Gardening leave is a business term that is often surrounded by ambiguity but is actually fairly easy to understand and comprehend. When utilised under the right circumstances, it is a tool that can be used by the employer to protect their business interests during the transitional phase of losing an employee.
Still a little unsure about the term garden leave and what it means for the business? Read on to learn more.
A Brief Definition Of The Term Garden Leave
Garden leave, also known as gardening leave, describes a situation in which an employer tells a departing employee that their presence is not needed during their notice period. The instruction to stay away does not affect the employee’s salary, and they will continue to get paid in full until their notice has been completed.
However, employees are not permitted to work for themselves or another company until this period is over. This is where the name garden leave derives from, because the person on gardening leave cannot do much else other than potter around. While they will be paid their full wage, bonuses may be invalidated depending on the specifics of their employment contract.
Other Restrictions In Place During Garden Leave
In addition to being denied access to the office or company premises, employees on gardening leave will be expected to avoid using the business’s physical and intellectual property, including online facilities. Furthermore, it is very likely that there will be strict instructions not to contact former colleagues, although they are expected to remain contactable if any issues arise.
The employee may already have restrictive covenants within their contract. These will normally (amongst other things) prevent the employee from working for a direct competitor for a number of months following departure from the company. This is a tool that employers can use to protect their business interests, and is very common in these situations.
The Incentives For Employers
Protecting the business following an employee’s resignation is the only concern of the employer. While gardening leave does mean that the leaving party is still an employee who should be governed by the terms in their employment contract, garden leave gives the business far greater control over the situation by limiting what the employee can do.
Garden leave arrangements are often used in a bid to:
- Prevent an employee from working for a competitor and taking the company’s innovations to another firm.
- Stop the employee from stealing valuable clients.
- Prevent the threat of a departing employee misusing data or sensitive company information.
- Allow the successor to inherit the role in a quick and stress-free fashion that avoids any confrontation or confusion.
- To maintain a high morale throughout the rest of the team.
Gardening leave is a useful provision to have within an employment contract.
Employers should always consider including such a provision, especially for senior roles or employees who have close relationships with customers.