaintiffs applied for an injunction. HELD: There was no reasonable prospect of serious damage to the plaintiffs. The two businesses were different since the other company operated from supermarket stores whereas the plaintiffs had High Street offices. The defendant had not taken part in selling houses for P. and had no relevant confidential knowledge which could be of use to the other company. The practice of long periods of 'garden leave' is capable of abuse. It is a weapon in the hands of employers to ensure that an ambitious and able executive will not give notice if he is going to be unable to work at all for anyone for a long period of notice. A 'garden leave' agreement would not be enforced if the court considered that the other business for which the employee intended to work was unrelated to that of the employer. Application dismissed.
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