Summarise with AI
Understanding garden leave
Garden leave is a way for an employer to keep an employee on the books — paid and employed — during their notice period, but away from the workplace and their normal duties. It most often happens after an employee resigns (or is given notice) in a senior, client-facing or sensitive role, where having them keep working until their last day would create risk.
Because the person is still employed, the ordinary rules keep applying: they are paid their normal wages, they keep accruing leave, and they remain bound by their contract — including confidentiality and the duty not to compete while employed.
Why employers use garden leave
Protect the business
- Keep a departing employee away from clients and suppliers
- Limit access to confidential information
- Prevent a smooth handover to a competitor
Keep restraints alive
- The employee stays bound by contract during notice
- Confidentiality and good-faith duties continue
- Buys time before they can join a competitor
Is garden leave paid, and can it be directed?
Yes, garden leave is paid. The employee receives their normal pay and continues to accrue entitlements such as annual leave for the whole period — it is not unpaid leave or annual leave.
Whether an employer can require garden leave usually depends on the employment contract. The safest position is an express garden leave clause that lets the employer direct the employee not to attend work during notice. Without a clear right, directing an employee to stay home can risk a claim that the employer has breached the contract, so many businesses build a garden leave clause into contracts for senior roles.
Get the contract right
Garden leave, notice, and any post-employment restraint should be set out clearly in the employment contract. This is general information, not legal advice — seek advice for senior roles or where a restraint of trade is involved.
Garden leave vs pay in lieu of notice
Both end with the employee leaving, but they work very differently:
- Garden leave: employment continues through the notice period. The employee is paid and stays bound by the contract (confidentiality, no competing), but doesn't work.
- Pay in lieu of notice: employment ends immediately and the notice period is paid as a lump sum. Most contractual obligations end with the employment, so restraints fall away sooner.
For sensitive roles, employers often prefer garden leave precisely because it keeps the employee's obligations alive for longer.
Common garden leave mistakes
No garden leave clause
Directing an employee to stay home without a contractual right can breach the contract. Put an express clause in contracts for senior roles.
Treating it as unpaid or annual leave
Garden leave is paid at normal rates and entitlements keep accruing — it is not a deduction from annual leave.
Forgetting the final pay and records
Keep paying correctly and finalise leave balances, final pay and records as you would for any departing employee.
Key takeaways
- Garden leave keeps an employee paid and employed during notice, but away from work.
- It's paid at normal rates, and entitlements keep accruing.
- An express contract clause is the safest basis for directing it.
- Unlike pay in lieu of notice, contractual restraints continue through the period.
However an employee departs, keeping accurate rosters, leave balances and records matters. RosterElf helps you adjust rosters, track leave and keep clean records through notice periods and offboarding.
