I wonder how I can manage employees on garden leave?

Garden leave can be a valuable tool when an employee is leaving for a competitor or stepping away from a sensitive role. Used well, it protects client relationships, confidential information, and business stability during transitions. Used poorly, it can trigger legal disputes and morale issues.

This article explains what garden leave is, when employers use it, and how to manage it lawfully and practically.

What is garden leave?

Garden leave is the period during which an employee who is leaving the business remains employed and paid but does not work (or works only on restricted duties). Its purpose is to protect the employer’s business while removing the employee from commercially sensitive activity. It typically applies during a notice period and is most common for senior, client-facing, or strategically important roles.

What does the law say about garden leave?

An employer’s ability to require garden leave normally depends on having an express contractual right to do so. Without that clause, sending someone home and refusing work can risk breach of contract or, for resigning employees, potential claims that the employer has fundamentally changed the bargain. Garden leave must be reasonable in duration and scope and should be no longer than necessary to protect legitimate business interests.

During garden leave, the employment relationship continues, so statutory and contractual rights and obligations generally remain in force, including pay, benefits, confidentiality, and the implied duty of fidelity. Garden leave usually runs during notice, so employers should consider the total period of restraint to support enforceability. Practical controls on access to systems and clients must be proportionate and consistent with data protection duties.

Key employer obligations and legal principles

• Contractual right and reasonableness: Employers should identify and rely on an express garden leave clause and apply it in a manner that is reasonable in time and purpose, aligned with the protection of confidential information, client connections, and workforce stability.
   
• Pay and benefits: While on garden leave, the employee remains employed and entitled to their normal salary and contractual benefits, except for those genuinely contingent on active work (for example, commission or bonus payments). Holiday continues to accrue, and notice provisions remain in force.
   
• Duties during leave: Employees remain bound by contractual and implied duties, including fidelity, confidentiality, and obedience to lawful and reasonable instructions. Employers may require availability for handover, for answering reasonable queries, or for limited project work, consistent with the clause.
   
• Interaction with restrictive covenants: Garden leave can complement post-termination restrictions. Employers should consider whether any post-termination covenants need to be tailored to account for a lengthy garden leave period to avoid the combined effect being excessive.
   
• Communications and client contact: Direct client and colleague contact can be paused or controlled during garden leave where proportionate and contractually supported. Provide a neutral messaging plan to protect relationships and avoid allegations of unfair treatment.
   
• Systems access and data protection: Access to emails and systems may be suspended or limited on a risk-based basis, with clear records and proportionate controls. Ensure any monitoring or data access changes comply with data protection law, with appropriate notices and security.
   
• Discrimination and whistleblowing risks: Decisions about garden leave must not be influenced by protected characteristics or because the employee raising protected disclosures or asserting workplace rights. Keep decision-making clearly linked to legitimate business protection.

What should employers do?

Employers should:

• Issue a clear garden leave notice: Confirm the contractual basis, start date, duties during the leave, pay/benefits, and any limits on contact or system access.
   
• Secure information and property: Remove or restrict access to systems and premises, collect devices, and remind the employee of contractual obligations.
   
• Plan client and team messaging: Communicate a neutral, business-focused narrative and reassign key relationships to protect continuity.
   
• Manage the handover: Schedule structured knowledge transfer, require availability for queries, and document completion.
   
• Monitor and review: Keep the period under regular review, adjust controls proportionately, and confirm end-of-employment steps and any post-termination restrictions.

What are the risks of getting this wrong?

Getting garden leave wrong can trigger legal and commercial issues. Employers should be alert to:

• Breach of contract/constructive dismissal: Imposing garden leave without a contractual right, or applying it unreasonably, may give rise to risks of repudiatory breach and undermine the enforceability of restraints.
   
• Discrimination and whistleblowing detriment: Using garden leave in response to protected characteristics or protected disclosures can lead to significant tribunal liability and reputational harm.
   
• Enforceability of restraints: Excessive garden leave plus lengthy post-termination covenants may be harder to justify, weakening protection when it is most needed.
   
• Loss of clients and information security: Poor communications or weak controls can damage relationships and increase the risk of data loss or misuse of confidential information.
   
• Employee relations and reputation: Heavy-handed processes can harm morale, retention, and market perception, especially where senior departures become public.

Summary

Garden leave is a powerful but intrusive tool. To use it effectively, rely on a clear contractual right, act for legitimate business reasons, and keep the period and controls no more than necessary. Pay and benefits must continue, duties and confidentiality remain in force, and communications, handover, and data security should be planned from the outset.

By applying a documented, proportionate approach and conducting regular reviews, employers can protect key relationships, information, and stability while limiting legal and reputational risk.

Further Advice

If you have any queries on this topic or any other employment-related matters, our Peace of Mind Team is here to provide expert guidance. Our Document Audit Team can also assist in drafting relevant documents.

Contact our Employment Team by emailing employment@warnergoodman.co.uk or calling 023 8071 7717.