Garden leave: your rights explained

Garden leave is when your employer tells you to stay away from work during your notice period while remaining employed and paid. It sounds like a holiday. It is not, and the restrictions that come with it matter more than most people realise.

What garden leave actually means

You are still employed. Your contract continues, your pay and benefits continue, and every duty you owe your employer continues with them, including confidentiality, loyalty and the duty not to compete.

What changes is that you are not required, and usually not permitted, to attend work or carry out your duties. Access to systems, email and clients is normally cut off on day one.

Employers use it when notice has been given on either side and they would rather you were not in the building: to protect client relationships, to stop information walking out of the door, and to keep you out of the market for the length of your notice.

Can your employer insist?

Only if it has the right to. A well-drafted contract will contain an express garden leave clause, which is what makes it enforceable. Check yours.

Without an express clause, sending you home can be more difficult. Some employees have a right to actually work rather than just be paid, particularly where skills go stale without practice or where reputation and profile depend on visible work. If your contract is silent and you are being sidelined, that is worth advice rather than acceptance.

What you are entitled to during it

• Full pay, at your normal rate, for the whole of the notice period.
• Contractual benefits, such as pension contributions, private medical cover and a company car, unless the contract clearly says otherwise.
• Bonus and commission, which is the usual battleground. Whether you are entitled depends on the scheme wording, whether the payment date falls inside your notice, and whether there is a requirement to be in employment and not under notice on that date.
• Holiday, which continues to accrue. Employers can normally require you to take accrued holiday during garden leave, but they must give the correct notice to do so.

What you cannot do

Because you are still employed, you cannot start work for a new employer, and you cannot solicit clients, customers or colleagues. Setting up a competing business while on garden leave is a straightforward breach of your duties, and it hands your employer grounds to stop paying you and to seek an injunction.

You also remain bound by confidentiality. Taking client lists, pricing or contact details with you is the single fastest way to turn an ordinary exit into litigation.

Be careful with LinkedIn. Announcing a new role, or messaging contacts about where you are heading, can amount to soliciting depending on what you say and to whom.

How it interacts with restrictive covenants

This is the point that has real financial consequences. Post-termination restrictions such as non-compete and non-solicitation clauses run from the end of your employment. Garden leave keeps you out of the market first, and then the restriction period begins on top.

Many contracts contain a set-off clause, so time spent on garden leave is deducted from the length of any covenant. If yours does not, you could be sidelined for three months of notice and then restricted for a further six.

Courts will also look at the total period out of the market when deciding whether a restriction is reasonable and enforceable at all. If a long garden leave is being stacked on top of a long non-compete, the covenant is more vulnerable than your employer may be suggesting.

Garden leave, PILON and what to negotiate

If your contract has a payment in lieu of notice clause, your employer can choose to end your employment immediately and pay the notice instead. That ends your duties sooner but usually starts the covenant clock sooner too, so which route suits you depends entirely on where you are going next.

Exits are often more negotiable at this stage than people assume. Common asks that succeed: a shorter garden leave or an early release date, an express set-off of garden leave against covenants, a narrowing or waiver of the non-compete for a specific new role, an agreed reference, and clarity on bonus.

If you have a new role lined up and garden leave or a covenant is standing in the way, get the contract in front of a specialist employment solicitor before you sign anything or announce anything. What looks immovable in a contract is very often negotiable in practice, and occasionally unenforceable.