The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

Garden Leave

Garden leave, also known as gardening leave, is a workplace practice that involves requiring employees to stay away from their workplace for a specified period, despite remaining formally employed.

During this time, employees are not expected to perform any work tasks or responsibilities for their employer. Garden leave is typically implemented following an employee's resignation or termination and serves various purposes, including protecting a company's interests, facilitating smooth transitions, and preventing employees from engaging with competitors.

What is garden leave?

Garden leave meaning suggests the employee can essentially tend to enjoy leisure activities, rather than actively engaging in work-related activities. Garden leave serves various purposes, including protecting a company's interests, ensuring a smooth transition, and preventing employees from working with competitors. The specific terms and regulations of garden leave may vary based on employment contracts and regional labor laws.

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Understanding garden leave in UK

Garden leave UK, sometimes referred to as 'gardening leave,' essentially means that the employer instructs the employee to stay away from the workplace during their notice period.

Furthermore, while the employee is on garden leave, the employer is not required to provide any work assignments or duties to the employee for either the entire notice period or part of it.

Putting an employee on garden leave in the UK often involves requesting the employee to:

Abstain from performing any tasks for the company.
Avoid coming to the company premises.
Refrain from using company equipment.
Not engage in business communication with customers, suppliers, or fellow employees.

Is garden leave legal?

Yes, garden leave is generally legal and widely recognized as a legitimate employment practice in many countries, including the United Kingdom and the United States. Garden leave is typically established and governed by employment contracts, company policies, and employment laws.

What are the rights of employees during gardening leave?

Employees on gardening leave retain certain rights and responsibilities during this period. Here are the key rights of employees during gardening leave:

Right to pay
Employment status
Notice period
Restrictions
Confidentiality obligations
Non-compete clauses
Employee benefits
Employment rights
Compliance with terms

Right to pay: Employees are generally entitled to receive their regular salary and benefits as per their employment contract during the gardening leave period. This ensures financial stability during the leave.
Employment status: Employees remain formally employed by the company during gardening leave. This means they continue to have certain employment rights and responsibilities.
Notice period: The notice period specified in the employment contract or agreement still applies. If the gardening leave period extends beyond the notice period, the employee may be free to start a new job unless there are contractual restrictions.
Restrictions: While employees are on gardening leave, they are typically restricted from performing any work for the company or engaging in activities that could be seen as competing with the company's interests. This includes not soliciting clients, customers, or colleagues.
Confidentiality obligations: Employees are expected to adhere to any confidentiality and non-disclosure agreements in place, even during gardening leave. They must continue to protect sensitive company information.
Non-compete clauses: If the employment contract includes non-compete clauses, these restrictions continue to apply during gardening leave. Employees may be prohibited from working for competitors or in specific industries for a defined period.
Employee benefits: Employees may continue to receive employment benefits, such as health insurance, pension contributions, and other benefits, as specified in their employment contract.
Employment rights: Statutory employment rights, such as protection against unfair dismissal, discrimination, and the right to statutory notice, continue to apply during gardening leave.
‍Compliance with terms: Employees are expected to comply with the terms and conditions of their gardening leave as outlined in the employment contract or agreement. Failure to do so can lead to legal consequences.

How does garden leave benefit companies?

Here are benefits for garden leave for companies:

Protecting company interests
Smooth transition
Maintaining client relationships
Non-disparagement
Enforcing non-compete clauses
Preventing poaching
Time for legal resolution
Time for replacement
Mitigating risks
Peace of mind

