Garden Leave: Employer's Guide
Using garden leave during notice periods. When to use it, enforceability, employee rights, and drafting effective clauses.
Garden leave keeps departing employees away from sensitive information while maintaining the employment relationship. Understanding the rules helps you use it effectively.
What Is Garden Leave?
During garden leave:
- Employee serves their notice period
- They don't attend work or perform duties
- They receive full pay and benefits
- They remain employed (bound by employment duties)
- They cannot work elsewhere
Name origin: The employee can spend time "in the garden" instead of at work.
Why Use Garden Leave?
Protecting the Business
- Sensitive information: Keep employee away from latest developments
- Client relationships: Prevent poaching during notice
- Team morale: Avoid disruption from someone leaving
- Competitor moves: Delay their start at competitor
When It's Most Useful
- Senior employees with strategic knowledge
- Salespeople with client relationships
- Employees joining competitors
- During redundancy processes
- When trust has broken down
Legal Requirements
The Implied Duty to Provide Work
Courts recognise employees may have a right to work, particularly:
- Senior/skilled employees
- Those whose skills may atrophy
- Roles where reputation depends on activity (e.g., journalists)
- Commission earners
Without an express clause, garden leave may breach this duty.
The Express Garden Leave Clause
A contractual clause gives you clear authority to:
- Require employee to stay away from work
- Allocate them no duties
- Require them to remain available
- Prohibit working for others
Drafting an Effective Clause
Essential Elements
- Right to exclude from workplace: Clear authority to require employee to stay away
- Right to remove duties: Ability to require no work
- Requirement to remain available: Employee must be contactable
- Prohibition on other work: Cannot work elsewhere during garden leave
- Continuation of obligations: Existing duties remain (confidentiality, etc.)
Sample Garden Leave Clause
"The Company may at any time during your notice period require you to:
(a) remain away from the Company's premises; (b) not contact or deal with clients, customers, suppliers, or employees; (c) return all Company property; (d) refrain from performing some or all of your duties; (e) not work for any other person during this period.
During any such period, your contract of employment will continue and you will continue to receive your salary and contractual benefits. All other terms of your employment, including duties of confidentiality and fidelity, will remain in force.
The Company reserves the right to require you to work during all or part of your notice period."
Implementing Garden Leave
Timing
Can be invoked:
- When employee resigns
- When you give notice
- At any point during notice period
- Can start immediately or after handover
Communication
Inform the employee in writing:
- They are being placed on garden leave
- From what date
- What they must do (stay available, return property)
- What they must not do (attend work, contact clients)
- Confirmation of pay and benefits
Sample Letter
Dear [Name],
Following your resignation dated [date], I write to confirm that you will be placed on garden leave for the duration of your notice period.
From [date], you are required to:
- Remain away from Company premises
- Not contact clients, customers, or colleagues about business matters
- Return all Company property
- Remain available during normal working hours
- Not undertake any work for another employer
Your salary and benefits will continue throughout this period. Your obligations of confidentiality and fidelity continue in full force.
Your last day of employment will be [date].
Please confirm receipt of this letter.
Employee's Position
What They Receive
During garden leave:
- Full salary
- Contractual benefits (car, health insurance, etc.)
- Pension contributions
- Holiday continues to accrue
What They Must Do
- Remain available during working hours
- Respond to reasonable requests
- Return company property
- Maintain confidentiality
- Not work for anyone else
What They Cannot Do
- Attend workplace
- Contact clients/customers
- Conduct business activities
- Work for another employer
- Breach confidentiality
Relationship with Restrictive Covenants
How They Interact
Garden leave: Keeps employee tied during notice period. Restrictive covenants: Restrict activities after employment ends.
Both can apply - garden leave during notice, then covenants after termination.
Court's Approach
Courts may:
- Reduce covenant period by length of garden leave
- Consider total restriction period when assessing reasonableness
- View combined effect holistically
Example: 6-month garden leave + 12-month non-compete may be reduced to 6-month non-compete.
