What is garden leave and when can it be used? Do you have to pay the employee full pay throughout?

When an employee leaves a company, usually they'll work their notice period. However, if they choose not to, you may send them on garden leave.

As an employer, you must handle this process correctly. Failure to do so is a breach of contract, which could lead to an employment tribunal.

In this guide, we'll discuss what garden leave is, employee rights whilst on garden leave, and the benefits it can bring.

What is garden leave?

Garden leave is a workplace practice where an employee leaves a job, having resigned, been dismissed, or told to stay away from work.

This transition period is used during someone's notice period. Generally, in these cases, the employer wants to keep them away from the business.

Garden leave is seen to offer more protection than post-termination restrictive covenants. It is one of the many tools employers have available to protect their business.

Where does the term gardening leave come from?

The term gardening leave comes from the fact that during this period, employees can spend time pursuing hobbies.

As an employer, you must understand how long garden leave typically is.

How long is garden leave?

Generally speaking, garden leave lasts up to six months. However, this period of time can be anything from one week to twelve weeks.

During the period, the employee on garden leave is banned from contacting clients, suppliers, or fellow employees.

Do you have to pay employees during garden leave?

During garden leave, an employee remains on the payroll and is paid their normal salary.

Here, you have a legal requirement to ensure you fulfill your contractual obligations. Failure to do so could lead to a breach of contract which is against employment law.

What are employee rights during garden leave?

As well as receiving the same pay, employees on garden leave must also receive their usual statutory and contractual benefits. For example:

• An employee's remuneration package (like a company car).
• Statutory sick leave.
• Maternity leave and pay.
• Parental leave and pay.
• Protection against discrimination.

Now you understand what your employees must receive whilst they're on garden leave, you need to know who you'd typically send on this form of leave.

Who would you place on garden leave?

Typically, senior employees or company directors who have greater access to company details are placed on gardening leave.

Senior employees tend to know sensitive business information. So, garden leave ensures sensitive information about the business is protected at all costs.

Why would a company place an employee on gardening leave?

An employee on gardening leave is legally bound by all contractual clauses, such as the duty of confidentiality.

The following benefits come with placing someone on this form of leave:

• Protects sensitive company data, especially if they're joining a competitor.
• Protects company information regarding sales of their current employer.

Ensure the ongoing success of the company and minimal impact on other employees during the period up until they leave.

What is a gardening leave clause?

A garden leave clause is in place for when an employee chooses to leave their current role and work for a new employer.

This clause is another way to protect your business interests and confidential information.

Before including a clause in an employment contract, it's advisable to seek legal advice to ensure you're sticking within employment law.

Would you include a garden leave clause in an employment contract?

You must always include a contractual provision for gardening leave within your employee's contract.

Including a clause in an employment contract allows you to send an employee on gardening leave legally.

Ensure your gardening leave clause is clear, concise and included in the contract of employment. This avoids a fundamental breach of contract claim being made against you.

Is garden leave used instead of a notice period?

An employee is sent on garden leave during their notice period when you choose not to have them in work, or they choose not to work their notice.

If the employee has a notice period longer than six months, you may not be permitted to send them on garden leave.

This is because if a claim is made against you, a court may find that period is longer than required to protect the employer's business interests.

It's important you understand the employee rights whilst on gardening leave. You have a duty to act lawfully during this process.

What are the benefits of garden leave?

As an employer, you must understand the benefits of garden leave before you decide to send someone on this form of leave.

The following are benefits:

• The company is protected from poaching when the employee leaves.
• The employee leaving is on hand to help the employee's successor with any handovers.
• The employee leaving is protected from information regarding clients, or any other sensitive company data.
• The employee leaving is protected from working in a self-employed capacity until the notice period comes to an end.
• The employee is bound to contractual clauses, such as confidentiality.

As well as the positives, it's important to consider the negatives that garden leave can bring.

What are the negatives of garden leave?

The following are negatives that you need to consider before sending someone on garden leave:

• Keeping an employee on garden leave comes with extra cost for the business.
• Failure to apply a contractual right for garden leave can lead you open to a breach of contract claim.
• A gardening leave clause doesn't always ensure things will run smoothly. The period of leave can be frustrating for the employee as they want to move on with their new job.
• If an employee is on garden leave for too long, they may be forced to resign which could lead to a constructive dismissal claim being made.

Get expert advice on garden leave with Peninsula

As a business owner, employees resign from their jobs from time to time. When this happens, you may want to place them on garden leave.

Garden leave is seen as a way to protect the employer's business interests. However, if the employee agrees to go on this form of leave, you need to fully understand what that entails. Failure to handle this process correctly can lead to a breach of contract and an employment tribunal claim.

Peninsula offers professional advice and guidance on garden leave. Our HR team offers 24/7 HR employment advice which is available 365 days a year. We also provide advice through multi-lingual support and fully trained counselors who are ready to help.

Want to find out more? Book a free chat with one of our HR consultants. For further information, call 0800 029 4395.