Garden leave: all your questions answered
It’s not unusual for employers in the UK to include garden leave in their employment contracts. But if you’re still weighing up its relative advantages and disadvantages, it can be difficult to decide whether it’s worth it or not.
This is especially the case if you’re not quite sure about employee rights during garden leave and how much of a financial cost it will be to your business. In this guide to gardening leave, we’ll answer all your questions, from the meaning of garden leave to its various pros and cons.
What is garden leave?
Garden leave (also referred to as ‘gardening leave’) refers to an enforced interim period of leave between an employee receiving a notice of termination or resigning and starting a new job.
During garden leave, the employee is kept on the payroll and should enjoy the same pay and contractual benefits as under full employment. However, they are typically asked to stay away from the workplace, refrain from contacting employees and clients, as well as from commencing employment elsewhere or starting their own business.
The terms of garden leave should be properly outlined in your employment contract and must be agreed to by your employee to avoid liability. We discuss contracts and garden leave later on in this article.
Advantages of garden leave
Garden leave is common practice for a reason. Here are some of the main benefits of including garden leave in your employment contract:
- Smoother transition period
Including garden leave in your employment contract can make for smoother transition periods. Although an employee on garden leave isn’t present in the workplace, they will still be able to assist with handover queries and potentially support their replacement.
- Mitigates against sabotage
An important advantage of garden leave, and often the main motivation for including it in employment contracts, is that it’s an important buffer against sabotage. This means that exiting employees will be unable to poach clients or use internal information to sabotage your business in some way at their next job.
- Protects sensitive or proprietary information
In the same vein, implementing a mandatory period of garden leave ensures that exiting workers cannot share, leverage or even abuse sensitive information that they may have gained from their time working with you. This is because during garden leave, your employee is still expected to uphold confidentiality terms included in your employment contract.
- Maintains competitive edge
Fundamentally, garden leave is important for helping you to maintain your competitive edge. Since exiting employees on garden leave are kept out of the job market for a set amount of time, this means that any advantageous market information they might have will likely be irrelevant by the time they start at their new job.
- Preserves positive workplace culture
The ability to place an employee on garden leave also means that you can ensure that your workplace remains a productive and positive space. It’s possible that some employees may lack motivation or indeed negatively influence other employees during the period between their termination or resignation and their actual exit.
Disadvantages of garden leave
Although garden leave certainly has its advantages, it’s important to be aware of its drawbacks too:
- Financial burden
Given that during garden leave an employee is entitled to full pay, this can represent a substantial financial strain on your business. This is especially the case when you consider that any employees on garden leave aren’t actually working or contributing to your business. Plus, if you hire a replacement during their garden leave, you will effectively be paying two salaries for one role.
- Contractual obligations
In addition to full pay, any employees on garden leave also receive full employment rights and contractual benefits.
- Employee & employer rights during garden leave UK
During garden leave, employee rights look exactly the same as normal. That is to say that they enjoy full employee rights and compensation. In addition, they continue to accrue their annual leave entitlement during this time.
As their employer, you are legally able to stop them from coming to work, and ask them to hand over business property such as laptops. You are also able to stop them from communicating with employees, customers or clients, and competitive businesses during their garden leave. You can also ask them to take their remaining leave entitlement during garden leave.
However, be aware that these rights are only available to you if correctly stipulated in your employment contract.
Garden Leave & Employment Contracts
If you want to create the ability to place an employee on garden leave, it’s absolutely essential to include it in your employment contract. If not, you will be unable to enforce garden leave.
It’s advisable to tailor the garden leave duration and terms to the position in question, balancing business interests whilst still supporting your employee in moving on from your company.
Here is a brief guide about what to include in your employment contract in relation to gardening leave:
The duration of the gardening leave
What employees are expected to do and not do during garden leave (such as coming into work, using company equipment, contacting customers or clients)
That during garden leave, the employee is not allowed to work for a competitor or become self-employed
Clarify that employees on garden leave are still subject to contractual obligations such as confidentiality
Explain that employees on garden leave will be entitled to full pay and other contractual benefits
Garden Leave & Restrictive Covenants
You can include restrictive covenants in your employment contract that stipulate that an employee cannot work for a competitor or have contact with customers for a set period of time after leaving the company.
Garden Leave & Breach of Contract
It’s important to understand that if you don’t properly provide for garden leave in your employment contract, then enforcing garden leave could represent a breach of contract and therefore legal liability.
In the same way, if an employee breaches the terms of their garden leave, you can in fact seek an injunction.
Managing garden leave with Zelt
Managing employees on garden leave is simple with platforms such as Zelt. Since workers on garden leave remain on the payroll, all you need to do is mark relevant workers as being on garden leave. From there, you can track who is on garden leave, how long is left until their employment officially leaves, and more.
Your employees on garden leave will also retain the ability to track their own payroll and look at payslips directly in the Zelt platform. So even if they’re not at work, they can keep on top of their salary payments.
Even though some paid time off work may seem like an ideal situation for many employees, understanding exactly how garden leave works is essential. Here are the answers to some of the most common questions:
Can you start a new job whilst on garden leave?
It is not possible to start a new job whilst on garden leave. Indeed, doing so would constitute a breach of contract which will give your previous employer grounds to take legal action against you. However, it is possible to apply for new jobs whilst on garden leave.
Is it garden leave or gardening leave?
You can refer to it as garden or gardening leave. Both are used interchangeably.
Can I go on holiday during garden leave?
This depends on the terms in your employment contract. You most probably can take holiday during garden leave and your employer may ask you to take your accrued holiday entitlement during this time. However, be wary that you may be called upon by your employer at any time during garden leave to provide support, so travelling may result in you being able to fulfill your contractual obligations.
Is garden leave paid?
Yes, you receive your full salary and any other contractual benefits during garden leave.
Can I request garden leave?
It is possible to request garden leave from your employer when you resign or are terminated from your position. Your request is more likely to be granted if provision is already made for garden leave in your employment contract.
Why is it called ‘garden leave’?
There are various theories as to why we call it ‘garden leave’. The most popular theory is that since employees on garden leave are unable to work, they wind up taking up hobbies such as gardening. The term supposedly has its origins in the British civil service, and gained popular usage after being used in an episode of Yes, Prime Minister.