SOMETIME in April 2002, respondent Wrigley Philippines Inc. (WPI) engaged the services of petitioner Gertrudes D. Mejila, a registered nurse, as an occupational health practitioner for its Antipolo manufacturing facility.
On Oct. 26, 2007, WPI sent a memorandum to Mejila informing her that her position has been abolished due to redundancy and that her employment will be terminated effective Nov. 26, 2007. The memorandum stated that Mejila is no longer required to work beginning the same day, Oct. 26, although her salary will be paid until Nov. 26.
In a complaint for illegal dismissal filed by Mejila against WPI, the Court of Appeals (CA) did not give credence to Mejila’s claim of lack of notice before dismissal. It upheld WPI’s assertion that the notice did not immediately cause her severance from work.
Did the CA err? Ruling: No.
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.” 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. During the period of garden leave, employees continue to be paid of their salary and any other contractual benefits as if they were rendering their services to the employer.
In the United Kingdom (UK), where the practice originated, the garden leave clause has been used as an alternative to post-employment non-competition covenants. The employee remains employed for the period of the leave but is expected to do no work; he could, then, “stay home and tend the garden.” The 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. Since the employee remains an “employee,” he remains bound by a duty of loyalty and, thus, cannot go to work for a competitor or do anything else to harm the employer. This arrangement provides employers with the protection they need, is fair to employees, and has been generally accepted and enforced by the UK courts. The practice has been adopted by employers in the United States, and their courts have generally upheld garden leave clauses.
In the Philippines, garden leave has been more commonly used in relation to the 30-day notice period for authorized causes of termination. There is no prohibition under our labor laws against a garden leave clause in an employment contract. (Gertrudes D. Mejila vs. Wrigley Philippines Inc., et al., G.R. 199469, Sept. 11, 2019).