Dismissal While on Garden Leave

Garden leave is when you remain employed during your notice period but don't work. Dismissal during this period raises specific legal issues.

What Is Garden Leave?

Definition

Garden leave means:

• You've given or been given notice
• You remain employed during notice period
• You're not required to work
• You stay away from workplace
• You continue to be paid
• Contract remains in force

Why Employers Use It

Common reasons:

• Prevent contact with clients
• Protect confidential information
• Remove access to systems
• Prevent poaching of staff
• Serve out restrictive covenants
• Smooth transition to competitor

Can You Be Dismissed During Garden Leave?

Legal Position

Yes, but with conditions:

Scenario	Lawful?
Dismissal for gross misconduct	Yes (if proper process)
Summary dismissal without cause	No (wrongful dismissal)
Shortening notice by agreement	Yes (if both parties agree)
Unilateral termination without cause	No (breach of contract)

Notice Period Protection

While on garden leave:

• Your notice period is running
• You're entitled to full notice pay
• Employment continues until notice expires
• Employer cannot arbitrarily cut it short
• Contract terms still apply

Dismissal for Gross Misconduct

During Garden Leave

If you commit gross misconduct while on garden leave:

• Employer can still dismiss summarily
• Must follow proper disciplinary process
• Garden leave pay stops from dismissal date
• Notice period no longer applies
• Must be genuine gross misconduct

Examples

Potential gross misconduct during garden leave:

• Breaching confidentiality obligations
• Soliciting clients (if prohibited)
• Accessing company systems without authorization
• Working for competitor (if breach of contract)
• Deliberately damaging company interests

Process Still Required

Even on garden leave, employer must:

1. Investigate the alleged misconduct
2. Invite you to disciplinary hearing
3. Allow you to respond
4. Consider evidence fairly
5. Give right of appeal

Wrongful Dismissal

What It Means

Wrongful dismissal during garden leave occurs if:

• Dismissed without notice or pay in lieu
• No valid reason for summary dismissal
• Contractual notice not honored
• Employer acts in breach of contract

Your Rights

If wrongfully dismissed during garden leave:

• Entitled to full notice pay
• Can claim damages for breach of contract
• Additional claims if unfair dismissal applies
• Compensation for loss of notice period

Damages

Typically limited to:

• Notice pay you would have received
• Benefits during notice period
• Potentially bonus if contractual
• Usually net, not gross, loss

Payment During Garden Leave

Continuing Obligations

While on garden leave, employer must pay:

• Full salary
• Contractual benefits
• Pension contributions
• Holiday accrual
• Any contractual bonuses

If Dismissed

Upon dismissal during garden leave:

If Gross Misconduct	If No Valid Reason
Pay stops from dismissal date	Full notice pay due
No further benefits	Benefits continue in notice
Summary termination	Breach of contract claim

Payment in Lieu

Some contracts allow payment in lieu of notice (PILON):

• Employer can terminate immediately
• Pays sum equivalent to notice period
• Must be express contractual right
• Different from wrongful dismissal

Shortening Garden Leave by Agreement

Mutual Consent

You and employer can agree to:

• Shorten the garden leave period
• Terminate employment early
• Negotiate exit terms
• Reduce notice by agreement

Settlement Agreement

Common approach:

• Formal written agreement
• Agreed leaving date
• Payment terms confirmed
• Claims waived
• Both parties protected

Get It in Writing

Always document:

• New agreed leaving date
• Payment arrangements
• Any compensation
• Reference terms
• Waiver of claims

Your Obligations During Garden Leave

What You Must Still Do

Even on garden leave:

• Remain employed by company
• Comply with contract terms
• Maintain confidentiality
• Honor restrictive covenants
• Be available for queries (usually)
• Not work for competitor (if prohibited)

What You Cannot Do

Typical restrictions:

• Work for competitor
• Solicit clients or employees
• Use confidential information
• Access company systems
• Represent yourself as employee elsewhere

Breach of Garden Leave Terms

If you breach terms:

• May constitute gross misconduct
• Could justify summary dismissal
• Loss of notice pay
• Potential damages claim against you
• Injunction possible

Redundancy During Garden Leave

Can You Be Made Redundant?

