Garden leave: what it means, what you are paid, and what you can do

Garden leave is your notice period spent away from work, on full pay, still employed. It is common when someone is leaving for a competitor or when an exit is being negotiated, and it changes less than people expect: the contract keeps running until the last day of notice, with everything that comes with it.

What is garden leave?

GOV.UK describes it in three sentences, and they are the whole of the official definition:

Three things follow from that. You are still an employee, so the employment has not ended and the notice period is still running. You are not working, or you are working somewhere other than your normal place. And your pay and contractual benefits — salary, car allowance, health cover, pension contributions — carry on as they would if you were at your desk.

“Garden leave” and “gardening leave” mean the same thing. Neither phrase appears in the Employment Rights Act 1996; garden leave is an arrangement within the contract, not a separate statutory status. That is why the details turn on what your contract says.

What you are paid on garden leave

Normal pay. The GOV.UK wording is “the same pay and contractual benefits”, and that is the starting point for any check: if your payslip during garden leave is lower than it would have been at work, ask why in writing.

There is also a statutory floor. For the minimum notice set by section 86 of the Employment Rights Act 1996 — one week per complete year of service from two years, up to twelve — section 88 protects your pay in exactly the garden leave situation:

Paragraph (a) is the garden leave case: ready and willing to work, but given no work. There is one catch. Section 87(4) switches these statutory protections off where your contractual notice is at least a week longer than the statutory minimum:

In practice that matters less than it sounds for garden leave, because your contract still requires your employer to pay you while it runs. Where it matters is if you fall sick or go on family leave during a long contractual notice period; then the contract, not section 88, decides what you are paid. Work out your statutory notice.

Bonus, commission and benefits

Whether a bonus or commission is paid during garden leave depends on how the scheme is written. GOV.UK says, of notice periods generally, that you are entitled to bonuses and commission during notice unless your contract states otherwise. Some schemes say that someone under notice is not eligible, so read the rules. Benefits in kind, such as a car or medical cover, normally continue because they are contractual.

Garden leave or payment in lieu of notice?

The two are often confused, because both mean you stop going to work. The difference is whether the employment is still running.

Garden leave keeps a departing employee away from clients, colleagues and information for the length of the notice, while keeping them bound by the contract; PILON ends the relationship at once. Which one it can use depends on the contract: GOV.UK says you can only get payment in lieu if it is in your contract or you agree to it. Payment in lieu of notice, in full.

Holiday during garden leave

Because you are still employed, your holiday entitlement keeps building up through garden leave. Your employer can, however, tell you to use it during that time, as long as it gives enough notice:

So to make you take five days of holiday during garden leave, an employer has to give you at least ten days’ notice. Two qualifications: the regulation can be varied by a “relevant agreement”, which can include a written agreement between you and your employer, and the rule applies to the statutory leave in regulations 13, 13A and 15B rather than any extra contractual holiday.

If you are leaving with a settlement agreement, holiday is usually dealt with as a line of its own: either taken before the termination date or paid out with your final salary. Check which, and check the number of days. The clauses in a settlement agreement.

Can you start a new job on garden leave?

Not without your employer’s agreement while the contract is running. Garden leave exists precisely so that you remain employed, and bound by your contract’s terms, until the notice ends. Starting work for someone else in that time risks a breach of contract claim.

The practical route is to ask. If a new employer wants you sooner, write to your current employer asking whether it will agree an earlier termination date, and on what terms — it may be glad to stop paying you. Get the answer in writing before you start.

Garden leave and restrictive covenants

Garden leave runs during the notice period; restrictive covenants usually run after the employment ends. GOV.UK puts the second kind plainly:

The two can add up. Six months of garden leave followed by a six-month non-compete keeps you out of your sector for a year. Some contracts say time on garden leave is deducted from the covenant; others say nothing. This page does not say how a court would treat a particular covenant — that turns on the wording, and on case law we have not reproduced here — but it is exactly the kind of point to raise with the adviser before you sign anything. Restrictive covenants and non-competes.

Garden leave in a settlement agreement

Garden leave and settlement agreements often arrive together. An employer that wants someone to leave may put them on garden leave while the terms are negotiated, and the settlement agreement then sets the termination date at the end of that period.

When it does, check four things. The termination date, because it decides when your notice ends and starts the clock on any tribunal time limit. The pay until then, which should be your normal salary and benefits. The holiday line, which should say whether leave is taken or paid. And whether any part of the payment is described as payment in lieu of notice, because that is taxed as earnings and sits outside the £30,000 threshold. How a settlement is taxed.

A settlement agreement only binds you if the conditions in section 203 of the Employment Rights Act 1996 are met, including advice from a relevant independent adviser. Being on garden leave does not change that, and it does not shorten the time you should be given to consider the offer: the Acas Code recommends at least 10 days for the written terms. How long you have to sign.

If you were put on garden leave without warning

Being sent home on full pay is not, by itself, a dismissal; your employment continues. If it comes with a suggestion that you leave on agreed terms, the conversation may be a protected one, and what is said in it may not be usable in an ordinary unfair dismissal claim. Protected conversations. Keep a dated note of what was said and what you were told about pay.

Common questions