Gardening leave looks rosy

MANAGING DIRECTORS very rarely get a chance to take a six-week holiday abroad, yet this is what Debra Williams is about to do. Her plan is to start in Florida, before venturing to California, Australia and Hong Kong.

The trip will mark the end of a few weeks spent at home helping out with her daughter's school play - "sewing costumes and all the other things mums do".

The reason Ms Williams is able to spend so much time with her family is that she is on gardening leave. It means she will have over three months' paid leave between leaving her old job as managing director at Confused.com, an insurance comparison website, and taking up a new post as managing director of the Highway Group. "It's a wonderful opportunity to take a step back," she says.

Taking a holiday with the family was something that Jon Forsyth, founding partner of advertising agency Adam Eve, also made a priority for his gardening leave.

He used two of his three months' leave to travel in New Zealand. "It's a really good period to go off and do something with your family," he says. "We toured round the South Island for seven weeks and then I spent the remainder of the time organising myself and keeping abreast of the advertising market with a view to starting a new business."

Although gardening leave is largely associated with financial institutions, it occurs in industries as diverse as engineering, recruitment and pharmaceuticals - indeed anywhere that firms worry about the immediate transfer of competitive information to rivals. The idea is that by stipulating that someone cannot work for competitors for a certain length of time, you reduce any potential damage that may be done.

Ann Gales, head of life sciences at headhunters Heidrick Struggles, says use of the time off varies. "In my area, people often find other projects to do that are work related, such as sitting on regulatory bodies. Some use the time to think about what they'll do next."

David Scott, managing partner of Vestra Wealth, a wealth management firm, did just that. He spent much of his four months' leave from the bank UBS preparing for his new business.

However, he also made sure he did "the sort of stuff that you always mean to do but don't have the chance". This included renovating his old house and working in his garden. When he wasn't doing that, he threw himself into his hobbies, such as motor sports.

One of the key precedents for gardening leave was set in the 1987 London case of the Evening Standard newspaper v Henderson. This was a spat between newspaper owner Robert Maxwell and the Standard over the latter's head printer. The case ended with the Standard effectively paying the printer for staying in his garden - a result he was very happy with.

While on gardening leave, you are still an employee of your firm. In theory this means it could enforce the leave by asking you to be available throughout the day. However, says Michael Burd of law firm Lewis Silkin, businesses are rarely draconian about this.

"Most gardening leave clauses of any sophistication say, 'We require you to stay away from the office and contacts and that you must let us know how you can be contacted." But, he says, companies rarely enforce such rules.

It usually only happens, he explains, if further negotiations remain to be carried out. "If it is straightforward, generally there is no contact and you are free to do what you want as long as it's not work." He says it is rare for people to violate gardening-leave clauses.

The amount of time allowed for such time off varies. Three months is common in advertising, Mr Forsyth says, "because [the sector] moves pretty quickly". Those in engineering or at board level in FTSE 100 companies may find themselves twiddling their thumbs for a year.

But most people seem relaxed about the prospect of enforced time out.

"You don't see many people getting bored," says Ms Gale. It is a sentiment endorsed by Ms Williams, who says that, when you have been working for four years flat out, "it is a great pleasure to be doing very little for a change". - (Financial Times service)