What is garden leave?

Garden leave (sometimes written as "gardening leave") refers to a situation where an employee who is serving their notice period is instructed by their employer not to come into work and is prohibited from working for a competitor during that time, but continues to be paid their full contractual salary. The term comes from the idea that the employee is at home "tending their garden" rather than working. Garden leave must be contractually permitted — the employment contract should contain a garden leave clause giving the employer the right to place the employee on leave during the notice period. Without such a clause, the employer can still pay the employee in lieu of notice (PILON), but garden leave itself requires an express contractual right. During garden leave, the employee remains employed and bound by their contractual duties, including confidentiality obligations and any restrictions on working for competitors. This protects the employer's interests by preventing the employee from taking clients or confidential information to a rival during the transition. The employee continues to accrue holiday during garden leave. Garden leave is often used in combination with post-termination restrictive covenants — however, courts will typically reduce the enforceability of post-termination restrictions to account for time already served on garden leave, to avoid double protection for the employer.