Garden leave is a confusing concept. It’s an old-fashioned Britishism that has been historically used in the military, sports, and other industries. Garden leave is like getting fired but retaining employees’ benefits and salary. Essentially, it means to be placed on leave in a way that prevents employees from taking any significant actions (or doing anything else, for that matter) that might be harmful or detrimental to my company’s reputation. But the employee is given full salary.
Let’s get into the details of Garden leave.
What is Garden Leave?
It’s unusual to still be paid while you’re sitting at home, right? When an employee quits, the employer asks them not to return to work because they want to avoid paying them their notice if they don’t have to. This is known as garden leave.
A gardening leave clause is a contract of employment between an employee and an employer. It allows an employee to be paid but not required to attend work. This means that their work responsibilities are frozen while they are away from the workplace and can include access to their office and communication systems. The purpose of this type of leave is to protect the interests of both parties involved in certain situations, such as when an employee is suspected of fraud or misconduct.
This can be used as a way of allowing an employee to leave with dignity while also allowing the company time to find a suitable replacement. It can also be used as a disciplinary measure if employees have broken any rules or policies at their workplace.
Why is it Called Garden Leave?
Garden leave is simply called that because when an employee is terminated, they are still able to focus on hobbies like gardening, if not able to work for a company. It is called administrative leave in the US, which is different from garden leave in the UK. Whatever you may choose, it’s simply a means to stop an employee from coming to work, working for the organization, or looking for a job elsewhere. Since employees cannot work for either their old or a new employee, they can only garden, hence the name.
When Should Garden Leave be Used?
When an employee’s contract of employment ends and is required to serve a notice period, garden leave can be used at that time.
Placing employees on this leave keeps them away from the company, clients, or coworkers as long as they serve the notice period.
Employers should be mindful of the duration of this leave, which should not exceed what is necessary. This is not only due to preventing costs but also to protect employees’ legitimate business interests. In most cases, the duration of garden leave depends on the contractual notice period. This can be as much as 12 months for some employees but is typically not longer than 6 months.
Can You Always Put An Employee On Garden Leave?
Put shortly, you can’t. Unless there’s an agreement beforehand in the form of a contract, you can’t always put an employee on garden leave.
According to RocketLawyer, Without an advance agreement, putting an employee on this type of leave is technically a breach of contract and they may be able to treat themselves as dismissed and immediately released from their employment, free to take up a new job.”
Therefore it is wise to have an agreement or a contract signed by the employee when they join the company.
What are Some Reasons for Initiating Gardening Leave?
Prevent Confidentiality
Garden leave can be used to protect trade secrets and prevent employees from using confidential information against their employer. It also gives companies time to find a replacement before an employee leaves so they can continue working without interruption.
For Personal Reasons
If you’re an employer and don’t want to let go of an employee, but the employee has resigned or been dismissed, you can put them on garden leave. This means that the employee can’t come to work during their notice period, and they can’t start a new job during this period either.
Misbehavior
Suppose an employee has a history of causing trouble or misbehaving or was asked to leave, but the company decided to pay garden leave rather than formally dismissing them. In that case, having them out of the company sounds like a good idea.
If you have had multiple issues with one employee or have fired someone for serious misconduct, having them around can be bad for team dynamics and productivity.
Who Is Typically Given Garden Leave?
Garden leave is a clause that allows employers to keep employees away from the office during their notice period. It’s often used for senior employees or those with access to sensitive business information.
You might use a gardening leave clause when you have employees in C-level executive positions (e.g., CEO, CIO, CHRO, CMO, CFO, etc.) and sales positions.
What Are An Employee’s Rights During Garden Leave?
Choosing to Return
The first is that they can choose to return to work at the end of their leave period. This means that they must give notice to the employer that they are returning, and the employer has a right to refuse them. However, if the employer does not accept their return, the employee may be legally entitled to compensation for being dismissed without good cause.
Receiving Full Salary
Employees’ next right during garden leave is to receive their full salary until the end of their notice period if they were previously employed with that company for more than two years. Employees who were in employment with their new employers for less than two years will be paid until the end of their notice period or 12 weeks’ pay (whichever one is longer).
Receiving Benefits
Employees should receive their contractual benefits when on garden leave. For example, if a person has a medical insurance policy through their company, they should still be covered while on garden leave.
How Long Does the Garden Leave Last?
It depends on the contract. It is usually for a period of three months, but it can be longer or shorter if the employees have worked for their employer for a long time. Employees cannot be forced to take garden leave, which will be decided by the employer. If they decide that they want an employee back sooner than the end of their notice period, they can do this as long as they give at least one month’s notice in writing (this should explain why).
An exiting employee is required to:
- Work their full notice period
- Exit at any time while they’re serving their notice period
- Leave immediately and be offered Payment in Lieu of Notice (PILON)
- Accept the Garden Leave
Benefits of Garden Leave
Garden leave is a common practice in the UK and can be used to protect employers from the costs of employee churn. It’s also a useful way for employers to protect their intellectual property and client relationships while minimizing disruption to their business.
The main advantage of this leave is that it protects the employer from unfair dismissal claims by an employee, such as when the employee feels they have been dismissed in breach of contract. By putting an exiting employee on garden leave, employers can be sure that if and when they do decide to dismiss them, any claim for unfair dismissal will fail.
Employees on this type of leave are not permitted to use or disclose confidential information about their former employer’s clients, products, processes, or other proprietary information. This can be particularly helpful when an employee is hired by a competitor company, as it helps prevent them from using this information to gain a competitive advantage over their former employer.
Employers can also use garden leave to protect against poaching by competitors or other organizations who might try to poach employees by offering them stock options or other incentives. At the same time, they’re still employed at another company.
Disadvantages of Garden Leave
Here are some cons of the leave:
The main disadvantage of placing an employee on garden leave is the requirement to pay the employee their total remuneration without them coming to work. This can be a high cost for a company, especially when the employee has been with the company for many years and has accumulated many benefits.
The leave protection comes at the cost of continued salary payments and benefit provisions until the notice period is over The former employee must still be treated fairly and with respect during this period, ensuring that they are not disadvantaged in any way.
Legal Advice on Garden Leave
If employers want to ensure everything is in order and legally binding, it is best to seek legal advice. A detailed contract clause, tailored to their business and its unique requirements, is usually a good idea.
However, it is essential for them to not just to rely on their own interpretation of this term but should check if the employer has the right to put them on gardening leave (and whether an employee can be required to work during garden leave).
It also helps to establish if there are any limitations as well as what their pay and other employment benefits should be while they are away from work. Once all this information has been collated, employers can decide what course of action would be best suited for both parties involved in this situation.
To Sum Up
The garden leave is a legal requirement and ensures that an employee dismissed cannot take up employment with a competitor until their contractual notice period has expired. It is not meant to be punitive or discourage workers from finding new jobs. We hope this article cleared your understanding of garden leave.
