Garden Leaves- Definition, Advantages, Disadvantages And Rights

11 mins read

Employers implement garden leave to safeguard their business from the potential negative effects of key employees leaving. However, utilizing garden leave can pose financial costs and risks for the employer.

Let's discuss the advantages and disadvantages of garden leave, providing advice on when it's suitable and when it might not be the best option.

Definition & Its Origin Of Garden Leave

To begin with, let us study the definition and origin of garden leave:

Definition

Garden leave refers to a situation in employment where an individual is required to serve out their notice period away from the workplace, typically at home, while still receiving their full salary and benefits. During this time, the employee is usually prohibited from engaging in work-related activities, such as contacting clients or colleagues, to protect the employer's interests.

Origin

The concept of "garden leave" has its roots in British employment practices, particularly in the legal framework surrounding employment contracts and termination procedures. Over time, the term "garden leave" has become widely recognized in employment law and HR practices, both in the UK and in other jurisdictions influenced by British legal traditions. 

Why Employers Use Garden Leaves 

Employers resort to using garden leaves for the following reasons: 

• Employers often use gardening leave to prevent senior employees from entering the job market for a certain period. 

• This measure is typically applied to individuals with access to sensitive information like pricing data, advanced technical knowledge, or crucial customer contacts.

• Employers aim to prevent employees from accessing or utilizing confidential information for personal gain or sharing it with competitors.

• Gardening leave is commonly linked with restrictive agreements that stop employees from luring away customers or contacting associates for a specific duration. 

• An employee can initiate garden leave with the employer's approval as part of an agreed departure, typically documented in writing.

What Happens To An Employee During Garden Leave?

Let us study what exactly happens to employees during garden leaves: 

• While on gardening leave, an employee remains under contract with the employer but stays away from work duties. 

• During this period, the employee is not obligated to work, show up at the office, or interact with coworkers and clients. 

• However, the employer may ask for the employee's help, support their ongoing projects, or even require them to return to the workplace while on gardening leave.

• If employees plan to go on vacation or travel abroad during their garden leave, they must notify their employer.

• During gardening leave, the employment contract remains in effect. The employer is required to pay the employee their regular salary and maintain all contractual benefits until the leave period ends.

• Employees who are on garden leave must adhere to all the terms outlined in their contract. This includes behaving honestly, keeping information confidential, and refraining from engaging in work for another company or themselves while on garden leave.

Advantages Of Garden Leave

Garden leave offers both business and legal advantages as it allows the employer to maintain authority over the employee as outlined in their employment contract, whether explicitly stated or implied.

The benefits of garden leave can include the following: 

• When the employee leaves, they should be around to answer any questions or assist with transitioning to the new hire.

• Helping the new employee take over smoothly, particularly in dealing with customers, to maintain a positive reputation while ensuring that the departing staff member does not harm future connections.

• Preventing the former employee from accessing client contact details or any other confidential company information is crucial. It's important to stop them from using this data inappropriately.

• Preventing a former employee from re-entering the job market until their knowledge becomes outdated and no longer valuable to competitors.

• Restricting an employee from taking up other job opportunities or starting their own business until after the notice period has finished.

• It's important for a worker to avoid actions that go against their employer's interests until their notice period is over.

• During gardening leave, it's important to make sure that the employee continues to follow all terms in their contract. This includes their responsibility to stay loyal and keep information confidential.

• An employer can take legal action to claim compensation and stop an employee from harming the company or gaining from breaking their responsibilities.

• Gardening leave is a helpful tool for employers who are worried about enforcing post-termination restrictions on employees. 

Disadvantages Of Garden Leave

Let us also study some of the disadvantages of garden leave from employers' point of view: 

• While garden leave offers advantages, it can also pose challenges for employers due to the expenses of retaining the departing employee as the employee continues to receive their full salary and all other benefits outlined in their contract. 

• Employers need to consider the legal risks of implementing garden leave without a specific contract clause permitting it. If an employee's pay relies on their ability to work, like earning commissions or bonuses, or if working is crucial for maintaining professional skills, not providing work could lead to a breach of contract lawsuit.

• If an employee feels pressured to quit due to the employer's actions, they may choose to claim constructive dismissal. This could lead to the loss of garden leave protection and result in the employer facing expensive legal battles. 

• Furthermore, the employer might forfeit the ability to enforce other parts of the employee's contract, including post-termination restrictions and confidentiality agreements.

Duration Of Garden Leave & Its Impact 

The length of time someone is on garden leave depends on their employment contract. Usually, it matches how long they need to give notice. More experienced staff might have longer garden leave. Normally, garden leave doesn't go on for over 6 months.

Extended or unexpected garden leave can pose challenges for employees seeking new career opportunities. Prospective employers with immediate needs may not be willing to wait for a prolonged garden leave period to conclude, potentially hindering the employee's ability to re-enter the job market promptly.

Identifying Employees Suitable For Garden Leave

Garden leave serves as a safeguard for companies when key employees depart, especially top-level executives or directors with access to sensitive data and extensive client networks. This practice is implemented to prevent poaching or unauthorized information usage that may arise if departing employees remain in the workplace or maintain contact with colleagues and clients.

Garden leave can only be enforced by employers if it is specifically stated in the employees' contract. This provision allows employers to relieve employees of their duties and prevent them from entering the workplace.

