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Joanne O’Connell
12 min read

An employer’s guide to managing Gardening Leave

Gardening leave offers unique benefits and challenges for both employers and employees. Discover how it works, when to use it, and key legal considerations to keep in mind.

An employee shutting their laptop down as they prepare to go on Gardening Leave

Gardening leave can often seem like a win-win situation for both parties.

For employers, it provides a way to protect their organisation when an employee resigns. From an employee’s perspective, it can be a welcome period of paid time off, offering them a chance to recharge and prepare for their next career move.

However, gardening leave isn’t without its complexities. From financial costs to legal risks, navigating the fine print can be challenging for employers.

In this guide, we’ll provide a comprehensive look at gardening leave—what it is, how it works, and the key considerations you should keep in mind, including important information about gardening leave employee rights.

What is Gardening Leave?

When an employee hands in their notice, an employer has three main options:

  1. Allow the employee to work out their notice as usual, until their last day.
  2. End the contract immediately and pay the employee in lieu of notice.
  3. Place the departing employee on Gardening Leave.

Gardening Leave (also known as Garden Leave) is when an employee is suspended from work, on full pay, for the duration of their notice period.

Typically, Gardening Leave rules mean that the employee must stop working and have no contact with colleagues, clients, customers, or their usual business relationships. This protects the business’s interests as the departing employee is unable to:

  • Poach any existing contacts
  • Recruit colleagues to join a competitor
  • Access commercially sensitive information

Importantly, Gardening Leave pay means an employee is still paid and receives their usual benefits but is not at work (or working from home).

Why is it called Gardening Leave?

The term Gardening Leaves comes from the idea that you are at home and have lots of time to tend to your garden while you’re not at work.

Simply put, when an employee is placed on Gardening Leave, they can spend time on their hobbies (such as DIY or gardening) because they are not required to work for their current employer or allowed to work for another organisation.

Legality of Gardening Leave

In some instances, an employer will include a clause about Gardening Leave in an employment contract, which allows them to put employees on Gardening Leave before they start a new job.

However, even if there isn’t a clause in the contract, there may still be an implied right to put an employee on Gardening Leave. This is because an employee doesn’t have a right to work but has a right to be paid. And with Gardening Leave, while the employee is suspended from work, they still receive full pay.

How long does a period of Gardening Leave last?

The Garden Leave period depends on when the employer places their employee on Gardening Leave, which can be at any time during their notice period.

Gardening Leave lasts for as long as the employer wants, even if that means from start to finish. However, it cannot be longer than the notice period.

Why use Gardening Leave?

Employers typically place employees on Gardening Leave when they have handed in their notice because they don’t want them to engage with the organisation’s affairs anymore.

A common reason employers place an employee on Gardening Leave is when the individual has given notice to leave the company to begin working for a competitor. To protect their interests, employers may decide it’s best to keep the employee away during the notice period, ensuring they do not have access to sensitive commercial information that could be passed on to the competition.

Pros of Gardening Leave

Gardening Leave offers employers strategic advantages that can help safeguard their interests when a key member of staff moves on, such as:

  • Preventing departing employees from joining competitors immediately, buying time to solidify client relationships and reassign key responsibilities.
  • Allowing employers greater control over the transition, reducing the risk of employees influencing or poaching staff for their new role.
  • Limiting access to sensitive commercial information, such as client lists, business strategies, and pricing details, that could be shared with competitors.
  • Supporting a positive workplace culture by removing potentially disengaged employees, helping to maintain morale among remaining staff.

Cons of Gardening Leave

Despite its benefits, gardening leave also has potential drawbacks for employers, including:

  • Requiring the employer to continue paying the departing employee’s salary, often with no direct productivity benefit.
  • Providing paid time that could inadvertently help the employee set up a competing business or prepare for their next role.
  • Posing legal risks if not implemented properly, which can result in claims of constructive unfair dismissal, breach of contract, or wrongful dismissal.
  • Failing to fully protect the business if the employee has already prepared to take clients or customers with them.

When to use Gardening Leave

Gardening Leave is a defensive step. It is used when an employer decides it’s better to keep someone employed and paid, but not working instead of allowing them to work out their notice.

Most of the time employers use Gardening Leave to protect the business from commercial risks, so it tends to be used for senior employees and salespeople, because they are the ones who are most likely to be a threat to the business if they leave to join a competitor.

This is because senior staff and salespeople are more likely to have been given access to clients, customers, and confidential information during their notice period.

For example, a sales director who regularly attends meetings about sensitive pricing information and sales strategies poses a threat to their employer if they work until the last day of their notice period and join their employer’s direct competitor the following week. In that case, putting them on Gardening Leave during their three-month notice period gives the employer time to shift their strategy.

