Garden leave

What is garden leave?

Garden leave (also known as gardening leave) is a period during which an employee who has resigned or been terminated is instructed to stay away from work while remaining on the payroll.

During garden leave, the employee continues to receive full pay and benefits but is typically prohibited from performing their usual duties, accessing company systems, or starting a new role with another employer.

Garden leave is often used in employment contracts, particularly for senior employees or those with access to sensitive information. Its primary purpose is to protect the employer’s business interests by limiting the departing employee’s ability to influence colleagues, access confidential data, or move immediately to a competitor.

The length and enforceability of garden leave can vary by country. For example, in the UK and many Commonwealth jurisdictions, it is a common contractual tool. In other countries, such as the United States, garden leave is less common and may be subject to different legal scrutiny, especially where non-compete clauses or “at-will” employment are more typical.

Why does this matter for employers?

Garden leave can be a strategic tool for employers during employee offboarding, especially in competitive industries or high-level roles. It provides a buffer period that allows for knowledge transfer, safeguards intellectual property, and reduces the risk of poaching clients or coworkers.

However, employers must ensure that the right to place an employee on garden leave is clearly stated in the employment contract. Otherwise, enforcing it may be challenged, particularly in countries where preventing someone from working without legal grounds could be considered a restraint of trade.

Employers must also continue to uphold all contractual obligations during garden leave, including pay, benefits, and statutory entitlements.

How can Remote help?

When hiring through Remote, our employment contracts can include garden leave clauses where legally appropriate. Our local experts help ensure such clauses are enforceable in each jurisdiction and aligned with labour law best practices during the offboarding process. Learn more.