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Garden Leave Explained: How It Works and When It's Used

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Garden leave is a term you might encounter when you or someone you know is changing jobs.

Essentially, it's the practice of paying an employee to stay away from work during their notice period, rather than having them come in every day. This time away from the office isn't holiday. The worker is still employed by the company, receiving their normal salary, but they’re not required to actually perform their usual duties or attend the workplace.

For the company, this is often about protecting their business. If you're moving on to a role with a competitor or starting your own business in the same industry, it prevents you from accessing sensitive information or poaching clients or colleagues in your final weeks.

On the flip side, it gives you, the employee, a break from work duties, allowing you to relax or prep for your new role. Hence the name – if you want to do some gardening, go ahead.

Here’s what you need to know about garden leave and why you might get it.

What is garden leave?

Garden leave is a period when you're required to stay away from work, but remain on the payroll. It’s usually given during your notice period after it’s been agreed that you’re leaving.

It’s often given to those in senior roles or industries dealing with sensitive information.

It’s basically used to keep you out of the workplace to avoid drama when there’s some upheaval regarding your employment. So you might be going through redundancy procedures, a misconduct investigation, a change of responsibility, or something else.

How does Payment in Lieu of Notice differ from gardening leave?

Payment in Lieu of Notice (PILON) is when you get a lump sum payment at the end of your employment for the work you would have done during a notice period.

It’s used when you have a notice period in your contract (maybe 1-3 months, depending on your length of service) but refrain from working it.

A PILON agreement is usually made when an employee leaves and the company wants them out ASAP – in cases of redundancy, dismissal, or some other situation that would make it awkward to keep them around.

It’s used for similar reasons as garden leave, then, but the key difference is that PILON is paid immediately when the employee’s contract is terminated and they no longer work for the company. During garden leave, they’d remain as an employee instead, with the (usually unlikely) potential of returning to their position.

So you either get PILON or take garden leave – not both.

Garden leave and redundancy

Gardening leave is often used as part of the redundancy process.

Redundancy occurs when an employer needs to reduce their workforce because a job is no longer needed. If an employee is being made redundant, they’re usually given a notice period before their employment ends. During this notice period, their employer can choose to send them on garden leave.

During the employee’s notice period, they’ll still be employed and on the payroll, but not required to come into work.

I was once put on gardening leave while in the process of being made redundant. For a few weeks, the company entered a ‘consultation period’ to figure out if they could find me a different position. After a few weeks, they concluded that they couldn’t, and I was out.

In hindsight, it was just a formality, and it made sense for the company. Keeping me out of the office meant I couldn’t stir up any trouble by gossiping or making others fear for their jobs. Not that I would, of course. But even if I was in the office, I would have been distracted and unmotivated because of the situation.

Employee perspectives on garden leave

From your perspective as an employee, garden leave means receiving full pay and benefits (including pension contributions, healthcare, etc.) without reporting to work. Sounds alright, doesn’t it?

Remember though, when banishing you from the office, your employer does have to do things by the book and make sure you’re treated fairly. You generally can’t start a new job, and use of certain assets from your current employer, like a company car, will have to stop.

If you work in a commission-based job, like sales for example, you might be missing out on your ability to earn more than your basic salary, which you might feel is unfair. So you might consider getting legal advice if you suspect a breach of your contractual rights.

A typical garden leave clause specifies the conditions under which you can be placed on garden leave. This might include restrictions on your work-related activities during the leave, such as non-compete terms or prohibitions on poaching clients or colleagues (these are known as restrictive covenants).

However, being put on garden leave without contractual clauses like these might be considered a breach of contract. It could even be seen as constructive dismissal – that’s when your employer makes it so uncomfortable for you that it pushes you to resign.

Things to be mindful of:

  • Garden leave isn't exactly the same as redundancy, but it's often used during the redundancy process.
  • Use your time wisely: Make good use of this time off for professional development – or just rest. It’ll do you good.
  • New employment: Understand how this time may affect your ability to start your new job promptly after the leave ends.
  • Disagreements: If a dispute arises regarding your garden leave, you may need to approach an employment tribunal for resolution.
  • Get it in writing: If being placed on gardening leave, ask your employer to provide formal written confirmation. This garden leave letter should outline the terms like duration, pay, obligations, and restrictions that’ll apply during this period. It makes sure you’re all on the same page and protects against potential disputes.

Employer perspectives on garden leave

For employers, garden leave is a strategic tool, ensuring a smooth handover and transition while the outgoing staff member is still formally employed.

This period of time serves as a buffer, during which senior employees are typically restricted from joining a new employer, minimizing the risk of your business interests being compromised. It can be a sensible move to safeguard confidential information and prevent talent poaching by competitors.

Things to remember when arranging garden leave:

  • Make sure everything is outlined in their employment contract.
  • Clearly establish its duration and conditions for communication.
  • Detail what happens with contractual benefits and company property.
  • To prevent chaos with changing responsibilities, you might want the employee to be available for a handover during the period of garden leave. This might include dialing in remotely to essential meetings.

Is garden leave a bad thing for your company?

Garden leave can be a smart move for your business when you're dealing with certain staff transitions. It keeps your departing team members from jumping ship to a competitor or starting their own ventures during the notice period, all while they're still under contract with you. This means they stay loyal to your company's confidentiality and non-compete terms without actually coming into work and causing unrest.

Think of it as a proactive step that shows you value your company's security and stakeholder protection. It can even discourage others from trying to lure away your top talent.

But it's not without potential negative impacts. Garden leave means you're footing the bill for an employee who isn't contributing, and that can add up, especially if you've already filled their position. Plus, if garden leave isn't in your employment contracts, you might face legal headaches.

And don't forget about the vibe it sets in the office. If not handled with care, it can stir up doubts and dampen morale among your crew. Maintaining a positive company culture is all about balance and clear communication. Your team needs to feel part of a healthy, secure work environment – if their colleagues are randomly going missing with no explanation, they’re not going to feel safe in their own roles.

Our take on garden leave

For some employees, gardening leave might seem like an unnecessary or even punitive measure. It’s primarily intended to protect the employer's business interests when someone leaves. The paid absence ensures a drama-free transition period before the employee can commence their new role.

But for many, it’s a nice opportunity to rest, reflect, and get ready for whatever comes next in their career. While losing a job ca be stressful, this enforced break from work can be a blessing in disguise.

Garden leave can be a strategic tool for businesses, but it's got to be used wisely. In the UK, gardening leave employee rights are upheld through employment law protections. So employers have to be aware of the rules and follow proper procedures.

If you’re making the decisions, consider both the financial implications and the cultural ripple effects to make sure it works in favor of your company's big picture.

In conclusion, IceHrm provides a comprehensive solution for efficient leave management, ensuring businesses thrive with streamlined processes, increased productivity, and enhanced employee satisfaction.

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