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Home Settlement agreements Garden leave

Garden leave and

settlement agreements

In this guide

Garden leave – or gardening leave – means not coming

in to work, but still getting paid. It can only be enforced
on you once you have resigned with notice or been
dismissed with notice.

In this short guide, we consider what exactly it is, what

practical implications it may have for you, any
settlement agreement you may negotiate and what
your rights are if you are placed on it.

See also the example/template we provide of a

settlement agreement with garden leave.

What exactly is garden leave?

The term ‘garden leave’ describes the idea that an
employer may want an employee out of the way, and
‘out of the house’ and therefore ‘in the garden’. It is
also associated with the idea that an employee being
forced to stay at home might as well do the gardening!

During garden leave, you are still contracted to the

employer, but there are certain conditions that you
need to meet, the main ones normally being that you
do not attend the workplace, you cannot contact
customers or employees, and that you have an
obligation to remain loyal to the employer during the
period.

Technically, garden leave can only be enforced on you

once you have resigned with notice or have been
dismissed with notice. If your employer says that you
must stay away from work at any other point in their
employment then this will be a type of suspension, not
garden leave.

Restrictions on employees
during garden leave
Some restrictions commonly imposed on you if you are
on garden leave include:

Contacting suppliers, clients and customers

Contacting colleagues
Attending the workplace
Accessing work emails or computer systems
Accessing work databases
Downloading confidential information
Contacting or working for competitors
Retaining use of company car, laptop,
smartphone, etc where these are for work
purposes only and not considered benefits – you
remain entitled to receive all benefits during
garden leave.

However, you will be expected to be available to

provide assistance to your employer in the event that
they require information or support within the given
notice period. Clear rules should be found in your
contract under the garden leave clause.

Why does garden leave exist?

Garden leave is commonly used by employers as a way
of protecting themselves and their resources from you
when you are leaving employment.

They may be worried that you will use your notice

period to acquire information to take with you when
you finally leave. Most jobs require a certain amount of
confidentiality and will involve you being privy to
protected information and business plans.

One motivation behind your employer putting you on

garden leave when you leave the company is to
prevent you from immediately acquiring a new role
working for a competitor, and using recent knowledge
that you have gained in your previous position to put
your new employer at an advantage.

Garden leave also gives your employer the opportunity

to build new relationships with your clients, during a
period in which you cannot contact them.

Common situations where you could

be put on garden leave:
If there is a good chance that you will join a
competitor, the employer may want to introduce
a new employee to clients and have time for
them to settle them in before you are free to
start a new role as you may try to take your old
clients with you as soon as you are able.

If the employer is concerned about the

enforceability of post-termination restrictions or
restrictive covenants in your contract, and so
want to protect themselves, at least for the
duration of your notice period.

Reasons an employer might put you

on garden leave, but where pay in lieu
of notice would be more usual
If there are concerns that you will have a
negative impact on your fellow employees if you
stay at work while completing your notice period.
If your employer is worried that you will either
share negative views about the company with
customers or clients.
If there is a chance that you will download
confidential information about clients to take
with you.

More on pay in lieu of notice

Top Tips
Alex Monaco

1. Check if your employer has a contractual

right to put you on garden leave

2. Ensure you continue to receive all your

benefits

3. If you want to end your garden leave early,

seek to agree this with your employer in the
first instance

Always read your contract!

As always, it is worth checking your employment
contract when you know you will be leaving your job to
understand exactly where you stand with your
employer.

Most employment contracts now specify that the

employer has the right to put an employee on garden
leave if they resign or are dismissed.

In some circumstances where there is not a garden

leave provision in an employment contract, an
employer may be in breach of contract if they send you
home with no work, even if you are still on full pay.

This is because the courts have increasingly been

willing to imply that employees have a “right to work”,
and so this is why garden leave needs to be specifically
mentioned in an employment contract to be
enforceable.

This is a relatively recent development in the world of

employment law.

It used to be more widely assumed that employees did

not have the right to work. In those circumstances,
employers believed that provided their employees
continued to receive their pay and benefits, they could
be required to stay away from work at any time during
their employment without the employer breaching
contract. This is not now the case.

Garden leave: Is it good or

bad?
Whether or not you view garden leave positively or
negatively depends on your individual circumstances.

Some employees see it as a paid holiday, while others

feel as if they are heavily restricted in their actions, are
desperate to get on with finding a new job, and believe
it could be detrimental to their ongoing career.

It’s important to note that many garden leave clauses

will include restrictions on not just employment with a
competitor, but also on competitive activities. This
could include setting up your own business in
competition with your previous employer.

Do you have grounds for

termination of garden leave?
If you are put on garden leave you are still contracted
by your old employer so you are not allowed to “rejoin”
the job market until your notice period is over.

If you want to be released from a garden leave clause in

your contract, it is worth first taking the initial step of
simply asking your employer.

If you explain your situation they may be sympathetic

and receptive to releasing you from garden leave,
especially if you were a good employee and are
planning to move to a non-competitor, or a new
industry sector.

Some employees choose to take a risk and refuse to

be put on garden leave, instead of starting work with a
new employer during the time immediately after
leaving.

If you do this your employer is totally within their rights

to sue for damages, although in most cases it would be
a very hard claim for them to win as they have to prove
a loss resulting from the breach of contract (the
breach of contract being you starting work with
another employer when the garden leave clause in
your contract forbids you from doing so).

In such circumstances, it is more likely that your

employer would apply for an injunction to prevent you
from working elsewhere during the remainder of your
notice period.

If your employer has a contractual right to put you on

garden leave, and you are going to a competitor, an
injunction will be relatively straightforward for your
employer to obtain.

An important aspect of leaving any employment which

should not be forgotten is also making sure that you
leave a role with a good employment reference, and
refusing to abide by garden leave restrictions can put
this in jeopardy.

At Monaco Solicitors we have often negotiated with

employers so that employees who may have left their
employment during a dispute can leave with a positive
reference – this can be a condition written into your
settlement agreement.

Read more about this in our guide on obtaining

references in settlement agreements.

Garden leave as grounds for a

constructive dismissal claim
If you do not have an express garden leave provision in
your contract you could claim that your employer is in
breach of their contract with you. In reaction to this
breach of contract, you may have grounds to claim
that you have been constructively dismissed.

It can be easier to argue this claim if you can show that

you need to work to preserve your skills, so being
excluded from the business has had a detrimental
effect on your ongoing work life and on your ability to
earn an income. A valid claim of constructive dismissal
can cause your notice period and restrictive covenants
in your contract to become void. See our detailed
article on constructive dismissal for more.

Next steps
In addition to reading around the subject and having a
look at some of the guides highlighted above, the
following two items on our website may be of particular
interest:

Example of a letter requesting release from a

restrictive covenant
Example of a settlement agreement for an
employee placed on extended garden leave

If you are unhappy about the way you have been

treated in relation to garden leave, then please don’t
hesitate to get in touch with us at Monaco Solicitors.

We are an established firm of specialist employment

solicitors who only handle cases for employees. ( We
do not work for employers.) So we can advise you on
the strength of your legal case and ways in which we
might be able to help you resolve it.

Contact us:

Via this website link

By phone on 020 7717 5259
By email:
communications@monacosolicitors.co.uk.

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