What Is Gardening Leave? Understanding Its Purpose and Benefits

what is gardening leave

Gardening leave, sometimes called garden leave, is a period when an employee who is leaving their job is still officially employed but doesn’t have to go to work or do any job tasks. This usually happens during the notice period after someone resigns or is let go.

The main idea is to protect the company’s important information, customer relationships, and other sensitive business matters.

Why Gardening Leave is Important

The main goal of gardening leave is to protect the employer’s interests. By keeping the employee away from the office, the company can make sure that no confidential information is leaked to competitors, client relationships are maintained, and other sensitive data is kept safe.

During this time, the employee is usually not allowed to start a new job or work for a competitor, which helps to prevent any conflicts of interest.

How Gardening Leave Works and Its Benefits

To make gardening leave work smoothly, it should be mentioned in the employment contract. This part of the contract should explain when and how an employee can be put on gardening leave, including any restrictions and obligations.

Here are some key benefits of having a gardening leave clause:

  • Protection of Confidential Information
    It stops the employee from sharing sensitive company information with competitors.
  • Control of Business Resources
    The company can manage and limit access to important business information and systems.
  • Transition Period
    It gives the company time to adjust to the employee’s departure and organise the handover of responsibilities.
  • Non-Compete Enforcement
    Ensures that the employee cannot join a competitor or engage in competing activities during this period.
  • Maintaining Good Relations
    This can lead to a more friendly and less contentious separation, avoiding financial disputes or hostility.

What Employees Need to Do During Gardening Leave

When on gardening leave, employees have certain responsibilities:

  1. Follow Contract Terms
    They must adhere to the terms specified in their employment agreement.
  2. Be Available
    Employees should be reachable during the notice period in case the company needs to contact them.
  3. Work Restrictions
    They cannot work for another employer during this time.
  4. Receive Regular Pay
    Employees continue to get their normal salary, ensuring they are financially stable.
  5. Leave Entitlements
    They might still be eligible for holiday pay or sick leave, depending on the contract.
  6. Duration Limits
    Gardening leave cannot last indefinitely or for an excessively long period.
  7. Need for Consent
    Employees cannot be put on gardening leave unless it is agreed upon in the contract.

Legal Aspects

In Australia, gardening leave is legal as long as it is included in the employment contract and follows employment law guidelines. Employers can enforce gardening leave only if it is specified in the contract.

If they try to enforce it without this provision, they could face legal problems. For example, in a notable case involving Grace Worldwide (Australia) Pty Limited and Stephen Alves, the Supreme Court of NSW looked into whether an employer could require an employee to take gardening leave, highlighting the necessity of a clear contractual agreement.

Real-Life Examples

There have been several high-profile cases that show how important garden leave clauses can be. For instance, in the case of Ron Dennis vs McLaren F1 team, the court enforced the garden leave clause to protect the company’s interests.

This shows how these provisions can help during critical transitions in a business. Garden leave is a useful tool for companies to protect their business interests when an employee is leaving.

Both employers and employees need to understand what garden leave involves, its benefits, and the legal requirements. This ensures a smooth and compliant transition process.

Employers should seek legal advice or consult with employment experts to make sure garden leave provisions are properly included and enforced in their employment contracts.

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