What Is Garden Leave And When Should You Use It

Garden leave is a practice where an employer continues to pay an employee who is leaving the company (either because they’ve handed in their notice or had their employment terminated) but instructs them to stay away from work during their notice period. During this time, the employee is typically forbidden from contacting fellow employees, clients, or suppliers, and is denied access to company documents or emails.

Purpose of Garden Leave

Garden leave is commonly used when an employer wants to:

• Immediately Halt Duties: Prevent the employee from performing their regular duties or impacting the company’s operations.
• Restrict Access: Keep the employee away from competitors for the duration of the notice period.
• Protect Goodwill: Allow the employee’s successor time to establish themselves and maintain relationships with clients, ensuring the company’s goodwill is preserved.

When Can Garden Leave Be Used?

1. Contractual Clauses: Check if there is an express garden leave clause in the employee’s contract. This clause should specify that their duties can be varied or withdrawn during the notice period. Without such a clause, placing an employee on garden leave may lead to disputes.

2. Contractual Right to Work: If no express garden leave clause exists, the employee might argue that they have a right to work during the notice period. Case law has evolved, and there may be contractual rights to work, especially for roles where ongoing skill development or public presence is crucial (e.g., artists, skilled tradespeople, chartered accountants).

What Happens If an Employee Breaches Garden Leave?

1. Enforcement: Garden leave clauses are typically enforced through injunctions. However, courts may be reluctant to grant an injunction if damages would adequately compensate the employer for the breach.

2. Legitimate Interests: An injunction is likely only if necessary to protect the employer’s legitimate interests, such as preventing the employee from working for a competitor or potentially damaging the employer's business.

3. Duration of Garden Leave: The longer the garden leave period, the less likely a court is to enforce it fully. Recent cases show that courts have only rarely ordered injunctions for 12 months.

Key Advice

• Express Clauses: Ensure that employment contracts include an express right to impose garden leave. An implied right to work can be easily contested and overridden.

• Risk Assessment: Weigh the risk of allowing the employee to continue working during their notice period against the potential damage of enforcing garden leave and the associated litigation risks.