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Garden leave is often seen as a quiet but powerful tool in an employer’s armoury when a senior or commercially sensitive employee resigns or is asked to leave.
Used correctly, it can protect confidential information, client relationships and business stability at a critical moment, but it does come with risks.
So, when does garden leave make sense and when should employers think twice?
What is garden leave?
Garden leave, sometimes referred to as gardening leave, is the practice of requiring an employee who is leaving the business to stay away from work during all or part of their notice period.
The employee remains employed, continues to receive their salary and contractual benefits, but is instructed not to attend the workplace or carry out their usual duties. They are also normally restricted from contacting clients, colleagues or suppliers.
Garden leave is most commonly used for employees with access to sensitive information, such as pricing data, strategic plans, technical know-how or key customer relationships.
It may be imposed by the employer, where permitted by contract or agreed as part of a negotiated exit.
Why employers use garden leave
One of the main advantages of garden leave is the control that it provides to employers.
The employee remains bound by their contractual duties, including confidentiality and loyalty, while being kept away from the business where they may pose a risk
Key benefits include:
- Protecting confidential and commercially sensitive information
- Preventing client or staff poaching
- Allowing a successor time to establish relationships
- Keeping the employee out of the competitive market
- Ensuring availability for handover queries
- Reducing reliance on post-termination restrictions alone
Courts have historically shown greater flexibility in enforcing garden leave than restrictive covenants, particularly where it is clearly justified and proportionate.
The downsides employers need to consider
Despite its advantages, garden leave comes with real costs, including bearing the cost of the employee’s full pay and contractual benefits.
For senior or highly paid employees, this can be significant, especially if a replacement is hired before the notice period ends.
One of the key legal risks is if there is no express garden leave clause in the contract, excluding an employee from work may amount to a breach of contract, particularly where:
- Commission or bonuses depend on active work
- The employee needs to work to maintain professional skills
- Exclusion damages future career prospects
In such cases, the employee may claim constructive dismissal, potentially stripping the employer of the protection they were seeking and undermining restrictive covenants.
What happens during garden leave?
During garden leave, the employment contract continues in full and the employee must comply with confidentiality and good faith obligations. They are also usually prohibited from working elsewhere
The employer may still request assistance, information or attendance if reasonably required, but employees should also notify the employer of holidays or travel plans during this period.
Importantly, unless expressly agreed, the employee cannot begin work with a new employer while still on garden leave.
How long should garden leave last?
In most cases, garden leave aligns with the contractual notice period. For senior employees, this may be several months.
In practice, courts are unlikely to enforce excessively long periods. While notice periods of twelve months are not uncommon, garden leave longer than six months may be difficult to justify unless clearly necessary to protect legitimate business interests.
The guiding principle is proportionality. The restraint should last no longer than is reasonably required.
Garden leave and restrictive covenants
Garden leave often works alongside restrictive covenants, such as non-compete or non-solicitation clauses.
Employers sometimes reduce the length of post-termination restrictions to reflect time already spent on garden leave.
While not legally required, courts may consider this when assessing reasonableness. The combined restraint must still go no further than necessary to protect legitimate business interests.
What if an employee refuses garden leave?
If an employee attempts to resign without notice to avoid garden leave, the employer can refuse to accept the resignation and place them on garden leave instead.
If the employee breaches the restriction, the employer may seek an injunction. The court will weigh:
- The employer’s legitimate business interests
- The risk of harm
- The impact on the employee
Any restraint imposed by the court will usually be limited to the minimum period required, not the maximum set out in the contract.
Need help with garden leave?
Garden leave can be an effective way to protect a business at a sensitive time, but it is not a one-size-fits-all solution.
If you are considering using garden leave or reviewing your employment contracts, early legal advice can help ensure the approach is proportionate, enforceable and aligned with your business objectives.
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