Gardening leave is colloquially known as paid leave for an employee who has resigned or has been given notice of termination.
What Happens During Gardening Leave?
During the period of gardening leave, the employee is still a part of the company but cannot come to the workplace. The employee’s duties are not performed, unless directed by the employer, and the employee also needs to be ready, open for contact during this period. As they are still an employee, they are bound to the existing conditions of their contract and unlikely able to commence any other forms of employment.
When Should Gardening Leave Be Used on an Employee?
Gardening leave is primarily used for businesses who seek to protect sensitive or confidential information, assets, and client relationships that may be exclusive. Gardening leave allows for changes to the access of confidential information and prevents communication to competitors.
Gardening leave should be used as a precaution in protecting the business’ interests:
- To allow the employee to look for other employment; or
- When disciplinary action is pending.
Benefits of Gardening Leave
As an employer, you don’t want everyone to know your secrets. As an employee, you don’t want to disclose something you weren’t meant to and be sued.
- The employee will still act in accordance with agreed obligations from their contract and in the business’ best interests.
- Such clauses in the employee’s contract will be advantageous for securing business and confidential information from external stakeholders and other employees.
- The employee will not be able to work for competitors or solicit with business clients.
- Employees can still be provided with remuneration for gardening leave and the ability to receive all their entitlements.
How Long Is Gardening Leave?
Gardening leave can be lawfully expressed and agreed to through the employee’s contract. Remember, the employer cannot impose gardening leave on an employee for a long time. Be sure to review the terms in the contract first.
Conclusion
Before the contract is signed by the employee, they need to be fully aware of the implications of gardening leave clauses. Gardening leave is enforced in clauses in the employee’s contract, and these need to be drafted well to prevent employee disputes. If you need any assistance with drafting or enforcing gardening leave clauses, feel free to contact our legal team via the form on this page or call OpenLegal on 1300 337 997
Phil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.
