William Hill Organisation Ltd v Tucker

Whether an employer may place an employee on garden leave depends on the construction of the particular contract in its surrounding circumstances. The decisive inquiry is whether the employer’s contractual consideration is confined to remuneration or includes an obligation to permit the employee to perform the work.

Where the contract requires the employer to afford work, an express garden-leave power is ordinarily required to release it from that obligation. Such an obligation may arise where the employee holds a genuinely specific and specialised post, needs regular practice to preserve or develop skills, and the contractual terms contemplate active performance and development.

An injunction enforcing garden leave should extend no further than a justifiable covenant in restraint of trade.

The employer operated a spread-betting business. Mr Tucker was its sole senior dealer. His contract required six months’ notice, but contained no express garden-leave clause. After he gave notice to join a competitor, the employer told him not to attend work while continuing his salary and benefits.

The employer sought an injunction restraining competitive employment during the notice period. A deputy judge in the Queen’s Bench Division dismissed the application. He held that the employer had breached an implied obligation to provide Mr Tucker with work. The employer appealed, and Mr Tucker challenged the alternative conclusion that an injunction would otherwise have been appropriate for three months.

The central issue was whether the employer could exclude Mr Tucker from his specialised role on full pay during notice in the absence of an express contractual power.

1. Appeal dismissed unanimously. Lord Justice Morritt gave the leading judgment, with which Lord Justice Robert Walker and Lord Justice Stuart-Smith agreed. The employer was contractually obliged to permit Mr Tucker to perform the duties of his post during his notice period. Its instruction that he stay away from work was therefore a repudiatory breach, which deprived it of a subsisting contract capable of supporting the injunction.

2. There is no free-standing general “right to work”. The issue is one of contractual construction in the light of the surrounding circumstances. Applying the inquiry formulated in Langston v AUEW (No 2), [1974] ICR 510, the court asked whether the consideration provided by the employer extended beyond remuneration to an obligation to allow the employee to do the work.

3. The circumstances and express terms established such an obligation here. Mr Tucker held a genuinely specific and unique senior-dealer post in a new, specialised business. His skills required frequent market experience to be maintained and enhanced. The contract required professional performance of his duties, committed the employer to employees’ skill development, and contained a limited suspension power. Those features were inconsistent with a general right to keep him idle while retaining him in employment.

4. The court gave general guidance on garden leave. If the employer’s consideration is limited to payment, it may require the employee to stay away despite having no express garden-leave power. If the contract includes an obligation to permit work, the employer requires an express contractual power to displace that obligation; an implied power will be unlikely.

5. The judge’s alternative discretionary assessment did not require determination. Lord Justice Morritt nevertheless observed that interlocutory enforcement of a garden-leave clause must be justified on grounds comparable to those required for a valid employee covenant in restraint of trade.

• Court of Appeal (Civil Division): Dismissed the employer’s appeal and upheld the refusal of an injunction. The appeal was brought from the Queen’s Bench Division.
• High Court of Justice, Queen’s Bench Division: A deputy judge dismissed the employer’s application for an injunction, holding that the employer had breached an implied obligation to provide the employee with work during notice.