Understanding garden leave: A guide for UK employers

If you run a business in the UK, there’s a good chance you've come across the term "garden leave" or “gardening leave.” But what exactly does it mean, and how can it benefit your business?

This peculiar term causes quite a lot of confusion in the business world. It throws up images of employees taking time off to tend to their lawns.

Naturally, that’s not the case. So, let's break it down in straightforward terms, so you can decide whether garden leave is a tool you should consider using.

If you need immediate assistance on this matter you, can use our employment law advice line, where our expert advisor are available 24/7.

What is garden leave?

Garden leave is a period during which an employee, who is leaving your company, is still under contract but is not required to work. They’re effectively kept out of the workplace while still receiving their usual pay and benefits.

The term "garden leave" comes from the idea that the employee is, metaphorically, sent home to tend to their garden instead of coming to work.

When should you consider garden leave?

You might use garden leave for various reasons, but it’s particularly useful when you’re concerned about an employee moving to a competitor.

By placing them on garden leave, you prevent them from immediately taking sensitive information, trade secrets, or client relationships to a new employer.

Garden leave is also an effective way to keep departing employees from influencing other staff, poaching clients, or causing disruption in their final days. It provides a cooling-off period, allowing the transition to happen smoothly without the potential for last minute sabotage.

What are the legal considerations for garden leave?

When implementing garden leave, there are some legal factors you need to be aware of:

Contractual rights

You can only place an employee on garden leave if their contract explicitly allows it. Without a garden leave clause, the employee might argue that you’re preventing them from working, which could be deemed a breach of contract.

Duration

The duration of garden leave can range from weeks to months, but typically aligns with the employee’s notice period. For example, if your employee has a contractual notice period of 6 months, you could put them on garden leave for 6 months.

Pay and benefits

During garden leave, the employee remains on your payroll and continues to receive all contractual benefits. This includes salary, pension contributions, and other perks. They are also still bound by their contractual obligations, such as confidentiality agreements.

Enforcement

 If an employee breaches their garden leave terms, for instance by starting work with a competitor prematurely, you may have grounds for legal action. This might involve seeking an injunction to enforce the garden leave or pursuing a claim for damages.

Pros and cons of garden leave

Like with all things in life, there are pros and cons to placing an employee on garden leave, let’s go through them:

The pros of garden leave

• Limits the risk of sensitive information being passed to competitors

• Reduces the chance of disruption or interference from departing employees

• Allows you to redistribute responsibilities and secure client relationships before a competitor poaches your talent

The cons of garden leave

• You’re paying an employee who isn’t working, which might strain budgets

• Other employees might feel uneasy if they see colleagues suddenly put on leave

• If not handled correctly, garden leave can lead to disputes

Best practices for implementing garden leave

If you decide to use garden leave, consider these best practices:

• Make sure your contracts are clear and include a garden leave clause in employment contracts.

• Communicate transparently when placing an employee on garden leave, be clear about what it entails.

• Seek legal advice, given the potential legal implications, it’s wise to consult with an employment law specialist before enforcing garden leave.

Get help with Garden Leave from BrightHR

Garden leave can be a powerful tool for protecting your business interests, but it needs to be used correctly. By understanding its purpose, benefits, and legal considerations, you can decide whether garden leave is right for your business.

When implemented properly, it ensures that your business is safeguarded during periods of transition, allowing you to move forward with confidence.

For expert support with this matter or any employment-related concerns, our 24/7 HR and employment law advice service is at your disposal. Plus, if you need help implementing a garden leave clause, our comprehensive HR document library is stocked with templates and guides for all policies, procedures, and contracts.

Don't hesitate to take advantage of our resources, book a free demo, to ensure your peace of mind.