Yes, if:

• Redundancy situation is genuine
• Proper consultation conducted
• Fair selection process
• Alternative roles considered
• Notice pay or redundancy pay provided

Enhanced Rights

Garden leave doesn't reduce rights to:

• Redundancy consultation
• Suitable alternative employment
• Redundancy payment
• Notice period or PILON

Discrimination and Garden Leave

Protected Acts

Cannot be dismissed during garden leave because of:

• Protected characteristic
• Pregnancy
• Whistleblowing
• Health and safety concerns
• Asserting statutory right

Automatic Unfair Dismissal

Even on garden leave, certain dismissals remain automatically unfair:

• Pregnancy-related
• Whistleblowing
• Health and safety
• Asserting statutory rights

Notice Period Issues

Counting Garden Leave

Garden leave counts as part of:

• Statutory notice period
• Contractual notice period
• Continuous employment
• Holiday accrual

If Notice Shortened

If employer tries to shorten notice during garden leave:

• Check if contract allows PILON
• Consider if agreement reached
• Assess if wrongful dismissal
• Calculate losses

Practical Steps

If Placed on Garden Leave

1. Understand terms - what you can and cannot do
2. Get it in writing - garden leave letter
3. Clarify obligations - availability, handover
4. Document everything - communications, payments
5. Comply with terms - avoid breaching contract

If Dismissed During Garden Leave

1. Request written reasons
2. Check if process followed
3. Calculate notice pay due
4. Review contract terms
5. Consider settlement discussions
6. Seek legal advice
7. Check time limits - for claims

If Considering New Role

While on garden leave:

• Review restrictive covenants
• Check if new role breaches terms
• Consider asking for early release
• Don't start until employment ends
• Get legal advice if uncertain

Challenging Dismissal

Types of Claim

Depending on circumstances:

Claim	When Applicable
Wrongful dismissal	Notice not given, breach of contract
Unfair dismissal	If 2 years' service, unfair reason
Discrimination	If protected characteristic
Automatic unfair	Whistleblowing, pregnancy, etc.

Time Limits

• Tribunal claims: 3 months less 1 day
• Contract claims: 6 years (usually tribunal within 3 months)
• ACAS early conciliation required first

Potential Remedies

• Notice pay
• Loss of benefits
• Compensation (unfair dismissal)
• Interest
• Legal costs (contract claims in court)

Employer Best Practice

Before Dismissing

Consider:

• Is there valid reason?
• Has process been followed?
• Can notice period be honored?
• Could settlement be reached?
• What are legal risks?

Process

If dismissing during garden leave:

1. Ensure valid reason exists
2. Follow proper procedure
3. Document decision-making
4. Communicate clearly in writing
5. Calculate payments correctly
6. Offer appeal right

Key Differences

Garden Leave vs Dismissal

Garden Leave	Dismissal During Garden Leave
Notice period running	Employment terminated early
Still employed	No longer employed
Full pay continues	May lose remaining notice pay
Contract in force	Contract terminated
Benefits continue	Benefits cease

PILON vs Wrongful Dismissal

PILON (Lawful)	Wrongful Dismissal
Contractual right	Breach of contract
Agreed mechanism	Without agreement
Pre-determined	Arbitrary
No breach	Claim available

Summary

Key Points

• Garden leave is part of your notice period
• Dismissal during garden leave must be justified
• Notice pay remains due unless gross misconduct
• Process must still be followed
• Can agree to shorten by mutual consent
• Wrongful dismissal claim if terminated without cause

For Employees

• Know your garden leave terms
• Comply with obligations
• Document all communications
• Don't breach contract terms
• Seek advice if dismissed
• Understand your rights to notice pay

For Employers

• Garden leave doesn't remove disciplinary obligations
• Follow proper process before dismissing
• Honor notice periods unless valid reason
• Consider settlement if appropriate
• Document all decisions
• Take legal advice on termination