When an employee is put on garden leave, it typically lasts for the duration of their notice period. However, if the notice period is unusually long, the employer might not be able to require garden leave for that entire time. In such cases, a court would likely determine that garden leave should only be imposed for a reasonable period necessary to safeguard the employer's interests.

Best Time To Use Garden Leaves

When an employee's contract is ending, and they need to serve their notice period, gardening leave may be implemented. This applies to situations like dismissal with notice, redundancy, or resignation. Whether gardening leave is appropriate depends on the specific circumstances of the case.

Gardening leave is a way for companies to protect themselves by keeping employees away from the workplace, coworkers, and clients during their notice period. If there's a chance that letting the employee keep working could harm the business, the employer might use a gardening leave clause in the contract to reduce this risk.

When To Avoid Gardening Leave 

Employers need to carefully consider the financial impact of placing an outgoing employee on gardening leave. If keeping a departing employee on contract would strain the company's budget, it may be wise to explore other options. 

Before placing an employee on gardening leave, an employer must have a specific clause in the employment contract allowing them to do so. This clause clarifies the employer's right to enforce gardening leave but does not guarantee a smooth process.

Some workers may not see gardening leave as a chance to relax or pursue interests while still getting paid by their employer. Instead, they might view it as an unfair restriction on their ability to work. Employers should be ready to enforce the terms of the gardening leave agreement if an employee refuses to comply.

While the possibility of a breach shouldn't discourage an employer from implementing gardening leave, it's important to limit the duration of the restriction to only what's essential for safeguarding the employer's business concerns.

Consequences Of An Employee Declining Garden Leave

Should a worker decide to leave their job abruptly, but their employer requires them to take garden leave instead, what happens in this scenario?

When an employee tries to quit suddenly, the employer can reject their resignation and keep them on garden leave instead of letting them go immediately. This means the employee must still serve their notice period without working, which prevents the employment contract from ending abruptly.

If an employee refuses to comply with garden leave terms, the employer may seek court intervention by requesting an interim injunction. This would be done to prevent immediate contract termination, which could harm the business. 

In order for restraint of trade rules to be enforced, the employer must demonstrate valid business interests that need safeguarding. These interests typically involve protecting confidential information, maintaining customer relationships, or ensuring workforce stability.

To enforce restraint, the employer needs to demonstrate that they will face harm if the employee is not bound by it. For instance, an employee moving to a rival company is more likely to be restricted than one exiting the industry entirely.

Employers' Guide To Making The Most Of Garden Leave

Gardening leave is useful when the employee has important client connections. Employers need to be careful when using gardening leave, considering both the benefits and drawbacks of keeping the employee away while still paying them.

• Employers can use practical tips to set up gardening leave for key employees. It's important to get legal advice before starting. Employers who already use gardening leave should make sure their contracts are clear and only protect their business interests.

• Make sure all top employees have a gardening leave clause in their contracts. This tells them what happens if they leave the job. Doing this helps make sure everyone follows the rules.

• Customize gardening leave rules based on the employee's job, experience, and notice period. Make sure the rules protect the company's interests without unfairly limiting the employees' options. This helps ensure the rules can be enforced effectively.

• To make sure the rules on what employees can do after leaving are followed, include in the contract that the time spent on gardening leave will shorten these rules. This makes it more likely for the courts to enforce these rules, reducing the time of restriction after leaving the job.

Rights And Obligations Under Garden Leaves

Employee Rights

Employees on garden leave are entitled to receive normal pay as per their employment contract. They retain their benefits and must adhere to the terms and conditions of their employment during this period.

Employee Obligations

During garden leave, employees are obligated to maintain confidentiality regarding company documents and sensitive information. They must also adhere to any restrictive covenants, such as non-compete agreements.

Preventing Careless Work

Garden leave serves as a strategic tool for organizations to prevent potential issues like careless work or sabotage by dissatisfied employees. By keeping such employees away from the workplace while still paying them, companies can mitigate risks effectively.

Summary

In conclusion, understanding garden leave is crucial for both employers and employees. By knowing the rights and obligations associated with this practice, you can navigate its implementation effectively.

Make sure to weigh the advantages and disadvantages thoughtfully before embracing or rejecting this practice. Stay knowledgeable, stay empowered. As you delve into the realm of garden leave, stay informed and seek advice when needed.

Frequently Asked Questions (FAQs)

1. What is garden leave?

Garden leave is a period when an employee is asked to stay away from work during their notice period after resigning or being terminated. The employee remains on the payroll but does not work, allowing them time to transition out of the company.

2. How is garden leave implemented?

Employers implement garden leave by including specific clauses in employment contracts that outline the conditions under which an employee may be placed on garden leave. This typically includes details such as salary continuation, restrictions on contacting clients or colleagues, and other relevant terms.

3. What are the rights and obligations during garden leave?

During garden leave, employees are entitled to receive their salary and benefits as per their contract. They must adhere to any restrictions outlined in their contract, such as non-compete clauses or confidentiality agreements. Employers must also fulfil their obligations regarding payment and benefits.

4. What are some of the pros of garden leave?

Garden leave provides a structured way for both employers and employees to handle the transition period after an employee decides to leave the company. It helps protect sensitive information, maintains client relationships, and allows the departing employee time to prepare for their next role.

5. What are some of the cons of garden leave?

While garden leave offers benefits, it can also lead to feelings of isolation or disengagement for employees. Employers may incur costs without receiving active work contributions from the employee during this period. Careful consideration of these factors is necessary before implementing garden leave.

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