Garden Leave: Your Rights During Notice

Garden leave is a period during an employee's notice period where the employer pays the employee their full salary and benefits but requires them to stay at home rather than attend work. The name comes from the idea of the employee "tending their garden" during this period.

• ✓Garden leave is not a punishment, it is a paid period of your contractual notice
• ✓You must be paid your full salary and contractual benefits throughout garden leave
• ✓You remain an employee with all associated rights until the notice period ends
• ✓Garden leave clauses must be included in your employment contract to be enforceable, your employer cannot place you on garden leave without a contractual basis
• ✓It is most commonly used with senior employees, salespeople, or those with access to confidential client information or trade secrets

During garden leave, you remain employed and continue to accrue all your usual entitlements:

• ✓Full salary, must be paid at your normal contractual rate throughout the garden leave period
• ✓All contractual benefits, company car, private health insurance, pension contributions, bonuses (if contractually payable)
• ✓Statutory and contractual holiday, continues to accrue throughout garden leave
• ✓Company car or car allowance, continues unless your contract provides for its removal
• ✓Share options and LTIPs, complex, depends on scheme rules and your contract. Get specialist advice
• ✓Your garden leave counts toward your qualifying period for employment rights (including statutory redundancy pay)

This is the most common question about garden leave, and the answer depends on your contract:

• ✓If your contract has a garden leave clause, it usually prohibits you from working for a competitor or starting new employment during the garden leave period
• ✓Breaching a garden leave clause can result in your employer seeking an injunction to prevent you starting the new job
• ✓However, garden leave clauses must be reasonable, an excessively long period may be unenforceable
• ✓If your contract does NOT have a garden leave clause, your employer cannot legally prevent you from starting another job, though they may try
• ✓Post-termination restrictive covenants (non-compete, non-solicitation) are separate from garden leave clauses and continue after employment ends
• ✓The time spent on garden leave is often credited against post-termination restrictions, check your contract

Many employment contracts include post-termination restrictions (PTRs) that apply after employment ends. Common types:

• ✓Non-compete: prohibits you from working for a competitor for a set period after leaving
• ✓Non-solicitation of clients: prohibits you from approaching former clients of your employer
• ✓Non-solicitation of employees: prohibits you from poaching colleagues to join a new employer
• ✓Non-dealing: prohibits you from doing business with former clients even if they approach you
• ✓Confidentiality: prohibits use of trade secrets and confidential information (unlimited duration)

Whether a PTR is enforceable depends on:

• ✓Whether it protects a legitimate business interest (client relationships, confidential information, trade secrets, staff stability)
• ✓Whether it goes no further than reasonably necessary to protect that interest
• ✓The duration, geographical scope, and scope of activity must all be proportionate
• ✓Courts will not enforce a PTR that is simply designed to prevent competition, it must protect a genuine interest

Garden leave and PILON (payment in lieu of notice) are different:

Interestingly, employees do not have a general right to insist on being placed on garden leave, unless the right to work during the notice period is implied (e.g. for commission-based workers, those who need to maintain professional skills, or those who need to maintain professional relationships):

• ✓Most employees can be required to work during their notice period if their contract says so
• ✓Senior employees, professionals, and commission-based employees may have an implied right to work
• ✓If an employee requires continuous skill development to maintain their professional standing, they may have a right to work during notice
• ✓An employee cannot usually insist on garden leave rather than working their notice, unless the contract specifically provides for it