By Kelly Godfrey

For some employees, gardening leave conjures up ideas of being paid to spend time in the garden. It is an often-misunderstood concept, with many employees who are placed on gardening leave unclear of their entitlements.

What is gardening leave?

Often in employment contracts, an employer will reserve the right to not terminate an employee’s employment immediately by the payment of notice pay in lieu of notice. Employment contracts often grant an employer the right to also have an employee work their notice period or not undertake work but still be paid their normal remuneration for that period, i.e. take gardening leave. An employer can use gardening leave when there is an entitlement to do so under the employee’s contract or another industrial instrument. It can be used where the employment termination is initiated by the employer or the employee.

What is the purpose of gardening leave?

Gardening leave seeks to provide an employer’s business with greater protection. This is because the employee remains employed during the gardening leave period; therefore, they have more comprehensive obligations to fulfil than if they were in a post-employment arrangement.

The effective use of gardening leave and post-employment restraints can help an employer to protect its legitimate business interests.

On gardening leave, an employee cannot commence employment with a competitor, cannot undertake work for the employer’s customers and clients, and cannot share intellectual property or confidential information. As the employee remains employed, the employer can exercise a greater level of control.

While some employers use gardening leave periods to extend post-employment contractual restraints, some courts will count those periods towards restraints served if the employee has had no contact with staff, clients or customers during the gardening leave.