Definition and Types of Restrictive Covenants
The following restrictive covenants are recognised and may be enforceable under the law:
- Non-compete clauses;
- Non-solicitation of customers;
- Non-solicitation of employees.
Enforcement of Restrictive Covenants—process and remedies
Covenants are normally combined with a contractual penalty. The penalty shall be reasonable in relation to the employee’s salary. Normally such penalty for each breach of the clause is set to between three and six months’ salary. Furthermore, restrictive covenants may also be combined with a continuing penalty.
Use and Limitations of Garden Leave
The employer may under certain circumstances unilaterally release the employee from the duty to perform work during the notice period. When the parties agree on a mutual separation, it is common to agree also on a release from work, i.e. garden leave.