Garden Leave Explained

Garden leave (sometimes called gardening leave) is a practice where an employee who has resigned or been dismissed is required to remain at home — or at least away from the workplace — for the duration of their notice period. During this time, the employee:

• Remains employed by the employer
• Continues to receive their full contractual salary and benefits
• Is bound by all contractual duties — including confidentiality, fidelity, and any express garden leave or restrictive clauses
• Cannot work for another employer or start a competing business without the employer's consent

The practical effect is to keep the employee away from clients, confidential information, and the workplace during a sensitive transition period — protecting the employer's business interests while fulfilling the contractual notice obligation.

An employer can only lawfully place you on garden leave if your contract of employment contains an express garden leave clause authorising them to do so. Without such a clause, an employee could argue they have a right to work during the notice period — in some cases (particularly where remuneration depends on performance or where skills might deteriorate) courts have upheld this right.

If your contract does contain a garden leave clause, the employer can typically place you on garden leave simply by notifying you in writing that they are exercising their right to do so. You do not need to consent.

During garden leave, the employer must continue to pay your full salary and provide all contractual benefits. They cannot simply stop paying you while you are on garden leave — this would be an unlawful deduction from wages and a breach of contract.

Garden leave interacts closely with post-termination restrictive covenants. Restrictive covenants (non-competition, non-solicitation, and similar clauses) usually run from the date employment ends, not from the date of resignation. Garden leave effectively extends the period before you can join a competitor — a six-month garden leave followed by a six-month non-compete covenant means you cannot work for a competitor for up to 12 months after handing in your notice.

Courts will sometimes reduce the period of an enforceable restrictive covenant to account for a period of garden leave if both together appear unreasonably long. This is why employers must carefully balance garden leave and restrictive covenant periods.

If your employer tries to enforce an excessively long combined period, you may be able to challenge the restrictive covenants on grounds of unreasonableness. Seek legal advice — this is a complex area where the courts assess enforceability on the specific facts.

Garden leave periods are sometimes brought to an end early — for example, where both parties agree, where the employee is released to join a new employer sooner than the notice expiry, or through a settlement agreement. An employer who wishes to end garden leave early and release the employee from their contractual obligations must do so by agreement — they cannot unilaterally shorten the notice period once garden leave has begun without the employee's consent, as this may affect the employee's pay entitlement.

Where a settlement agreement is used to bring garden leave to an early end, key points to negotiate include:

• Whether outstanding salary for the remaining garden leave period will be paid as a lump sum
• Whether restrictive covenants will be reduced or waived entirely in exchange for an earlier release
• Confidentiality obligations — both the employer's obligations regarding the terms of the settlement and the employee's obligations regarding business information
• An agreed reference wording, since the employee will be moving to a new role sooner than the notice expiry suggests

From the employee's perspective, a lump-sum payment to end garden leave early is typically taxable as employment income to the extent it represents notice pay (PILON). The employer should advise on the tax treatment, but independent legal advice from a solicitor — which is a strict requirement for a valid settlement agreement — should include consideration of tax implications.

If your employer stops paying your salary during garden leave without your agreement, this is a fundamental breach of contract. You can accept the breach, treat yourself as constructively dismissed, resign, and seek Acas Early Conciliation — though this is an extreme step and specialist advice should be sought urgently.

Senior employees — particularly in financial services, professional services, and technology sectors — should be aware that many employment contracts in these industries include both a garden leave clause and substantial post-termination restrictive covenants. Before resigning, it is worth reviewing both the garden leave provision and any post-termination restrictions carefully. The combined effect of a lengthy garden leave period and a non-compete covenant can effectively remove you from the market for a significant period. Courts will consider the total restraint period when assessing whether the restrictive covenants are enforceable — an excessively long total period may give grounds to challenge the covenants' enforceability.

During garden leave, your employer typically retains the right to call you back to work if genuinely needed — for example, to hand over an important client or complete a critical project. If your employer requires you to attend during garden leave, they must pay you and the attendance does not generally restart the notice period. However, if being recalled to work would expose you to a new employer's client contacts or confidential information in a way that creates difficulties, seek advice before complying. It is also worth confirming at the outset of garden leave that your professional memberships, licences, or regulatory requirements remain in good standing — employers in regulated industries (financial services, law, healthcare) should continue to support CPD requirements or maintain professional indemnity cover during garden leave periods where this is contractually required. Failure to maintain required regulatory status during garden leave can have career consequences beyond the leave period itself. In all cases, documenting the terms of your garden leave in writing at the outset — confirming the start and end dates, the continuing obligations, and any agreed deviations — prevents later disputes about what was and was not permitted during the period. Your HR team or employment solicitor can help produce a brief written confirmation of agreed arrangements before garden leave begins.