When Should You Enforce Gardening Leave? (Plus Four Best Practices)

Not working for your notice period has got to be an employee’s dream, but what about the employer? Do they get any benefit from gardening leave, or is it just a costly decision? This blog explores what gardening leave is, its advantages and disadvantages and how you can use PayFit to support your policy implementation.

What is garden leave?

Garden leave is a policy in employment law that states when an employee leaves your company (voluntarily or let go), they must stay away from your business for the duration of their notice period. You still retain the employee, but they no longer have to attend the workplace.

It’s common practice to write this clause into employment contracts in case an employee decides to go work for a competitor, for example. This clause then keeps them at bay while they serve out their notice period. This can stop them from ciphering off clients or collecting helpful information to help your competitor thrive, i.e. trade secrets.

Why is it called gardening leave?

The etymology of garden leave is based on the fact that the leave is a period prohibiting working activities — for your company or a competitor’s. The employee on gardening leave can do personal activities, such as gardening (hence the name ‘gardening leave’). 

Pros and cons of gardening leave for employers

Pros 

• You keep your organisational data safe. By kicking the leaving employee out of your systems, you safeguard against any disgruntled employee behaviour, i.e. changing passwords and causing data breach problems. 

• Smoother transition for new employees. No interference from past employees with new starters; the new starter can just get on with their new role.

• Employees are still available to you. Knowledge transfer is so important; without sharing it, the employee takes it with them, and you no longer benefit from it. But as they're still technically employed by you, you can take this opportunity to ask for handovers to help the new employer settle in quickly. 

Cons 

• It can diminish productivity. By putting members of staff on gardening leave, your team is down by one person. This can leave their job responsibilities unattended, which means deadlines aren’t met, or project timelines are lengthened. 

• It can impact team morale. By essentially getting rid of an employee immediately, you can put a strain on other team members — asking them to pick up the slack without notice.

• It costs you money. With gardening leave, you're paying the full salary of the employee on leave, and you might also have started paying their replacement. This means you're out two salaries for the output of only one person. 

Use cases for gardening leave

When should you consider enforcing gardening leave? There are two common reasons:

Redundancy

If you find yourself in the difficult position of making employees redundant, you can create animosity amongst staff, increasing the chances of internal sabotage. Disgruntled staff can change passwords and do a lot of damage in a short space of time.

But by putting them on immediate gardening leave, you can ensure they leave the company without having manhandled a single thing, keep your data safe and your processes legally compliant. 

Working for a competitor

Sometimes, employees are poached by competitors - this puts your company at an instant disadvantage. Without enforcing gardening leave, employees can continue to access strategic documents and data which could be used by the employee to help their new employer compete against you.

In this instance, gardening leave is necessary. 

How long is gardening leave in the UK?

Employers usually enforce gardening leave for the employee's notice period. So, as soon as they officially hand their notice in, you can enforce gardening leave. Let’s say your team leader has a notice period of three months; you can put them on garden leave for this entire period. If your junior marketing executive has a notice period of one month, you would enforce their gardening leave for this shorter period.

What are the rules around gardening leave?

As you still technically employ them, they are bound by your terms of employment. Therefore, you can still ask them to complete the work if you want or ask them to create a handover for the new staff member. 

Garden leave Vs PILON

PILON (Payment In Lieu of Notice) is a payment employees receive to cover the work they would have done had they worked their notice period. The employee contract is terminated, and they no longer work for the company. Employers might use PILON if there’s been a case of gross misconduct or if immediate contract termination would cause less disruption to business operations.

With gardening leave, the employee receives pay for their notice period as usual but does not have to actively work for the company. They might need to complete handovers or answer questions, though.

Garden leave Vs notice period

A notice period is the period an employee works before leaving the company, and garden leave is usually for the duration of the employee’s notice period. So, where the notice period is four weeks, garden leave would be enforceable for those four weeks.

Four best practices for employers implementing gardening leave

1. Consider whether the decision is worth it

Cutting an employee who is an integral part of the team loose can have a significant impact on your organisation. Not just team productivity but bottom-line figures. Putting them on gardening leave might leave you in a sticky situation.

It's a good idea to create a policy that outlines when you'll implement garden leave and when you won't bother. This helps make the decision-making process short and definite. 

2. Ensure you remain legally compliant with gardening leave 

To ensure garden leave is enforceable, you must include a garden leave clause in your employment contracts. You must also only enforce garden leave for the duration of the employee’s notice period, and you must continue to pay the employee in full to remain compliant.

Ensure you remain fair and consistent when implementing your gardening leave clause. Don’t let personal characteristics or bias cloud your judgement.

3. Keep communication transparent

Employees should know all about your gardening leave policy, which means including clear and concise documentation about the leave in your employee handbook.

Detail when the leave would be enforceable and what it means for their contractual obligations. Store your document digitally so it's accessible to every member of staff. 

4. Make sure the clause reasonably protects business interests

You need to be both reasonable and comprehensive when creating your contractual clauses — i.e. if you go to work for a competing brand, we reserve the right to put you on gardening leave.

Protecting business interests is the whole point of implementing this clause in the first place, so take time to understand what could impact business operations and include all situations where you would consider gardening leave.

What to include in your garden leave clause

So, what should your gardening leave clause say?

• Define garden leave. The clause should include a definition of garden leave and when it might be enforced, i.e., give example scenarios, such as redundancy, etc.

• Outline your expectations. For example, you might want them to return all company property, such as laptops or phones. You might also want to enforce a no-contact rule for contacting other employees or clients. You might want to ensure they’re available to contact you if you have any questions or need them to create a handover. 

• Confirm pay and length of leave. To make sure employees understand what the leave means for them, share the length of leave and confirm they will receive full pay for the duration.

Managing garden leave with PayFit  

Using HR and payroll software like PayFit makes implementing garden leave clauses and bulk offboarding employees a doddle.

1. As soon as you remove employees from the HR system, they’re automatically deactivated across the entire PayFit platform. 

2. From inside the PayFit platform, you can review and draft employment contracts to ensure they include valid garden leave clauses.

3. Access support and advice from your dedicated account manager. So, if you’re not sure how best to utilise the features, give us a shout.

4. Ensure contractual and legal requirements are met with automated pay calculations.

Want to see our leave and absence management features in granular detail? Schedule a personalised product demo.