Read more articles in: Amanda Hyam, Blog, Employment Law

The pros and cons of gardening leave: Is it beneficial for my business?

Employees may leave their role in your company in different ways, this may be through redundancy, dismissal or resignation.

Something you can consider upon ratifying an employee’s departure from your company is placing them on gardening leave for the duration of their notice period.

This is a scenario where you tell the employee to stay away from the business. This could be not coming to the office, working at home or not performing any duties until they officially leave the company.

It is a decision that requires thoughtful consideration, and you need to be mindful on how this impacts your business.

What are the positive aspects of gardening leave?

For employers, it’s a fine balancing act, deciding if gardening leave is beneficial for the business, your team and the employee leaving the company. There are positive and negative effects of gardening leave.

There are plenty of positives for placing employees on gardening leave including retaining control of their responsibilities. You ultimately decide if they work or not in this period and by law, they are required to still follow your orders.

In addition to this, retaining this control means you can also protect company information such as future plans and client details as you can ensure the employee doesn’t work and returns all company equipment.

Other benefits of gardening leave include allowing new hires to adjust to the role, protect existing staff, prevent the employee from starting a new role elsewhere and ensure the employee follows what they are contractually obliged to do until their notice period finishes.

What are the negative aspects of gardening leave?

While there are benefits to gardening leave, there are negative aspects to consider, and these are centred around costs and legal concerns.

Should you place an employee on gardening leave upon starting their notice period, they are entitled to full pay whether they are working or not. Further costs follows as employees are also entitled to other contractual benefits.

Costs can add up very quickly especially if you’ve brought in that employee’s replacement during the gardening leave period.

There are also legal risks to be mindful of. You should be including the possibility of gardening leave in your employee contracts.

If you place an employee on gardening leave and their pay is based on commissions and bonuses or need to work to maintain a certain professional skill level, you could be in breach of contract.

In this instance, your employee may choose to resign and file a claim for constructive dismissal. For employers, this would remove the gardening leave rights and potentially other aspects of the employee contracts and increase costs further should formal legal proceedings take place.

Is placing employees on gardening leave the right approach to take?

As noted above, there is plenty to consider, and you need to decide what is best for your company. Given the different avenues employees exit a company, you need to think about those circumstances.

Before deciding to place staff on gardening leave whether that is to align with your redundancy plans or an employee resigning, you should speak with employment law experts.

They can guide you, offering tailored advice and support by helping you examine the employee’s circumstances including the importance of their role, look at employee contracts and the costs involved.

If you need support with gardening leave matters or other employment law concerns, get in touch with our team.

Amanda Hyam

Head of Dispute Resolution and Employment

I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years. I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.