How To Put an Employee on Garden Leave

Garden leave is used as a protective measure by businesses. It can prevent the risk of confidential information being passed on to a competitor when an employee leaves the business, helping to ensure the continued success of the organisation.

Below, we explain exactly what garden leave involves, when it should be used by a business, and how to put a leaving employee on garden leave.

If you need help with recruitment services or employment law for your business, Vero HR provides expert HR services tailored to your needs.

What is garden leave?

Garden leave, sometimes also known as gardening leave, is when a leaving employee is asked not to attend the workplace or perform any of their duties during their notice period. It can be used for an employee who has resigned, been made redundant, or been dismissed.

The employee will still be contractually employed by the organisation. This means the employer will be obliged to provide the usual salary as well as any benefits during this period. However, the employee will be asked not to do any of their work or communicate with any colleagues or clients, either from home or the place of work. They may, however, be required to provide information or assistance to the employer during the period.

How do you put a leaving employee on garden leave?

If you want the option to put employees on garden leave, a clause must be included in their employee contract. Otherwise, you may not be able to retain the employee whilst also preventing them from attending work.

If your employee has signed a contract that includes a garden leave clause, you will be able to place them on garden leave once they have handed in their notice, or if they have been dismissed with a notice period, or if they have been made redundant.

You will have to put the formal garden leave arrangement in writing to the employee, and you should ensure any wording matches the clause in the employee contract. The correspondence should set out what will be expected of the employee, including:

• The employee will not be required to work (unless formally requested by the employer)
• The employee should not contact colleagues, clients, or suppliers (unless permission is given by the employer)
• The employee should be available during usual working hours in case their support is needed with work matters
• The employee will continue to receive their salary and benefits up to the final day of employment
• The employee should not take up employment with any other organisation
• The employee should continue to adhere to any confidentiality regulations set out in the employee contract
• Any leftover leave days which should be used during the garden leave period

In what situations should you put a leaving employee on garden leave?

Garden leave is commonly used to prevent data leaks. It is often used for senior roles who may have access to more confidential or sensitive information – asking them not to work during their garden leave period removes their access to this sort of information. This means there is less risk of it being misused.

It can also be used to reduce the risk of employees ‘poaching’ clients or suppliers to take with them to their next role. Garden leave can bring a business peace of mind if an employee who has access to a number of important clients will be moving on to work with a competitor.

It’s important to bear in mind the cost of putting an employee on garden leave, especially those in a senior role. The business should weigh up the benefits of avoiding a data leak against the cost of paying an employee who will not be working during the garden leave period.

When it comes to managing employee issues like putting employees on garden leave, having an HR department is crucial. HR professionals are equipped with the skills and knowledge necessary to handle employee-related matters effectively and efficiently. By relying on HR to manage employee issues, businesses can ensure that all procedures are carried out in accordance with legal requirements and best practices. This can help prevent potential legal issues and disputes that could harm both employees and the business.

Additionally, HR can offer guidance and support to employees during difficult situations, creating a positive workplace culture that prioritises employee well-being. Ultimately, the importance of HR in managing employee issues cannot be overstated, and businesses that prioritise HR are more likely to succeed in the long run.

Legal rights without a contract clause

You can’t simply place an employee on garden leave without proper contractual backing. Without an express garden leave clause, asking an employee not to work during their notice period could amount to a breach of contract. Employees have an implied right to work, especially where their role requires up-to-date skills or their income depends on commission or bonuses.

If you want to use garden leave but don’t have it written into your contracts, you’ll need the employee’s agreement to proceed. Without it, you risk claims such as constructive dismissal. That’s why it’s crucial to have the right clauses in place from day one. If you’re unsure whether your contracts are properly drafted, our employment law experts at Vero HR can help.

Duration and reasonableness of garden leave

Just because your contract allows for a lengthy garden leave period doesn’t mean it will be fully enforceable. Courts will typically only enforce garden leave to the extent needed to protect your legitimate business interests. The key question is always: what’s reasonable?

If a garden leave period seems excessive or disproportionate, there’s a good chance it won’t be fully enforced. Building proportionate periods into your contracts, usually mirroring the notice period, helps ensure your clauses will hold up if challenged.

Employee refusal and enforcement

If an employee refuses to comply with garden leave or breaches its terms by working for a competitor or contacting clients, you may be able to seek an injunction. However, any enforcement action is subject to scrutiny, and courts will weigh your business interests against the impact on the individual. In some cases, courts have shortened garden leave periods below what contracts specify.

Having a well-drafted clause and documented rationale for using garden leave will put you in a stronger position. If issues arise, our employment law specialists at Vero HR can provide guidance.

Employee rights during garden leave

Employees on garden leave aren’t on holiday; they’re still employed with all the rights and responsibilities that entails. They remain bound by contractual obligations, including confidentiality and fidelity. They can’t work for anyone else, can’t solicit your clients or employees, and must protect sensitive information.

You must continue paying their full salary and benefits, and employees continue to accrue annual leave. It’s reasonable to ask them to let you know if they’re planning to travel and to remain available during normal working hours for handovers.

Being clear in writing about these expectations helps manage the relationship, reduce misunderstandings and protect your organisation while maintaining a fair exit experience for the employee.

Payment in lieu of notice (PILON) vs garden leave

When an employee hands in their notice, you have two main options: PILON or garden leave. They work very differently, so understanding the distinction is key.

With payment in lieu of notice, employment ends immediately and the contract terminates. You pay the employee for their full notice period in one go, freeing them to start a new role right away, which might not be ideal if you’re concerned about them joining a competitor or taking sensitive information.

Garden leave keeps the employment relationship alive. The employee remains on your payroll, receives their full salary and benefits, but is asked not to work or contact clients, colleagues or suppliers. They remain bound by all contractual obligations, including confidentiality clauses and restrictions on working for competitors.

If you need to protect confidential information or client relationships, garden leave is often the better choice. If cost is a concern or the role isn’t particularly sensitive, PILON might make more sense.

Need more guidance?

While garden leave can be an effective measure to protect a business from data leaks and client poaching, it’s important to remember that employee grievances can still arise. Addressing employee grievances in a timely and fair manner is crucial to maintaining a positive workplace culture and avoiding potential legal issues. If an employee raises a grievance, it’s important to hold a grievance meeting to address their concerns and find a resolution.

If your company needs HR and recruitment support, Vero HR can help. We can provide you with dedicated HR services to effectively manage your workforce and assist with recruitment and employment law. Contact us to find out how we can help your business.