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A group of my friends was celebrating one of our group securing a new job, and he was complaining about having to continue working at his old job for his 3 month notice period, we started discussing humorous ways that he could force his company to immediately terminate his contract.

One of the group mentioned that his company had a policy for employees who had accepted a role with a competitor of immediately escorting the employee off the premises and placing them on gardening leave.

Assuming my employer had a similar policy, and I secured a role with company A (who aren’t a competitor of my current employer), but I told my manager that I had secured a role with company B (who are a competitor) in an attempt to secure gardening leave. Have I committed fraud?

feetwet
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Ben
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    *"I'm planning to lie in order to achieve a financial advantage, is that fraud?".* - Yes, this is the textbook definition of fraud. – Richard Apr 29 '19 at 17:22
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    "lying to get [...]" is pretty much fraud. – Koray Tugay Apr 29 '19 at 18:07
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    Well, you are under no obligation to inform them you have accepted a role at either A or B - I'd frame it as "I will neither confirm nor deny my new employer - due to a non-disclosure agreement." (which is an agreement you can make with your wife or your friend - doesn't have to be a company) And then - simply because you could be employed at company B, they should in theory have to "garden leave" you. – Stian Apr 29 '19 at 21:17
  • @Richard No, that's not the textbook definition of fraud. See https://definitions.uslegal.com/f/fraud/ – Acccumulation Apr 29 '19 at 22:02
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    Lying would be fraud, but unless the leaving employee is obliged to tell who is his new employer, not telling and not clearing the suspicion that he could be working for a direct competitor could be enough. – Pere Apr 29 '19 at 22:23
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    @Acccumulation - "an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage." - Stripped of lawyer-talk, that's precisely what it means – Richard Apr 29 '19 at 23:30
  • @Richard Whether the person going to a competitor is a "material fact" is nontrivial. – Acccumulation Apr 29 '19 at 23:56
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    @Acccumulation - Saying that you are (when you aren't) is a non-trivial fact since it changes the likely action of the employer.. – Richard Apr 30 '19 at 00:00
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    It may be worth noting that the purpose of gardening leave is so that you are not working for the competitor in that period. It is not so that you can go and work. I suspect you will find that you are still employed by the first employer while on gardening leave, and in breach of your employment contract if working for anyone else at that time. – GreenAsJade Apr 30 '19 at 00:13
  • @Richard Simply because someone chooses to act on a piece of information, does not make it material. If a gay person knows that a potential employer is bigoted against gay people, and so claims to be straight, that's not fraud, even if the employer would not have hired if they had known, because sexual orientation isn't material to employment. – Acccumulation Apr 30 '19 at 00:15
  • @Acccumulation - There are always exceptions. That's why we have lawyers, after all. – Richard Apr 30 '19 at 00:18
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    OP, please very carefully check your contract. Companies with this sort of anti-competition process usually have clauses in there where you have agreed not to work for a direct competitor for a period of time after leaving them, potentially with financial penalties. Even if you are not actually going to work for the competition, you may have given them sufficient cause to trigger these clauses. (Their purpose is to prevent "insider-trading" loopholes where you leave and take their data and strategies to another company. The time period is to ensure your information becomes outdated) – Chronocidal Apr 30 '19 at 08:22
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    @Richard That may be, but proving intent is rather difficult, unless you post your intent to the Internet beforehand ;) – Fax Apr 30 '19 at 10:46

1 Answers1

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Yes, that would be fraud.

From the Fraud Act 2006:

2: Fraud by false representation

1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

(i) to make a gain for himself [...]

By saying that you had got a position with a competitor you would be dishonestly (i.e. you knew it was a lie) making a false representation. Your purpose was to obtain gardening leave, which is a gain for yourself.

