What is garden leave in the UK? A guide for small businesses + free garden leave letter template
Garden leave is a strategic way of protecting company confidentiality so it’s worth knowing how to apply it — because in certain scenarios, it may be the best option for your small business.
But how do you know when that is?
As a Charlie CIPD-qualified advisor, I’ve reviewed thousands of HR letters and helped managers from all sorts of companies put employees on garden leave.
In this guide, I’ll explain what garden leave is, and how (and when) you might use it at your UK small business.
What is garden leave in the UK?
We’ll start with the basics, so that you understand what gardening leave in the UK means, and how it works.
In some instances, an employee can be told to stay away from work for some or all of their notice period while remaining on full pay.
In the UK, this is known as garden leave, or gardening leave.
Typically, an employer will choose to put a senior employee on garden leave to keep them out of the competitive job market for a set period of time, and protect company confidentiality.
Garden leave can follow a resignation, a dismissal, or being made redundant.
During gardening leave, an employee must not:
- Come onto the work premises
- Carry out any work (from anywhere)
- Communicate with clients or colleagues
Although no work or attendance is required, the employee remains on the payroll throughout all of their garden leave.
When is garden leave used and why?
When someone is leaving to work for a competitor
Garden leave is most commonly applied when someone is leaving to work for a competitor of their current company.
The idea behind gardening leave is that it protects the employer from strategic or confidential information being passed on, as it removes the employee from decision making or future business planning.
Although garden leave is costly to a business, it also mitigates the possible negative impact of an exiting employee (which could come at a bigger cost in the long run). Senior members of a team are therefore much more likely to be put on gardening leave, as they have access to sensitive data and important company contacts.
To protect the working environment
Garden leave may also be used to protect the working environment. If an employee is particularly unhappy after being dismissed, for example, then placing them on gardening leave may reduce the risk of bad feeling.
If an employer suspects that an employee’s dismissal could be problematic for any reason, garden leave can be used to alleviate some of that risk. For this reason, garden leave is often applied after making someone redundant (also known as gardening leave redundancy).
As part of a longer notice period
But garden leave isn’t just for when someone is leaving on bad terms. If both the employer and the employee agree that it makes sense, gardening leave can be negotiated as part of a longer notice period.
But remember…
Whether the reason for garden leave is redundancy, dismissal or resignation, it can only be used if there is a garden leave clause in the signed contract of employment.
Employers who try to impose garden leave without a clause could be in breach of UK employment law, and the employee could claim constructive dismissal. And equally, an employment tribunal could rule that someone who refuses garden leave is in breach of their contract.
How long is garden leave?
In the UK, the length of garden leave varies, as it’s determined by the notice period written into each individual employment contract. Typically, garden leave aligns with the length of the notice period, and is anywhere between one to six months.
Garden leave vs notice period
An employee will usually be placed on garden leave for some or all of their notice period. In most cases, the garden leave matches the length of the notice period.
If an employee has a considerably long notice period (over six months, for example), then it may not be possible to put them on garden leave for all of that time.
Garden leave is designed to protect the needs of the business, but extending it beyond six months could be regarded as detrimental to the employee and their opportunities for future employment, — which could be in breach of employment law.
Gardening leave redundancy
Gardening leave redundancy is when someone is put on garden leave for all of their notice period after being made redundant.
In redundancy situations, garden leave might be used as a strategy to reduce bad feelings in the workplace.
It might also be deemed unfair, unwise or difficult for an employee to carry out their normal duties after being notified of redundancy, so garden leave becomes the only sensible option.
Do you get paid on garden leave?
Employees on garden leave are entitled to their normal full rate of pay and all statutory benefits, like sick leave, parental leave, and protection from discrimination.
They should also continue to receive any contractual benefits like private health insurance.
Do you accrue holiday on garden leave?
Yes, employees accrue holiday while they’re on garden leave. But as their employer, you can request that they take any remaining and accrued holiday during the garden leave period.
That’s sometimes where it gets difficult to calculate what they’re owed, especially if you’ve not kept a clear record or if you have doubts about the amount.
