Dear Atty. Kathy,
I have an ongoing job application with Company A. In the draft employment contract the recruitment officer showed me, there is a provision stating that Company A may notify me to stop performing my duties during the notice period of the termination of my employment contract, but that I should make myself available for turnover purposes. The same provision also mentions that I will continue to receive my salary and benefits during the said notice period even if I am not performing my duties, and that I will not be allowed to enter the premises of the Company, nor to commence any other employment or engagement. It seems like my employment would be in limbo during the notice period. Is this a valid provision?
Ivan
Dear Ivan,
In the case of Gertrudes D. Mejia versus Wrigley Philippines, Inc., et al., (G.R. No. 199469, 11 September 2019; Wrigley Philippines, Inc. versus Gertrudes D. Mejia, G.R. No. 199505, 11 September 2019), the Supreme Court held that the practice of the employer directing an employee not to attend work during the period of notice of resignation or termination of the employment is colloquially known as “garden leave” or “gardening leave.” During a garden leave, the employee might be given no work or limited duties, or be required to be available during the notice period to, for example, assist with the completion of work or ensure the smooth transition of work to their successor. Otherwise, the employee is given no work and is directed to have no contact with clients or continuing employees. Also, during the period of garden leave, employees continue to be paid their salary and any other contractual benefits as if they were rendering their services to the employer.
The garden leave provision is typically in place to prevent departing employees from having access to confidential and commercially sensitive information, business contacts, and intellectual property, which can be used by a new employer. The employee on garden leave retains his/her status as an employee, and remains bound by a duty of loyalty and, thus, cannot go to work for a competitor or do anything else to harm the employer. Such garden leave provides employers with the protection they need, while at the same time, is fair to employees. The practice has been adopted by employers and generally upheld by the courts in the United Kingdom and the United States.
In the Philippines, garden leave has been more commonly used in relation to the 30-day notice period for authorized causes of termination, such as redundancy. There is no prohibition under Philippine labor laws against a garden leave clause in an employment contract.
Based on your narration, it appears that as provided in the draft employment contract, you will still be paid your salaries and benefits during the notice period, even if you may be notified to stop performing your duties but still make yourself available for turnover purposes. Therefore, subject to other circumstances that may make such garden leave provision contrary to law, such garden leave provision in the draft employment contract is valid.
(Gertrudes D. Mejia versus Wrigley Philippines, Inc., et al., G.R. No. 199469, 11 September 2019; Wrigley Philippines, Inc. versus Gertrudes D. Mejia, G.R. No. 199505, 11 September 2019)
Atty. Kathy Larios