Paul Johnson
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    Not only is it a gain for the OP, but it is a loss for the business. The 3 month period offers the employer a chance to transition in an effective and smooth way. Just up and getting rid of somebody means that they have a hardship to fill that position and possibly train the replacement. There is a non-zero financial burden there. – Ron Beyer Apr 29 '19 at 13:59
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    @RonBeyer True, but not necessary for an offence of fraud. – Paul Johnson Apr 29 '19 at 14:17
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    @Ron: the loss is because of the company's policy, not OPs action. It's even doubtful whether a civil action would succeed if the employee expressed a willingness to work out his notice, though criminal proceedings would he hard to defend. – Tim Lymington Apr 29 '19 at 16:51
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    @TimLymington: That seems to be a very narrow view of causation. Suppose a mugger says "you can give me all your money or you can fight me for it; I'm happy either way", would you then say that the victim's loss of his money was caused not by the mugging but by his voluntary decision not to fight back? – hmakholm left over Monica Apr 29 '19 at 18:37
  • @PaulJohnson Would the same hold true if it wasn't a documented policy but a common practice of the company? If there is nowhere stating that the employee will get gardening leave and themselves do not ask for it can intent be established? – Myles Apr 29 '19 at 19:06
  • It also should be noted that $employee will likely be walked out of the door as soon as they mention their intent to leave. No other conditions apply. – John Dvorak Apr 29 '19 at 19:07
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    @JohnDvorak thats a very US way of thinking - in the UK, the company can either hold the employee to their notice period, or place them on gardening leave for the duration of their notice period, or mutually agree an immediate end of the employment with a payment being made in lieu of the notice period by the company. The whole "walk them out the door" thing doesn't really happen in Europe, due to employment laws working in the employees favour - the employer cannot retaliate to a resignation with notice by firing the employee. –  Apr 29 '19 at 21:44
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    @Ron: It is legal to quit, and you are then entitled to be paid for the notice period specified in your contract (typically a month). It is the company's choice whether to ask you to work that month (and e.g. hand over to your successor) or to stay at home on gardening leave. Either way, I see no reason for a lawsuit. As moo says, in Europe employees have as many rights as employers if not more. – Tim Lymington Apr 29 '19 at 22:02
  • @Moo: "walk them out of the door" refers to the physical removal of the employee from the premises, not firing. UK employment law is fine with "gardening leave" during a notice period. – Paul Johnson Apr 30 '19 at 06:50
  • @Myles If the policy were informal and only sporadically enforced it would still be an offence to attempt to trigger it by lying because the element of "intends [...] to make a gain" would still be there. – Paul Johnson Apr 30 '19 at 06:53
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    @PaulJohnson every time I have heard that mentioned before, it's in regard to "right to work" states where your employment is ended that day, with no ongoing notice period, or payment made in lieu. It does not seem to be commonly used to refer to gardening leave or payment in lieu of notice. As I note in my comment, gardening leave is one of the options open to UK companies. –  Apr 30 '19 at 06:54
  • It's also worth noting that in my more than 20 years experience in the UK employment market, I have only ever seen anyone given gardening leave once (account manager at a financial advisors) or payment in lieu of notice once (colleague for reasons I can't discuss). Neither are particularly common in the UK. –  Apr 30 '19 at 06:58
  • @Moo An even less common reason: I and a few colleagues got gardening leave while our then employers were sorting out compensation to make us redundant, having moved our jobs 350 miles away. It took a year. Once they were in a position to give us a final date, we then got payment in lieu of notice to get rid of us as quickly as possible. – Andrew Leach Apr 30 '19 at 10:39
  • Time off isn't money or other property, so arguably they see no 'gain' under the statute. From the statute: '(2)“Gain” and “loss”—

    (a)extend only to gain or loss in money or other property;' -- in short, see an actual lawyer (there is going to be case law, and in the UK case law matters). The "loss" is another thing; losing the benefits of the employee is likely to be a loss to the business.

     – Yakk Apr 30 '19 at 14:37
  • @Yakk Gardening Leave is time off with pay, you gain free time and pay at the same time under false premises. – Sarriesfan May 02 '19 at 03:18
  • @Sarriesfan You are due the pay regardless; the deception earns you "time off work", which is not "money or other property". But yes, the courts and case law could disagree. – Yakk May 02 '19 at 04:03
  • @Yakk but you are telling the company you work for that you are currently work for that they cannot use you for the working hours you are being paid for. Imagine company A makes widgets and company B does not when you give notice at A they are happy for you to continue working for them until your notice is up because there is no conflict of interest. But by telling A you are moving to C their competitor in the widget industry you are deceiving them into believing you should be on gardening leave to protect some of the information about widget contracts, sales etc that A has. – Sarriesfan May 04 '19 at 18:30