Normally, at least here in the UK, when you leave a business, you provide your employer with a ‘notice’ period and then you work through that notice until your last day. But for some employees, their notice period may be wavered altogether in favour of something called garden leave.
But what exactly is garden leave and how is it applied by businesses? In this article we will look to answer these questions as well as many more.
What does Garden Leave mean in UK Employment Law?
It cease responsibilities of their role and to not make contact with other employees, suppliers, advertisers, clients or customers for the remainder of their employment – all whilst remaining on the company payroll and being paid.
So, it’s like payment in lieu of notice?
While similar, payment in lieu of notice (PILON) and garden leave are not the same. With payment in lieu of notice an employee will not have to work their notice period but will get paid a lump sum at an amount equal to what they would have earned if they had worked it.
This leads to the key difference between the two. An employee who receives payment in lieu of notice is free to go straight into other employment. This is because they have been paid off in full and are no longer technically an employee, whereas someone on garden leave continues to be employed until the end of their notice period.
How long does garden leave last?
In most cases the duration of garden leave tends to reflect that of the notice period stated in the employee’s contract.
During this time, the person on leave is still employed, meaning they get full pay and contractual benefits. But because they are still employed, they are not necessarily permitted to begin new employment during this period.
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What are the pros of garden leave for both employers and employees?
There are many pros to using garden leave for a notice period, including:
Benefits for employers
- It can provide businesses with a helpful handover or transition period in which they can set accounts in order and find a new replacement.
- Since the employee would remain employed until they’ve fulfilled their notice, they’re still under contractual obligations. That includes keeping good faith and confidentiality as well as being available for any necessary business responsibilities.
- Suppose the employee is creating a negative working environment for you, your team or your clients. In that case, it is a good way to swiftly halt any negative impact they may be having on the efficiency or well-being of the organisation.
- Employees when leaving a business will likely use their remaining working hours communicating with recruitment agents and prospective employers. Sometimes, it’s better to give them this time instead of receiving sub-par work as a result of their distraction or busier schedule.
- Employee’s don’t always leave on good terms. They may choose to get lawyers involved or call for a tribunal. Garden leave ensures that the ‘drama’ stays between the business and the employee and doesn’t leak into other work endeavours or become ‘office gossip’.
Benefits for employee’s
- Employees will continue to receive all contractual benefits until the employment is terminated. These can include the use of a company car and other equipment as well as healthcare and pensions.
- As the employee is still an employee, employment law still protects them.
- The employee will have extra time to start job hunting, contacting recruiters and attend interviews which are usually held during working hours.
- The employee will have the free time to upskill and focus on their personal or professional development.
What are the cons of garden leave for both employers and employees?
As with anything in business, not everything is sunshine and roses and there are cons to offering garden leave. These include:
Risks for employer’s
- The cost of keeping an employee on garden leave with no return of investment can be high.
- Garden leave isn’t always enforceable by law. This is especially true if it contradicts or breaches employment rights or the contracted pay conditions of the employee.
- If the employee has skills, powers or client relationships, they will not be around to train or demonstrate how to execute those to the rest of the team or those replacing them.
Risks for employee’s
- If the employee gets a new job offer, their current contract of employment would likely prevent them from taking it.
- Having an extended period away from a working environment can lead to mental health issues.
Who is eligible for garden leave?
Companies typically reserve garden leave for executives or other high-level senior employees that handle confidential company information.
That’s not to say employers can’t use them for all employee contracts but there is seldom the need to offer garden leave to ground level employees.
Can an employee request garden leave?
An employee can request or suggest garden leave, but they will only be entitled to it if stated so in their contract. If it isn’t, the decision to offer it will be at the company’s discretion.
Would an employee still accrue holiday pay while on garden leave?
Yes, they would. The company will have to decide how this is to be paid to the individual and whether to release them from garden leave early to cover the holiday period or offer a lump sum.
Is garden leave the same as a suspension?
No. A suspension happens in select cases, either due to medical/health and safety reasons or as part of a disciplinary procedure. A suspension can be paid or unpaid. Garden leave is always paid, and the employee does not have to have been disciplined for it to be enacted.
Garden leave is a tricky topic to get a grasp of but we hope with a little help from this article you now understand it a little better. Also, feel free to check Papershift’s staff leave planner software to automate and solve the absence tracking and holiday entitlement at your business.
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