Best Practice
- Have both garden leave clause and covenants
- Draft covenants to survive garden leave
- Consider total restriction when setting covenant length
- Specify covenants run from termination, not resignation
Enforcing Garden Leave
If Employee Breaches
Options if they start working elsewhere during garden leave:
- Seek injunction to prevent breach
- Reminder of contractual obligations
- Withhold remaining pay (carefully)
- Claim damages
Court's Attitude
Courts generally enforce garden leave clauses:
- Clear contractual right
- Employee receiving pay
- Reasonable protection of legitimate interests
May refuse if:
- No express clause
- Period is unreasonably long
- Clause is unduly wide
Payment in Lieu of Notice (PILON)
Garden Leave vs PILON
| Garden Leave | PILON |
|---|---|
| Employment continues | Employment ends immediately |
| Full pay and benefits | Payment for notice period (may be taxable) |
| Employee bound by duties | Post-termination covenants apply |
| Benefits continue to accrue | Benefits end |
| Covenants may run from termination | Covenants run immediately |
Choosing Between Them
Garden leave better when:
- Want employee bound by employment duties
- Covenants need time to take effect
- Benefits continuation is acceptable
- Want to keep options open
PILON better when:
- Want clean break immediately
- Covenants start running immediately
- Want to avoid ongoing benefit costs
- Relationship completely broken down
Common Issues
No Contractual Clause
Risk: Breach of implied duty to provide work.
Solutions:
- Negotiate agreement with employee
- Offer something in return (enhanced pay, reference)
- Consider PILON instead
- Short period may be acceptable
Length of Garden Leave
Issue: Very long garden leave periods may be challenged.
Guidance:
- Must be reasonable
- Consider employee's role and seniority
- 3-6 months common for senior roles
- Courts more likely to enforce shorter periods
Commission Earners
Issue: Sales staff may argue garden leave affects earnings.
Solutions:
- Continue commission at average rate
- Clear contractual provision
- Consider impact on covenants
Holiday During Garden Leave
Employee can:
- Request holiday as normal
- You can require them to take accrued holiday
You should:
- Clarify holiday position in garden leave letter
- Track accrued vs taken holiday
- Pay out untaken holiday on termination
Practical Tips
Before Employment
- Include comprehensive garden leave clause in contract
- Link to restrictive covenants
- Make provisions for property return
During Employment
- Keep contracts up to date
- Document who has client relationships
- Prepare garden leave letters in advance
At Notice Stage
- Act quickly to implement garden leave
- Communicate clearly in writing
- Secure company property and access
- Brief relevant staff
During Garden Leave
- Monitor for breaches
- Respond to reasonable queries
- Prepare for termination
- Document any issues
Checklist
Contract Stage
- Garden leave clause included
- Clause covers all key elements
- Links to restrictive covenants
- Property return provisions
Implementing Garden Leave
- Written confirmation provided
- Clear date from which it applies
- Obligations explained
- Property returned
- Systems access revoked
- Clients/team notified appropriately
During Garden Leave
- Pay and benefits continue
- Employee availability checked
- Monitoring for breaches
- Holiday position clarified
- Termination date tracked
At Termination
- Final pay calculated correctly
- Holiday pay included
- Covenants confirmed
- Exit documentation complete
Related answers
Notice Periods UK: Employer's Guide
Statutory and contractual notice periods explained. How much notice to give, payment in lieu, garden leave, and handling notice period issues.
Restrictive Covenants: Employer's Guide
Using post-termination restrictive covenants. Non-compete, non-solicitation, non-dealing clauses - drafting, enforceability, and practical guidance.
Constructive Dismissal: What Employers Need to Know
Understanding constructive dismissal claims. What triggers them, how to avoid them, and what to do if an employee resigns claiming breach of contract.
Frequently Asked Questions
- What is garden leave?
- Garden leave is when an employee serves their notice period but doesn't come to work. They remain employed, receive full pay and benefits, but stay away from the workplace. It's often used for senior employees or those going to competitors.
- Can I put an employee on garden leave without a contractual clause?
- It's risky. Without an express garden leave clause, you may be breaching the implied duty to provide work (especially for senior roles). The employee might claim constructive dismissal or argue their restrictive covenants are unenforceable.
- Does garden leave replace restrictive covenants?
- Garden leave can work alongside restrictive covenants. Courts may reduce the length of post-termination restrictions by the garden leave period, as the employee has already been out of the business. It's best to have both.