Gardening leave does not come without costs and risks. In this article Emma Roberts examines the pros and cons you may wish to weigh up before granting gardening leave to an employee.

What is gardening leave?

The meaning of gardening leave is that you require the employee to be away from the workplace during their notice period.

Gardening leave can be applied when someone resigns from their post or is dismissed with notice.

Moreover, during gardening leave, the employer is under no obligation to provide work or assign any duties to the employee for the whole or part of the employee’s notice period.

Placing an employee on gardening leave often involves asking the employee:

• Not to perform any service for the company;

• Not to attend the premises;

• Not to use company equipment; and

• To refrain from contacting customers, suppliers and other employees.

Despite this, they still remain an employee and, as such, they will continue to receive salary and contractual benefits in the usual way. They will be bound by the express and implied terms of their contract of employment. 

For an employee on gardening leave, this typically means that they will not be allowed to work for another employer, act in a self-employed capacity or do anything that is contrary to the employer’s business interests. They must be available for the employer, for example, if a manager has some queries or needs help with the handover.

Advantages of gardening leave for an employer

The key advantages of garden leave are that an employee can be prevented from:

• working for a competitor during the notice period; and

• soliciting clients and employees for themselves or for a competitor.

Employees are still employed by the employer during the notice period and therefore must:

• continue to abide by the terms of their employment contract; and

• not work for a competitor, or setup a business in competition with their employer, in breach of their duty of fidelity to avoid conflict of interests.

An employee is required during the notice period to comply with the employer’s reasonable and lawful instructions, including complying with the employer’s directions not to:

• attend the workplace;

• access and use the employer’s confidential information and intellectual property; and

• communicate with clients, customers, suppliers or employees.

Disadvantages of gardening leave for an employer

The main disadvantage of garden leave is that an employee is required to stay away from the workplace but remains on full pay and entitlements during the garden leave period.

If the employer fails to pay the employee their salary or contractual entitlements, an Employment Tribunal may find that the employer has constructively dismissed the employee or repudiated the employment contract, allowing the employee to work for a competitor during the notice period. 

In addition, if you do not have a clear and well-drafted gardening leave clause in the employee’s contract of employment and you decide to place them on gardening leave, and it has not been agreed to by the employee in writing, you expose yourself to the risk of claims of breach of contract.

This could entitle the employee to argue that it amounts to a fundamental breach of the contract. They could then resign and claim constructive dismissal.

It could also mean you lose your rights to enforce post-termination restrictive covenants.

If the employee has a notice period which exceeds six months, the employer may not be permitted to enforce gardening leave for the full period. This is because it’s likely a court would determine that this is longer than necessary to protect the employer’s business interests.

Moving Forward

There are advantages and disadvantages for employers using garden leave mechanisms to protect their business interests against outgoing employees. Employers should consider whether the benefits of directing an employee to take gardening leave outweigh the costs associated with it.

To protect their business interests, employers should:

• ensure their employment contracts contain express gardening leave provisions entitling them to direct an employee to take gardening leave during the notice period;

• maintain the employee’s salary and contractual entitlements during the gardening leave period; and

• use gardening leave provisions in combination with post-employment restraint of trade provisions.

If you need help and advice regarding gardening leave, please do not hesitate to contact me on 0113 350 4030 or at emma.roberts@scesolicitors.co.uk.

If you have enjoyed this article and would like to be kept updated on HR and Employment Law issues please subscribe to our monthly newsletter.

SCE Solicitors is a boutique employment law and litigation practice based in Leeds which advises clients nationwide. Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.