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What is garden leave and how can it affect your business?

‘Garden leave’ describes a period when employees are serving out their notice period but are not required to attend work; either because there is no work for them to do or because the employer is concerned that their attendance at work could cause problems.

Garden leave originated with employers that wanted their employees to adhere to a deliberately lengthy notice period. This could delay a move to a competitor or ensure a time period where sales bonuses could not be won. Situations such as these can often be disruptive. Note that garden leave can only commence once the employee has been given formal notice of dismissal or has served notice of their resignation.

Whilst on garden leave, the individual remains an employee and is therefore still entitled to their basic pay and contractual benefits even though they may not be required to undertake any work. The employer may however recall the employee back to work if necessary.

Garden leave recommendations

We recommend a garden leave clause in employment contracts to protect your business, which allows you also to:

  • Require the employee not to attend the business premises
  • Prohibit the employee from contacting clients, customers or colleagues
  • Require the employee to gain prior permission before accepting alternative work or being banned from doing so.

Alternatives to garden leave

If you do not have a garden leave clause, you may prefer to provide some form of work for the individual(s) to do. This will protect you from a breach of contract claim. The employee may also feel that the requirement not to work means that they will lose some of their skills.

For example, to keep a TV or radio journalist on garden leave for months would diminish the profile of that person and mean that it may be harder to get work afterwards. Such a clause, if too lengthy, would not be sustained.

Garden leave can, in certain cases, be enforced even where there is no contractual right, however, we would still advise that it is still preferable to leave your options open, and include a garden leave clause in your contracts for those to whom you may wish it to apply. If poaching of clients/customers or staff is the issue, then an alternative would be to have robust restrictive covenants.

Contact us today to find out more about garden leave and how our HR services can help your business.


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