The same is true in order to protect a business relationship with a key client. Putting an employee on Gardening Leave can distance them from clients so there is less chance they are able to take them to a competitor.

When to avoid Gardening Leave

Gardening Leave financially costs employers because they continue to pay a suspended employee who they must also replace. Therefore, before putting anyone on Gardening Leave, employers must consider what they are looking to protect or achieve, and if it is worth the financial cost.

Ideally, employers should avoid putting an employee on Gardening Leave when the cost isn’t worth it, or they don’t have the implied or contractual right to do it.

Employer responsibilities and employee rights during Gardening Leave

Before putting an employee on Gardening Leave, it is important to first check their employment contract.

Usually, they will remain an employee while on Gardening Leave, which means the employer is responsible for continuing to pay them and allowing them access to their contractual benefits. However, the contract may entitle them to basic pay only (and not bonuses, for example).

Employees meanwhile have the right to be paid during their Gardening Leave. Aside from the money, they are still employees, so all the rights and obligations still exist.

In every employment contract, there is a right to trust and confidence. So, if the employer breaches the contract, for example by mistreating the employee, they could potentially raise a grievance or bring a claim for constructive dismissal, despite being on Gardening Leave. However, the employee does not have a right to talk to their colleagues or clients.

Gardening Leave in an employee’s contract

Many employment contracts won’t include a specific Gardening Leave clause. That’s because in practice, employees tend to be content to be put on Gardening Leave and be paid while not having to work during their notice.

This can be agreed upon in discussions when the employee hands in their notice or the employer signals the employee will be leaving the organisation.

Without this agreement or a contract clause, imposing Gardening Leave could be a breach of contract. Therefore, it’s generally best for an employer to speak to the employee who is leaving and reach an agreement about Gardening Leave.

When to include the Gardening Leave clause in an employee’s contract

A Gardening Leave clause should generally be included in contracts for senior employees, as they are more likely to have access to commercially sensitive information and a relationship or contact with important clients and customers.

However, you could also arguably include it for any level of employee. This is because reserving a right to (or clearly reserving the right) to put the employee on Gardening Leave can be useful.

The clause simply gives the employer the option to lawfully place the employee on Gardening Leave. Whether you choose to do so is a matter for the employer at any one time, when an employee serves their notice to leave.

Post-termination restrictions

Another way employers can lessen the risk of ex-employees from competing when they leave, or taking the employer’s customers, is to include what’s called a post-termination restriction in the employment contract.

This gives a length of time after their employment ends when a previous employee can’t try and win business from clients or customers.

These restrictions are sometimes called restrictive covenants, and they are only enforceable if they are seen to be a reasonably necessary way to protect the employer’s business. So, for example, a restriction of 12 months for a senior employee may be reasonable, but 18 months or two years would be unreasonable.

However, when there is a Gardening Leave clause in place, the restrictions potentially go on for too long. For example, if the employee was on Gardening Leave for six months, and then had restrictive covenants for another year, that amounts to 18 months – which may not be enforceable (by law).

As a result, most contracts of employment say that Gardening Leave counts towards post-termination restrictions. In the example above, Gardening Leave would prevent the employee from winning over business for six months. Once their employment has ended, the restrictions are down to six months.

If an employee breaches Gardening Leave

A breach of gardening leave occurs when an employee engages in actions prohibited under the terms of their gardening leave.

This might involve, for example, contacting a customer to discuss future business or, more seriously, performing work that competes directly with their current employer while still officially on gardening leave.

Both situations represent a breach of contract.

Employers should respond promptly to protect their interests. Recommended steps include:

  • Sending a formal notice to the employee, instructing them to cease the prohibited actions immediately and to disclose any actions taken that may affect the business.
  • Requiring the employee to confirm in writing that they will not repeat the behaviour.

In more serious cases, it may be wise to consult an employment lawyer. Legal support can help assess options, including pursuing an injunction to prevent further breaches and, if necessary, seeking damages to cover any financial loss resulting from the breach.

Gardening Leave and settlement agreements

A settlement agreement can be an effective way to incorporate a Gardening Leave clause if the original employment contract doesn’t include one.

A settlement agreement is often used at the end of employment. It’s a legally binding document that resolves any claims an employee may have against their employer and can outline various terms, from an agreed reference to the end date of employment and any financial payments in exchange for leaving.

The purpose is to facilitate a smooth, amicable departure.

When negotiating a settlement agreement, employers can decide whether the employee will work their notice or go on Gardening Leave.

This approach is particularly useful if imposing gardening leave might be challenging, such as when the contract doesn’t originally include a Gardening Leave clause. A settlement agreement provides an opportunity to add this clause, giving the employer the right to place the employee on Gardening Leave if needed.

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