This is where an employee is leaving your business (due to either a resignation or contract termination) and you instruct them to stay away from their job during their notice period.
They remain on your payroll during that time, but must stay away from your premises. They must also not contact any of your clients and customers.
Garden leave is good business practice if you have concern your employee has knowledge of company confidential information and trade secrets.
In this guide we take a closer look at how to apply it and what it means for your business.
But if you need immediate help, get in touch for guidance on garden leave employment law.
How does garden leave work?
It’s a clause in your employment contract that orders a member of staff to serve out their notice at home. They don’t report in for work, but receive full pay.
The employee is also still under contract and they have to abide by any clauses you have in their contract—a typical example is a duty of confidentiality. The restrictions put in place include the following:
- Blocked from accessing any data you choose.
- They can’t arrive at your premises to complete work.
- Prevented from talking to clients, customers, or suppliers.
- Blocked from making a statement about you to the media.
- Can’t start a new job during their garden leave.
- Must take the rest of any annual leave.
There are several reasons why you may want to use this in your business.
It may seem like a bad idea to pay an employee to do nothing, but there are benefits of using garden leave. For example:
- If your staff member is joining a competitor, it ensures they can’t start working for a business rival with immediate effect.
- If there are important projects you’re working on, it keeps the employee away from any potentially important information.
- You minimise the risk of the staff member becoming disruptive or unproductive during their final weeks with your business.
With gardening leave, take employee rights into consideration. They may, for instance, come to you and request it.
If they do, it’s up to you whether or not you agree to their request. Bear in mind the advantages and disadvantages of doing so.
But remember, if gardening leave is not in a contract—as in, you don’t have a clause—then you can’t place an employee on garden leave.
However, you can still offer it to your employee, even if it’s not in their contract. Some may view it as a welcome break and enjoy the time off with pay.
When you’re setting up your garden leave policy, you can include details about their time with your business.
With gardening leave, return company cars must if they’re for business use only. The same goes for any mobile phones or other devices they have. If employees use company phones or cars for personal use, you should ask for these back at the very end of their contract—unless otherwise stated in the employment contract.
How to inform your employee
In your policy you can establish what your garden leave notice period will involve. You can cover the finer details of their proposed period of garden leave.
If you decide to place an employee on garden leave, you’ll need to make it clear in writing. Provide them with a garden leave letter—you can read our template below. Remember to adapt this to meet your business’ requirements.
Dear [employee’s name],
I refer to our meeting on [date] and our subsequent letter of [date] confirming your dismissal with effect from [termination date]. This is from the role of [employee’s role].
Your period of notice starts from [date] and ends on [termination date]. During this notice period, we are exercising our contractual right to place you on garden leave. As set out within your contract, please refrain from entering the [business name] property for the length of this period. We also require you to avoid contacting any of our clients during your garden leave.
You must also avoid contacting any of our competitors.
If you have any business property in your belongings, please arrange with your line manager a suitable time to return this to us.
For the avoidance of doubt, you remain bound by all the terms of your contract during the period of garden leave.
Should you have any questions, please contact your line manager.
*End of sample letter*
Need our help?
Get in touch for advice on whether garden leave is the right choice for your business: +61404532026.