What Is Garden Leave? A Guide for New Employers

Garden leave means an employee remains employed and paid during some or all of their notice period but does not carry out their normal work.

This explanation focuses on employment in England and Wales.

Lowdown

An employee on garden leave remains employed and continues to receive their usual pay and contractual benefits until their employment ends.^[1]

Why It Matters

Garden leave can keep a departing employee away from day-to-day work and sensitive information while their employment continues.^[1]

Garden leave is not the same as annual leave. Employees continue to build up holiday entitlement while employed. If you want an employee to use annual leave during their notice period, you must follow the applicable holiday notice rules.^[4]

If you want the right to require garden leave, include it clearly in the employment contract. Where the contract does not provide for it, the employee will generally need to agree.^[2]

Garden leave is different from payment in lieu of notice, or PILON. With garden leave, employment continues until the notice period ends. With PILON, employment normally ends immediately and a payment is made instead.^[1][3]

Post-employment restrictive covenants may apply after employment ends, whereas garden leave operates during the notice period. Check the contract to understand how the two work together.

Our Conclusion

Garden leave can protect a business during an employee's notice period. Make sure the contractual right to use it is clear and that the employee continues to receive their proper pay and benefits.

Sources

[1] Acas, When an employee does not have to work notice — Garden leave

[2] Acas, How to use our settlement agreement template — Garden leave

[3] HMRC, Employment Income Manual — Payments in lieu of notice and gardening leave

[4] GOV.UK, Holiday entitlement — Booking time off