Garden Leave: What It Is, What It Costs, and What Employers Get Wrong
Aug 24, 2026
The email lands on a Thursday afternoon. Your senior account manager is leaving, for a direct competitor. She knows your pricing, your clients, and your pipeline. Her notice period is three months. You want her out of the building today.
If your employment contract does not contain a garden leave clause, you have no legal right to stop her coming in, sitting at her desk, and spending her last three months talking to the people you most need to retain.
Garden leave is one of the most powerful tools available to employers when a key person walks. But it only works if it is written into the contract before someone hands in their notice. By the time you need it, it is too late to add it.
What is garden leave?
Garden leave, sometimes written as gardening leave, is an arrangement where an employee who has resigned, or been given notice of dismissal, serves their notice period away from the workplace. They remain employed throughout. They continue to receive their full salary and contractual benefits. They simply cannot come to work, cannot access company systems, and cannot take up new employment during that period.
The name is informal: the idea being that the departing employee is at home, tending their garden, while the notice period runs. In practice, it means they cannot act in ways that damage the business, whether that is soliciting clients, recruiting colleagues, or feeding confidential information to their next employer.
Garden leave is not suspension. It is not a disciplinary measure. It is a contractual right that must be exercised carefully and only where it is explicitly permitted by the employment contract.
Garden leave rules: what the law requires
There is no standalone piece of legislation called the Garden Leave Act. The right to place an employee on garden leave is a matter of contract law, not statute. This is the detail that catches most employers out.
To place someone on garden leave, the employment contract must contain a clause that expressly permits it. Without that clause, imposing garden leave without consent is likely to constitute a breach of contract, one the employee could act on. The Employment Rights Act 1996 governs the broader employment relationship, including notice rights and the right to receive pay during the notice period, but it does not create a standalone right to impose garden leave.
Where a contractual right exists, the key rules are:
- The employee remains employed throughout. All employment rights continue to apply.
- Full salary and contractual benefits must be paid. You cannot reduce pay or withdraw benefits during garden leave.
- Garden leave runs within the notice period. It does not extend it.
- The employee cannot be required to work during garden leave. They are released from their duties, not reassigned to lesser ones.
Garden leave must also be proportionate. Courts have been willing to restrain employers who use it for an unreasonably long period relative to the legitimate business interest being protected. A three-month garden leave for a senior sales director with client relationships to protect is defensible. Six months for an administrator with no client-facing role is not.
Garden leave and the notice period: what employers often miss
Garden leave and the notice period are not the same thing, but they run together. The notice period is the length of time between notice being given and employment ending. Garden leave is the arrangement governing where the employee serves that notice.
If the employment contract specifies three months' notice, garden leave can run for up to three months. It cannot be extended beyond that without the employee's agreement. If the notice period is only four weeks, garden leave buys four weeks of protection, potentially limited for senior or high-risk departures.
This is one reason why notice periods in employment contracts deserve as much attention as garden leave clauses. A short notice period is a short window of protection, regardless of what the garden leave clause says. When The HR Doctor reviews employment contracts, inadequate notice periods are one of the most common issues we find, particularly for roles where the cost of a damaging departure could run into six figures.
It is also worth distinguishing garden leave from payment in lieu of notice (PILON). Many contracts include both. PILON allows the employer to terminate employment immediately by paying the notice period in one lump sum. Garden leave keeps the employee on the books but away from the business. If the contract allows PILON and the employer chooses garden leave instead, the employee must be paid for the full notice period regardless.
Garden leave employee rights: what cannot be withheld
Employees on garden leave retain the full range of employment rights. There is no reduced version of employment during garden leave.
Salary continues at its normal rate. Contractual benefits, pension contributions, private medical insurance, company car, life assurance, all continue unless the contract specifies otherwise. Holiday continues to accrue at the statutory minimum rate, and employees can request to take annual leave during the garden leave period. Employers can also require employees to take accrued holiday during garden leave, provided the correct notice is given under the Working Time Regulations 1998.
What the employee cannot do is take up new employment before the garden leave period ends. They remain bound by the employment contract, including any confidentiality obligations and, where applicable, post-termination restrictions. Garden leave effectively reinforces those restrictions by keeping the employee in a formal employment relationship.
If an employer withholds pay, withdraws benefits, or attempts to force the employee to work during garden leave, the employee may have grounds to claim constructive dismissal.
Garden leave in a redundancy situation
Garden leave and redundancy are not mutually exclusive. An employer can legitimately place an employee on garden leave during a redundancy notice period, provided the contract permits it.
The key point is that redundancy pay is calculated separately. Placing someone on garden leave does not reduce their statutory or contractual redundancy entitlement. The notice period, and therefore the garden leave period, runs from the point at which notice is given. The employee continues to receive their full salary and benefits throughout, in addition to any redundancy payment.
