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Garden leave: what it means for employers and employees

Feb 16, 2024 | Uncategorised

Garden leave (or gardening leave) is a way of arranging things when an employee, usually senior, hands in their notice. The employer asks them not to come to work while keeping them on payroll for the duration of their notice. The main aim is to stop them from starting work straight away with a competitor or taking clients with them.

Garden leave isn’t a common occurrence – so both employers and employees can sometimes feel unsure about their rights and responsibilities. That’s why we’ve put this guide together to separate the facts from the fiction.

When is garden leave possible?

To be valid, garden leave has to be clearly articulated in your contract. If an employer tries to enforce garden leave out of contract, it can lead to legal difficulties. And if an employee refuses to go on garden leave despite its inclusion in the contract, they too can come a cropper.

It’s most likely to happen if the person placed under garden leave is leaving the company to work for a competitor. Garden leave clips their wings and stops them from making headway in the industry.

While it can be a breather for the resignee, it’s there to protect the employer, not the employee. There’s a reason that garden leave is a “restrictive” covenant – it places limits on what the employee can and can’t do.

What restrictions does garden leave involve?

When on garden leave, the employee can’t perform any service for the company, attend the company premises, use company equipment or talk business with customers, suppliers or colleagues.

But crucially, they’re still an employee and keep all of an employee’s rights: the right to receive the agreed salary, the right to contractual benefits and the right to sick leave, parental leave and protection from discrimination.

Once on garden leave, you can’t work for another employer, work as a sole trader or do anything that could be construed as working against the employer’s interests.

Despite these restrictions, the employee has to be available to help the manager with the handover. This can be an aggravating factor for some employees on garden leave.

Before handing in your notice, it’s worth checking your contract to see if garden leave is an option.

Scenario 1: your contract includes a garden leave clause

If there’s a garden leave clause in your contract, your employer has the right to make you stay at home – and so long as the contract is valid, you have to go along with it.

Scenario 2: your contract doesn’t include a garden leave clause

If, on the other hand, your employer orders you to go on garden leave and it’s not in your contract, it counts as a breach of contract. In this situation, you’re within your rights to leave early.

What’s in it for the employer?

An employer is likely to enforce garden leave if the employee is seen as a threat to the business interests of the company. It keeps the employee away from confidential company data and prevents them from poaching customers or colleagues. It also ensures that the employee is available to help with the handover process.

What are the risks for employers?

Garden leave is a low-risk strategy so long as there’s an unambiguous garden leave clause in the contract of employment. If there isn’t, you could face a claim of breach of contract – and lose the right to enforce any other restrictive covenants in the process.

Another risk relates to the length of the notice period in question. If your employee’s notice period lasts longer than six months, you might not be able to enforce garden leave for the full period. A court would probably decide that this period was longer than necessary to achieve your aims.

What happens to your salary on garden leave?

If you’re an employee on garden leave, you should continue to receive your usual salary and contractual benefits: a company car, say, or gym membership. You continue to accrue holiday and may, on occasion, be asked to take some or all of it.

Is garden leave always a bad thing for employees?

From one point of view, garden leave is a positive experience. It allows you to take paid leave, albeit with restrictions. From another point of view, it’s an obstacle to career progression or simply an obstacle to job satisfaction.

Can you request garden leave?

Yes – if you’re going through constructive dismissal or redundancy, you can request to be placed on garden leave. It’s most commonly seen in situations where there’s been a significant breakdown between the employee and employer.

If you do request to go on garden leave, it can be advisable to seek legal advice beforehand.

Why is it called garden leave?

The term “garden leave” comes from the British Civil Service. It originally referred to leave under exceptional circumstances but became a euphemism for “suspended”. An employee would be put on garden leave (i.e. sent home) when awaiting the result of an enquiry into their conduct.

The term penetrated the public consciousness after being used in a 1986 episode of British sitcom Yes, Prime Minister.

Conclusion

Garden leave isn’t a common occurrence in the world of work. This means employers and employees can sometimes find themselves at cross purposes when it comes up.

If you’re an employee, it’s important to check your contract and know your rights. And if you’re an employer, it can be advisable to seek legal instruction before drafting a garden leave clause in a contract. Taking these steps will minimise the chances of bad blood and legal action down the road.

Do you need legal advice relating to garden leave? At Milners Law, we have a team of experienced, no-nonsense employment lawyers who can talk you through your options. Get in touch for a free, no-obligation consultation.

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