With CharlieHR, you can remove a lot of the admin that comes with this task. First by creating custom leave types such as garden leave, so you can accurately track who is currently off and for how long.
Second, by automatically getting the calculation for the leftover holidays your people are owed.
Can you work on garden leave?
In short, no. An employee can only work once garden leave has ended.
When an employee is placed on garden leave, they cannot undertake any of their usual work duties, communicate with colleagues or clients, or come into the workplace — unless you, as their employer, specifically request their assistance.
Equally, they cannot work for anyone else or in a self-employed capacity during garden leave.
Small businesses' concerns around garden leave
Putting someone on garden leave is a strategic decision made under particular circumstances, and most small business owners have no prior experience with it.
For that reason, you might be worried about:
- HR compliance and legal compliance - the legal implications and compliance requirements associated with garden leave. How do you ensure the legality and enforceability of the garden leave clauses in your employment contracts?
- Protecting company interests - such as safeguarding sensitive information, preventing an employee from joining a competitor immediately, or maintaining client relationships. How do you draft effective garden leave clauses that serve these purposes without being overly restrictive?
- Employee relations - garden leave can strain the employer-employee relationship. How do you communicate and implement garden leave in a way that minimises negative impacts on morale and maintains a positive workplace culture?
- Duration and terms - the appropriate duration of garden leave and establishing clear terms. How long should an employee be on garden leave and what conditions should be in place?
- Mitigating legal risks - such as potential disputes or legal challenges from departing employees. How do you minimise the risks?
- Industry standards - benchmarking your own garden leave policy against industry standards. How do you know what other companies in the same or similar industries are doing?
- Communication - managing the departing employee and the rest of the team. How do you maintain transparency and appear professional?
- Employee transition planning - developing effective plans for the transition of work and responsibilities during the garden leave period. How do you ensure smooth handover without disruption to business operations?
- Adapting to changing dynamics - new norms like remote working may mean making policy adjustments. How do you adapt your garden leave policy to accommodate evolving work practices?
Addressing these concerns starts with getting the right advice – think about what consequences this could have on your company if you make a mistake. If you want to find out more about garden leave and how to implement it at your business, learn more with our HR advice experts.
How to put an employee on garden leave (sending a garden leave letter)
As with anything contractual and bound to UK employment law, it’s vital that the employer puts confirmation of an employee’s garden leave in writing.
If you have a garden leave clause written into your employee’s contract, you can notify them that you’re putting them on garden leave as soon as they’ve resigned with notice, or have been dismissed with notice.
And the best way to do that is with a garden leave letter.
A garden leave notice letter informs the employee that:
- You’ve accepted their resignation or they’ve been dismissed with notice
- You’re putting them on garden leave from a specific date
The letter then goes on to outline the length and conditions of the garden leave, and requests that the employee reply in writing to acknowledge and accept the terms.
Garden leave letter template
We advise and support new and small businesses every day at Charlie, so we understand that putting someone on garden leave is not always easy or straightforward.
For that reason, I’ve included a garden leave letter example for you in our free garden leave letter template.
The wording in the garden leave letter template is compliant with UK employment law, so you can feel confident that you’re giving your employee the correct instructions and information about being placed on garden leave.
The garden leave letter template is easy to edit — all you need to do is replace the red text with your own wording.
What happens after garden leave?
Once your employee has completed their time in garden leave, they simply will leave the company as if they had handed in their resignation.
To comply with UK law and make sure they don’t get access to information they’re not entitled to anymore, you then need to offboard your team members thoroughly.
This can be done easily and without any item missed by using CharlieHR. Our offboarding feature allows you to seamlessly offboard your team members, automatically calculate their remaining holiday allowance, and make sure they remain inactive in your payroll.
When an employee is offboarded, their account is archived rather than completely deleted. So you’re always able to view their profile and reactivate it if necessary.
We hope you've managed to understand a bit more about garden leave, but if you need more information, you can check out our other guides and templates below.
