Garden Leave Rules
Garden leave is a period during the notice period where the employee remains employed and paid but is not required to work or attend the workplace. It requires a contractual clause to be enforceable. Time spent on garden leave can reduce the effective post-termination restriction period.
Last updated: February 2025
What the Law Says
There is no statutory framework for garden leave; it is governed by contract and common law. Without an express contractual right, placing an employee on garden leave may breach the implied right to work (William Hill v Tucker 1998). During garden leave, the employee remains bound by all contractual duties including confidentiality and fidelity. Courts view garden leave as a relevant factor when assessing the reasonableness of post-termination restrictions.
Your Obligations as an Employer
- Include an express garden leave clause in the contract
- Continue to pay full salary and benefits during garden leave
- Honour the employee's right to work unless the contract permits garden leave
- Consider the interaction between garden leave and post-termination restrictive covenants
What to Include in Contracts
Include an express garden leave clause permitting the employer to require the employee not to attend work during the notice period while maintaining full pay and benefits. Link it to restrictive covenants by specifying that garden leave counts towards or reduces the post-termination restriction period.
View related contract templateCommon Mistakes
- Placing an employee on garden leave without a contractual right to do so
- Not paying full contractual benefits during garden leave
- Imposing both full garden leave and full post-termination restrictions (courts may consider this excessive)
FAQ
Can an employee work for someone else during garden leave?
No. During garden leave the employee remains employed and bound by their contractual duties, including the implied duty of fidelity. Working for a competitor during garden leave would be a breach of contract and could result in injunctive relief and damages.
Does garden leave reduce the post-termination restriction period?
Courts often take garden leave into account when assessing the overall reasonableness of restraints. Many well-drafted contracts expressly state that the post-termination restriction is reduced by any period of garden leave served, to improve enforceability.
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Get Started FreeThis is guidance for UK employers, not legal advice. For complex employment law matters, consult a qualified employment solicitor or ACAS.
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