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Garden leave is a tool employers can use to keep an employee who is serving their notice period out of the business. It’s the employer’s choice whether to place an employee on garden leave, and it can apply for some or all of the notice period.
The key point to remember is that, unlike PILON, the employment will continue and the employer must carry on paying the employee their normal salary throughout the notice/garden leave period.
The advantages of using garden leave are that the employer can prevent the employee from starting new employment sooner, potentially with a competitor. At the same time, the employee can be excluded from the workplace and therefore having access to confidential information, clients and even other employees. Particularly in acrimonious situations, it can be a helpful tool.
Employers should ensure that they have the contractual right to place an employee on garden leave before doing so, to avoid the risk of claims for constructive unfair dismissal and breach of contract.
Bear in mind that holiday will continue to accrue during garden leave. In many situations, an employer will be able to require the employee to take any accrued outstanding holiday during garden leave, avoiding the need to pay it out in lieu on termination. You need to ensure your garden leave or holiday contractual wording cover this, or that the correct amount of notice for taking holiday is given.
You should also check your contract wording carefully to see what other terms are affected by garden leave. For example, any post termination restrictions will usually be reduced by the amount of time the employee spends on garden leave.