What is garden leave and does your business need it? + free template
If you’ve found your way to this blog article, you’re likely in a difficult situation.
An important member of your team is leaving (possibly to go and work for a competitor), and you’re probably feeling conflicted about the next best course of action. But garden leave is a strategic way of protecting company confidentiality so it’s worth knowing when and how to apply it — because it may be the best option for your business.
You might also be worried about the cost of using garden leave (you’ll be paying someone for not working, after all), and about the rules and regulations you need to understand and ensure you comply with. Can the employee still take holiday? Are they paid a regular salary? How long should the garden leave be? etc. etc.
Putting an employee on garden leave is not an easy decision, but with reliable and expert support you’ll be able to navigate your way through it with as few bumps in the road as possible.
As one of Charlie’s CIPD-qualified advisors, I support small businesses by making sure they comply with UK employment law requirements. I’ve reviewed thousands of HR letters and contracts during my career, and helped many managers put employees on garden leave.
In this article, I’ll clearly outline the recommendations for garden leave based on UK employment law, so that you can make a confident and informed decision about your next best step.
We’ll start with the basics, so that you understand exactly what garden leave is and how it works, and also provide you with a garden leave letter template that you can quickly adapt and send to your employee.
[If you already understand the garden leave process then you can download our free garden leave letter template now.]
What is garden leave?
After resigning or having been dismissed or made redundant, an employee may be told to stay away from work for some or all of their notice period while remaining on full pay. This is known as garden — or gardening — leave.
Typically, an employer chooses to put a senior employee on garden leave to keep them out of the competitive job market for a set period of time, and to protect company confidentiality.
During garden 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 their garden leave.
When is garden leave used and why?
Garden leave is most commonly applied when someone is leaving to work for a competitor of their current company. It’s designed to protect the employer from strategic or confidential information being passed on, and removes the employee from any involvement in decision making or future business planning.
So 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). For this reason, senior members of the team are more likely to be put on garden leave, as they have access to important information, sensitive data and company contacts.
As well as protecting the business from information being passed on, garden leave can also be used to protect company culture. For example, an employee might be particularly unhappy after being dismissed, so placing them on garden leave reduces the risk of bad feeling spreading throughout the workplace.
If the employer suspects that an employee’s dismissal could be problematic then applying garden leave mitigates that risk. Garden leave can therefore be applied after making someone redundant (find out more on our redundancy letter templates here).
Garden leave isn’t only an option when someone is leaving on bad terms, however. If both the employer and the employee agree, then garden leave can be negotiated as part of a long notice period.
Whether the driving factor for placing an employee on garden leave is redundancy, dismissal or resignation, it can only be used if a garden leave clause is in their 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. Equally, an employment tribunal could rule that an employee who refuses garden leave is in breach of their contract.
How long is garden leave?
The length of garden leave varies from person to person, as it is determined by the notice period written into their employment contract. Typically, garden leave aligns with the length of the notice period, and is anywhere between one to six months.
Garden leave is designed to protect the needs of the business, but going over a length of six months could be regarded as detrimental to the employee and their opportunities for future employment — and runs the risk of breaching employment law.
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 their garden leave period.
Can you work on garden leave?
In short, no. An employee can only work when their garden leave has come to an end.
When you place an employee on garden leave they cannot undertake any of their usual work duties, communicate with colleagues or clients, or come into the workplace — unless you specifically request their assistance.
Equally, an employee cannot work for anyone else or in a self-employed capacity during garden leave.
Garden leave vs notice period
An employee is typically placed on garden leave for the length of their notice period.
If an employee has a considerably long notice period, however — over six months, for example — then it may not be possible to put them on garden leave for that length of time. Garden leave is supposed to protect your business’ interests, but if someone were to make a claim against you then a court is likely to rule that garden leave lasting over six months is excessive, and more than you need for business protection.
A lengthy period of garden leave is probably also going to be regarded as detrimental to the employee in question.
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 put confirmation of an employee’s garden leave in writing.
If you have a garden leave clause written into your employee’s contract, then you can notify them that you’re putting them on garden leave as soon as they’ve resigned with notice, or 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
- 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.
Putting someone on garden leave is a strategic decision made under very particular circumstances, so most small businesses don’t have any prior experience of it. We understand this as we advise and support new and small businesses every day at Charlie, and appreciate that this is typically an unexpected and difficult situation. For that reason, we’ve included a garden leave letter example in our free garden leave letter template.
The wording in our 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 going on garden leave. It’s easy to edit — all you need to do is replace the red text with your own wording.
How Charlie can help you successfully manage garden leave
Hopefully you’re now feeling better informed about garden leave, and when and how to use it.
But putting someone on garden leave is still a big and costly decision whatever way you look at it, and there are many HR laws and regulations you need to comply with. Plus, you still have a business to run, and your other team members may require additional support during this time. For these reasons and more, many small businesses seek out expert advice to help them manage garden leave and successfully navigate through it.
And Charlie is one of the experts.
We have two main ways we support small businesses to apply and manage garden leave: through our HR software and through our HR Advice service — both of which are extremely cost effective when compared to hiring a full-time HR manager or a solicitor.
Charlie’s HR Advice
Our HR Advice is a bespoke support service that helps small companies and startups by providing them with one-to-one support from industry experts whenever, and as often, as they need it.
With HR advice from Charlie, a dedicated advisor will:
- Draft you a garden leave and a notice period policy
- Ensure you include the right information about these policies in your employment contracts
- Help you decide whether an employee needs to go on garden leave or not
- Help you write a garden leave letter that is bespoke to your business.
You can book a free and informal call with one of our advisors to find out more about HR Advice or any of the services listed above:
Charlie’s HR software
Our software is designed to make HR effortless for small businesses. With it, you can manage onboarding, performance reviews, perks and benefits and much more. But in terms of garden leave, it removes so much of the admin and faff, and helps you with cross-team communication.
The two main software features that will help you successfully manage garden leave are custom leave types and offboarding.
- Custom leave types
You can create custom leave types in Charlie, so you can create one for garden leave. Everyone in the business can then see, via their Charlie dashboard, if someone in the team is off on garden leave.
This gives the rest of your team visibility on why they are not working, cutting down on communication admin for you, and demonstrating that you’re a transparent employer.
In Charlie, you can offboard an employee as soon as you know their last day, and automatically calculate their remaining holiday allowance.
At this point, they will no longer be counted towards future invoices, and will be marked as inactive, and unable to log into Charlie after their offboarding date.
When an employee is offboarded, their account is archived rather than completely deleted. However, you are always able to view their profile, and can reactivate it if necessary.
You can try our software for free to see how easy it is!
With Charlie’s HR software and HR Advice service, every element of applying and managing garden leave is easier, faster and requires far less worry and faff:
- You’ll have the peace of mind of always being compliant
- You’ll access employment law advice for a fraction of the cost of hiring a lawyer
- All the offboarding admin will be automated, saving you so much time and hassle
- Your team will have more visibility about who is on garden leave and for how long.
Putting someone in your team on garden leave is never going to be much fun for anyone, but with Charlie’s support there will be far fewer bumps along the way.
Want to find more HR templates like this one?