Garden leave clause (UK): is yours enforceable?

A garden leave clause lets your employer keep you on full pay but away from work during your notice period. You stay employed, which means you stay bound by your duties, so you cannot begin a competing role yet. In the UK an employer normally needs this written into the contract as an express clause. Without one, imposing garden leave can itself be a breach.

For a senior or specialist employee heading to a competitor, garden leave is how an employer keeps you out of the market for a while without sacking you.

Key Takeaways

• Garden leave keeps you employed and paid but away from work during notice, still bound by your duties.
• An employer generally needs an express garden-leave clause. Without one, a skilled employee may have an implied right to work.
• William Hill v Tucker confirmed an employer cannot always force garden leave where the contract gives it no such right.
• Time spent on garden leave may be set off against a later non-compete, reducing how long that restriction can run.

What does a garden leave clause say?

A garden leave clause suspends your active work during your notice period while keeping the employment relationship alive. You are paid as normal, but you do not come in, you may lose access to systems and clients, and you stay bound by everything the contract requires of a current employee.

In practice it does three things:

• Keeps you employed and paid, on your normal salary and benefits.
• Removes your duties, so you have no work to do and no access to live information.
• Keeps you bound, meaning your duty not to compete and your confidentiality obligations still apply.

The clause usually sits in the termination section, next to the termination clause that sets your notice period, and it almost always works alongside a non-compete clause. Read the three together, because the notice period decides how long garden leave can run and the non-compete decides what happens after it.

Is a garden leave clause enforceable in the UK?

Usually only if it is expressly written in. An employer generally needs an express garden-leave clause to send you home during notice. Without one, a skilled employee may have an implied "right to work", the idea that some employees are entitled to actually do their job, not just be paid.

Where the rule comes from: William Hill v Tucker

This was the issue in William Hill Organisation Ltd v Tucker [1999] ICR 291, CA. The Court of Appeal held that the employer could not force garden leave on an employee where the contract did not give it that right. The lesson is that garden leave is not an automatic employer power. It has to be built into the contract.

A written clause is not the end of it

If you start a new job early, your employer has to ask a court for an injunction, and the court can refuse. In Provident Financial Group plc v Hayward [1989] IRLR 84, CA, it did, because the new business posed no real risk, and it warned that long garden leave is "capable of abuse". The longer the period and the weaker the risk, the less likely a court is to hold you to it.

Garden leave vs a non-compete: how the two fit together

Garden leave and a non-compete both keep you out of the market, so courts look at the total time you are kept out. There is no automatic set-off, but a court can take time already spent on garden leave into account and may shorten, or refuse to enforce, a later non-compete as a result. That is why a set-off written into the contract matters, and why this overlap is part of the wider law on restrictive covenants.

Garden leave is a strange position: you are paid and idle, but frozen. You cannot start a competing job, you cannot use current information, and you are effectively parked until your notice runs out. For most people the pay is welcome, but the freeze on moving can be the real cost. The upside is that garden leave time can eat into a later non-compete. If your contract stops you competing for six months after you leave, and you have spent three months on garden leave, a court may treat much of that restraint as already served.

Take a hypothetical. You resign to join a competitor, and your employer puts you on three months' garden leave, then tries to enforce a further six-month non-compete on top. A court may well knock the garden-leave time off that restriction rather than let the employer stack both. Our guide to restrictive covenants in UK employment contracts explains how courts decide whether the non-compete half holds up at all.

Garden leave clause: a fair version vs an aggressive one

What to check before you sign a garden leave clause

• Insist on full pay and benefits. Garden leave should not be a pay cut. Your salary and benefits should continue as normal.
• Tie it to your notice. Ask that garden leave cannot run longer than your notice period.
• Ask for set-off. Push for garden-leave time to count against any post-termination non-compete, so you are not kept out twice.
• Watch open-ended drafting. Be wary of wording that lets the employer place you on garden leave for an undefined period.
• Look for a PILON clause next to it. A payment in lieu of notice clause lets your employer pay your notice and end your employment straight away instead, so the two clauses give your employer different ways to handle the same notice period.

Once you are actually serving notice, the questions change to pay, holiday, bonus and when you can start your next job. Our guide to garden leave during your notice period covers what happens from the day you are sent home.

If you are unsure how a garden leave clause interacts with a non-compete in your contract, upload it to Ookulli's employment contract review and it will flag how the two fit together, showing which law each legal point rests on.

This page is general information, not legal advice. The right to work and restraint of trade rules described here are English law, and apply in England and Wales; Scotland and Northern Ireland take their own approach. For a high-value or complex situation, speak to a qualified solicitor.