Gardening Leave

What Is Gardening Leave?

A gardening leave refers to the period of time during which an employee stays away from the workplace, or works remotely during the notice period. The employee remains on the payroll and is in the process of terminating their employment, but is neither permitted to go to work nor to commence any other employment during the gardening leave.

Gardening leave, or garden leave, is a term most commonly used in the financial industry in the U.K., Australia, and New Zealand. Massachusetts passed a garden leave clause into law in 2018, making it the first state to do so in the U.S.

While the name gardening leave may sound pleasant — and in fact, an employee may sometimes prefer to serve their notice time relaxing at home rather than being in the workplace — the restrictive nature and negative implications of this leave can make it less than ideal.

The garden leave helps protect an employer's interests when an employee tenders a resignation or is given a dismissal notice.

Understanding Gardening Leaves

Gardening leave is a protectionist measure used by an employer when an employee is terminated or when they tender their resignation. Once in effect, it often prevents the employee from being involved in any work activity for their current employer, and typically restricts them from either taking on another job or working for themselves. An employee is generally likely to spend their time pursuing hobbies such as gardening — hence, the term gardening leave. Salaries and benefits continue until the end of the leave period.

Gardening leave is sometimes considered to be a euphemism for being suspended and can be perceived to have negative connotations such as the employee being unfit for anything other than tending to their garden.

The gardening leave is similar to a non-compete clause. Under this type of clause, an employee promises not to work for their current employer's competition for a specific period of time after their employment period is over.

Reasons for Instigating Gardening Leave

Following the resignation or dismissal of an employee, an employer may decide to place the employee on gardening leave. The primary reason for doing so is to safeguard against possible detrimental actions or behavior that the employee might indulge in during their notice period.

The employer may fear that the employee could become uncooperative, or that they may negatively influence the working environment and other employees. The employer may also prefer that the employee limit contact with clients for fear the employe may persuade clients to follow them to their new employer.

Another reason for implementing a gardening leave is that the employee may have access to up-to-date information that could be beneficial to the employer’s competitors. Placing an employee on gardening leave could help ensure that by the time the employee is contractually free, they would have been out of the loop long enough to reduce any possible threat.

Gardening leave can be an employer’s way of taking the employee off the market for a period of time, which is why some employers may opt for this method, rather than ending the employment abruptly with a cash settlement in lieu of notice.

Rights and Obligations

An employee is entitled to their salary and benefits during gardening leave, but depending on their employment contract, may not be eligible for bonuses or accrual payments.

During a gardening leave, it is typical for an employee to be prevented from accessing the employer’s data and computer system, and to be prohibited from contacting clients, suppliers, or fellow employees. The employee will usually be required to return company property such as laptops, smartphones, or vehicles during this period.

While on gardening leave, the employee is required to be available if the employer requires information, support, or even to resume working. For this reason, an employee should not plan to travel during gardening leave, unless approved by the current employer. An employer may also compel the employee to take any accrued holiday time during the period of gardening leave.

Gardening Leave Clauses

An employer does not need to put a gardening leave clause in a contract during the on-boarding process when a new employee is hired, but they are recommended in certain cases. Some contracts, especially those for senior management and other executives, often come with a well-drafted garden leave clause. If a company decides to put the leave in effect without one, it opens itself up to a breach of contract dispute.

Signing a contractual clause may be problematic in some cases. Employees who don't receive a regular salary, and work on a bonus or commission basis may be able to dispute a clause since their incentive is based on their work activities. These cases may result in disputes — even lawsuits — between both parties.

Gardening Leaves in the U.S.

Massachusetts passed the garden clause provision into law in mid-2018, making it the first state in the United States to give workers paid leave after leaving a job, according to the Associated Press. The new law states employees are entitled to at least 50% of their base salary during the garden leave.