Garden leave is a contractual arrangement where an employer requires an employee to serve their notice period at home, away from the workplace, while continuing to receive full pay and benefits. The employee remains employed and bound by their contractual obligations — including confidentiality and non-compete restrictions — but is not required to attend work. It is a common way to protect business interests during the notice period.
This guide covers how garden leave works, the legal framework, and how employers and employees should manage it.
Key takeaways
- Garden leave requires a contractual clause — you cannot impose it without one.
- The employee receives full pay and benefits during the garden leave period.
- The employee remains bound by contractual obligations — confidentiality, non-compete, and intellectual property clauses continue.
- Garden leave is different from pay in lieu of notice (PILON) — in garden leave, the employment relationship continues.
- Garden leave can be unilateral — the employer decides to place the employee on garden leave, not the employee.
How garden leave works
Garden leave operates during the employee’s notice period. When you give notice of termination (or the employee resigns with notice), you can require the employee to stay away from the workplace for the duration of the notice period.
During garden leave:
- The employee continues to receive salary, benefits, and pension contributions as normal.
- The employee must not attend the workplace, contact colleagues, or access systems.
- The employee remains bound by all contractual obligations — including confidentiality, non-solicitation, and intellectual property clauses.
- The employee continues to accrue statutory holiday and can take accrued leave during the garden leave period.
The purpose is to protect the business from the risk of the employee taking information, clients, or competitive knowledge during their notice period.
The contractual requirement
Garden leave requires a contractual clause. Without one, you cannot unilaterally require an employee to stay away from the workplace during their notice period. If you do, the employee may claim constructive dismissal — you are unilaterally varying the terms of employment.
A typical garden leave clause includes:
- The employer’s right to require garden leave during the notice period.
- The duration — typically the full notice period or a specified portion.
- The employee’s obligations — not to attend work, not to contact colleagues or clients, not to access systems.
- The employer’s obligations — to continue paying salary and benefits.
- A provision for the employer to waive the notice — allowing the employee to leave immediately with pay in lieu of notice.
Garden leave vs. pay in lieu of notice
These are different arrangements:
| Element | Garden leave | Pay in lieu of notice (PILON) |
|---|---|---|
| Employment continues | Yes | No — employment ends on the PILON date |
| Salary and benefits | Paid throughout | Paid as a lump sum |
| Contractual obligations | Continue during garden leave | Non-compete and confidentiality survive post-termination |
| Employee status | Still employed | No longer employed |
| Holiday accrual | Continues | Stops at PILON date |
PILON is often used when the employer wants the employee to leave immediately. Garden leave is preferred when the employer wants to maintain the employment relationship for the duration of the notice period — for example, to enforce post-termination restrictions.
Legal risks
Garden leave carries several legal risks:
Constructive dismissal
If you place an employee on garden leave without a contractual clause, they may resign and claim constructive dismissal — you have unilaterally varied their terms of employment.
Redundancy
If garden leave extends beyond 4 weeks, the employee may claim redundancy under the Employment Rights Act 1996, s.139. The argument is that the employer has no work for the employee, which constitutes a redundancy situation.
Discrimination
Placing an employee on garden leave because of a protected characteristic (disability, pregnancy, race, religion) is discriminatory and can result in a claim under the Equality Act 2010.
Non-compete enforceability
Garden leave strengthens the enforceability of post-termination restrictions. Courts are more likely to uphold restrictive covenants where the employer has paid the employee during the notice period, because the employee has been kept away from the market during the critical period.
Employer best practices
- Include a garden leave clause in all employment contracts — especially for senior and client-facing roles.
- Document the decision — record the reason for garden leave and the date it starts.
- Communicate clearly — tell the employee they are on garden leave, what they must not do, and how long it lasts.
- Continue paying salary and benefits on time — a failure to pay is a breach of contract.
- Retrieve company property — laptops, phones, access cards, and any confidential documents.
For more UK context, see our guides to suspension leave, notice periods, and compulsory leave.
Frequently asked questions
Is garden leave the same as suspension?
No. Suspension is typically imposed during a disciplinary investigation and may be paid or unpaid. Garden leave is a contractual arrangement during the notice period, and the employee must be paid.
Can an employee refuse garden leave?
If the contract contains a garden leave clause, the employee must comply. Refusing to comply with a lawful contractual instruction may be a breach of contract.
Does the employee accrue holiday during garden leave?
Yes. The employee continues to accrue statutory holiday and can take accrued leave during the garden leave period.
Can garden leave be waived?
Yes. The employer can waive the garden leave and allow the employee to leave immediately — often with pay in lieu of notice. The clause should specify how this can be done.
Does garden leave affect post-termination restrictions?
No. Post-termination restrictions (non-compete, non-solicitation) run from the end of employment, not from the start of garden leave. Garden leave strengthens their enforceability by keeping the employee away from the market during the notice period.
Putting it into practice
Five steps keep your garden leave process legally safe:
- Include a garden leave clause in all employment contracts — especially for senior roles.
- Document the decision and communicate it clearly to the employee.
- Continue paying salary and benefits on time throughout the garden leave period.
- Retrieve company property and restrict system access immediately.
- Monitor the garden leave period and plan for the employee’s departure or return.
A leave management system that handles garden leave as a distinct absence type, tracks the notice period, and manages the transition to post-termination restrictions keeps this sensitive process compliant and secure.
Sources
Last updated: 26 July 2026. This article is general information, not legal advice. Garden leave carries specific contractual and legal risks — seek legal advice for specific situations.