Gardening Leave – What Is It And Who Can Take It?

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Home > Blog > Gardening Leave – What Is It And Who Can Take It?

If an employee tenders notice of their resignation or their employer terminates their employment, they may be put on gardening leave. Gardening leave is a directive to stay away from work for the remainder of their notice period.

What are the benefits of gardening leave?

For some departing employees, gardening leave will be welcomed as it can offer paid time off from work before starting a new job.

For employers, putting a staff member on gardening leave before they commence their new employment elsewhere can provide the organisation with an added layer of protection against employees who may use their notice period to garner information about upcoming projects, or attempt to take templates or precedents with them before they depart. Employees on gardening leave are still bound by their contractual obligations to maintain confidentiality.

What are the downsides of gardening leave?

For employees who are placed on gardening leave when they thought they would be working out their notice period, it can be a jarring experience – particularly if they had close friendships with their colleagues or they have not had the chance to tie up loose ends or handover their current workload.

Employees on gardening leave usually cannot commence employment with another organisation, which also means they are out of the habit of going to work each day and maintaining their skills and expertise.

For employers, having to place an employee on gardening leave can mean handover periods are lost and institutional knowledge disappears before it can be recorded or passed on.

What complications can arise when an employee is put on gardening leave?

There have been instances where an employee has been able to establish that their contract was terminated prematurely and therefore able to make a claim for loss and damages or commence working at their new organisation immediately.

One particular instance saw an employee placed on gardening leave when his contract did not allow for it. He was directed to stay away from his workplace and to return his company car and devices. During his period of gardening leave the former employee commenced a job at a competitor, after which his former employer accused him of breaching their employment agreement.

The former employee argued that as his ex-employer had breached its contract, he was free and able to be employed elsewhere. The Court did not agree with this point and held that his agreement contained an implied term relating to gardening leave, which indicated that an employee in a particular position in the organisation (in this case, a National Sales Manager) working out their notice period could be detrimental to the organisation.

The former employee also argued that their former employer had breached the employment contract by demanding the return of the company car and devices. This was accepted by the Court which agreed that, in doing so, it had reduced the employee’s remuneration which in turn amounted to a fundamental breach of the employment contract.

It was found that when the employee entered into an agreement with his new employer, he accepted this breach and subsequently brought the contract to an end. Ultimately, the employer’s application was dismissed.

How can employees protect themselves against complicated gardening leave situations?

It is crucial that employees who are put on gardening leave are made aware of their rights so that there is no confusion as to the status of their employment.

Unlike the case above, implied terms relating to gardening leave will not exist in every employment contract. Typically, employees who are in more senior roles or possess a higher level of responsibility in the organisation will be able to be put on gardening leave without an express term, whereas more junior members of staff cannot, unless their agreement contains a specific provision.

Employers should review their employment contracts to ensure there is no ambiguity around this point, and employees who have been placed on gardening leave should check to see whether their contract does in fact contain a gardening leave provision.

Finally, employees placed on gardening leave should not accept an automatic reduction in pay or benefits simply because they have been placed on gardening leave. Employers must fulfil their contractual obligations, including where company-owned cars or devices are part of the employee’s remuneration package.

If you have been placed on gardening leave but have had your remuneration reduced or benefits removed, seek immediate advice from a human resources consultant or employment lawyer.