Where garden leave during a redundancy process becomes complicated is in collective situations. If 20 or more employees are being made redundant within a 90-day period, collective consultation obligations under the Trade Union and Labour Relations (Consolidation) Act 1992 apply. Garden leave does not remove the requirement to consult. An employer who places employees on garden leave immediately and skips the consultation process is exposed to a protective award of up to 90 days' pay per employee.
For smaller redundancy situations, one or two people, garden leave during the notice period is relatively straightforward, provided the contract supports it and the individual consultation process has been followed correctly.
Garden leave and constructive dismissal: where employers create their own problems
The most common mistake employers make with garden leave is imposing it without a contractual right to do so. This is not a technical oversight. It is a breach of contract.
When an employer fundamentally breaches an employment contract, the employee has the right to accept that breach, resign, and claim constructive dismissal. Placing someone on garden leave without contractual authority, or without pay, is exactly the kind of repudiatory breach that triggers this. An Employment Tribunal claim costs Ā£14,000 to Ā£24,000 to defend whether the employer wins or loses. If the employer loses, the compensatory award for a senior employee can significantly exceed that.
Garden leave used as an informal disciplinary measure carries the same risk. If a manager decides to park a difficult employee at home during a performance process without following the ACAS Code of Practice on disciplinary procedures, and without contractual authority, the employer has created two problems where previously there was one.
Garden leave is a business protection tool. It should be used to protect legitimate interests, client relationships, confidential information, team stability, not as a way of avoiding difficult conversations or managing someone out informally.
Does your business have a garden leave policy?
For most SMEs, garden leave is not a standalone document. It is a clause in the employment contract. The practical question is whether that clause exists, and whether it is enforceable.
A well-drafted garden leave clause should specify: the employer's right to require garden leave at any point during the notice period; confirmation that full pay and contractual benefits continue throughout; a statement that the employee is not required to attend the workplace or perform duties; confirmation that confidentiality obligations and post-termination restrictions remain in force; and any restrictions on contact with clients, customers, or colleagues during the period.
Without this clause, there is no legal mechanism to prevent a departing employee from working their full notice period on-site, taking clients with them, and walking out the door with everything they know about the business. Many contracts in use by UK SMEs today were written before 2020 and have not been reviewed since. The world in which those contracts were drafted, before the Employment Rights Act 2025 raised the compliance bar, is not the world employers are operating in now.
A contract that was adequate in 2019 may not be adequate today. And you will not find out until you need to rely on it.
What does ACAS say about garden leave?
ACAS guidance confirms that garden leave is a legitimate arrangement where the employment contract permits it. The employee remains employed during the period and all statutory employment rights continue to apply. ACAS is clear that employers must continue to pay the employee their full contractual salary and benefits, and that the period counts toward continuous employment for all statutory purposes.
ACAS also makes clear that garden leave is not a disciplinary sanction. Where there is a genuine performance or conduct concern, the employer must follow the ACAS Code of Practice on disciplinary and grievance procedures. Placing someone on garden leave instead of following a proper process does not insulate the employer from tribunal exposure, it adds to it.
For current ACAS guidance on garden leave and notice periods, visit acas.org.uk.
Garden leave: common questions from employers
Can an employee refuse to go on garden leave?
If the employment contract contains a valid garden leave clause, the employee cannot simply refuse. The employer has a contractual right to require it. If there is no clause, the employee can refuse, and the employer has no legal mechanism to compel them.
Can garden leave be unpaid?
No. Garden leave must be paid at the employee's full contractual rate. Any attempt to reduce pay during garden leave is likely to constitute a breach of contract, potentially giving the employee grounds to resign and claim constructive dismissal.
Does garden leave count toward continuous employment?
Yes. The employee remains employed throughout garden leave, and the period counts in full toward continuous employment for statutory purposes, including redundancy entitlement, unfair dismissal qualifying periods, and notice rights.
Can you extend garden leave beyond the notice period?
No. Garden leave runs within the notice period and cannot extend beyond it without the employee's agreement. If longer-term protection is needed after employment ends, post-termination restrictions such as non-compete or non-solicitation clauses are the appropriate mechanism, but these must be carefully drafted to be enforceable.
Can a garden leave clause be added to an existing contract?
Yes, but only with the employee's agreement. A unilateral change to an employment contract, imposing a new clause without consent, is itself a breach of contract. The practical approach is to review and update employment contracts as part of a broader documentation audit, with proper communication and, where necessary, consultation.
Your contracts may not protect you the way you think they do
If your employment contracts were last reviewed before 2022, the garden leave clause, if one exists, may not reflect current law or your current business risk. Pre-2025 documentation is already carrying exposure that has not yet surfaced. The Employment Rights Act 2025 has raised the compliance bar further.
The HR Doctor reviews employment contracts, identifies gaps, and updates documentation to reflect where the law is now, not where it was when the contracts were written. If a key person handed in their notice tomorrow, we want you to have the tools to protect what you have built.
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