Protecting company interests: Garden leave allows companies to safeguard their interests by preventing departing employees from immediately joining competitors or taking sensitive company information with them. This helps protect intellectual property, trade secrets, and client relationships.
Smooth transition: It provides a structured transition period during which the departing employee can hand over responsibilities, projects, and client relationships to colleagues or successors. This minimizes disruptions in workflow and ensures continuity.
Maintaining client relationships: Companies can use garden leave to maintain client relationships. If clients are accustomed to working with a specific employee, having that employee accessible during the garden leave period can reassure clients and facilitate a smoother transition.
Non-disparagement: During garden leave, employees are often bound by non-disparagement clauses, which prevent them from making negative comments about the company or its products/services. This helps protect the company's reputation.
Enforcing non-compete clauses: If there are non-compete clauses in employment contracts, garden leave can ensure that employees do not immediately start working for competitors or launching competitive ventures.
Preventing poaching: Garden leave reduces the risk of departing employees recruiting colleagues or subordinates to leave the company and join them in a new venture or at a competitor.
Time for legal resolution: If there are disputes or legal issues related to the departure, garden leave provides a period for the company to address these matters without the employee being present in the workplace.
Time for replacement: Companies can use the garden leave period to search for and hire a suitable replacement for the departing employee, ensuring a seamless transition.
Mitigating risks: By implementing garden leave, companies can mitigate various risks associated with employee departures, including the risk of data theft, breaches of confidentiality, or unfair competition.
Peace of mind: Knowing that departing employees are not actively engaged with competitors or critical company operations can provide peace of mind for employers.

What is the difference between garden leave and a non-compete clause?

The difference between garden leave and a non-compete clause:

Nature
Enforceability
Payment
Scope

Nature: Garden leave is a period of inactivity where the employee stays away from work, while a non-compete clause is a legally binding agreement that restricts the employee's future employment choices.
Enforceability: Non-compete clauses are enforceable through legal action if the employee breaches the agreement. Garden leave is typically not a legally binding contract but rather a company policy.
Payment: Employees on garden leave may continue to receive their regular salary and benefits, while non-compete agreements do not require ongoing payment from the employer.
Scope: Non-compete clauses are more specific and detailed in their restrictions, often specifying the geographic area and scope of prohibited activities.

Garden leave and non-compete clauses serve different purposes. Garden leave is a temporary period of inactivity where the employee remains employed, while a non-compete clause is a contractual agreement that restricts an employee's future employment choices, often with more specific conditions and a longer duration.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.

eNPS:

eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

Promoters
Employees who have responded positively or agreed.
Detractors
Employees who have reacted negatively or disagreed.
Passives
Employees who have stayed neutral with their responses.

What are the pros and cons of garden leave?

The pros of garden leave are:

Protection of company interests
Smooth transition
Client retention
Non-disparagement
Time for legal resolution

Protection of company interests: Garden leave allows companies to protect their interests by preventing departing employees from immediately joining competitors or taking sensitive company information with them.
Smooth transition: It provides a structured transition period during which the departing employee can hand over responsibilities, projects, and client relationships, ensuring continuity and minimizing disruptions.
Client retention: Clients accustomed to working with a specific employee can still have access to them during garden leave, which can reassure clients and facilitate a smoother handover.
Non-disparagement: During garden leave, employees are often bound by non-disparagement clauses, which prevent them from making negative comments about the company or its products/services.
Time for legal resolution: If there are disputes or legal issues related to the departure, garden leave provides a period for the company to address these matters without the employee being present in the workplace.

The cons of garden leave are:

Cost
Employee frustration
Limited income
Impact on career
Effectiveness varies

Cost: One of the primary disadvantages is the cost to the company. Employers are required to continue paying the employee's salary and benefits during the garden leave period, which can be a financial burden.
Employee frustration: Employees on garden leave may feel undervalued, frustrated, or anxious about their future. This can lead to decreased morale and potential legal challenges if they believe the practice is unfair.
Limited income: Employees on garden leave are often restricted from working elsewhere, limiting their ability to earn income during this period.
Impact on career: Depending on the terms of the employment contract, garden leave can impact an employee's ability to start a new job immediately after leaving their current employer.‍
Effectiveness varies: The effectiveness of garden leave in protecting company interests can vary. In some cases, employees may still have access to sensitive information or may not comply with the restrictions.

How to manage garden leave with HRIS?

To manage garden leave:

HRIS configuration
Automated workflows
Notification and documentation
Payroll and benefits integration
Access control
Compliance checks
Reporting and analytics
Documentation storage
Automated communication
Legal consultation integration
Feedback mechanism
Termination process management

HRIS configuration: Ensure that your HRIS is configured to handle garden leave cases. This may involve customizing leave types or employment statuses to include "Garden Leave."
Automated workflows: Create automated workflows within the HRIS for garden leave situations. These workflows can be triggered when an employee resigns or when management decides to place an employee on garden leave.
Notification and documentation: Use the HRIS to automatically notify relevant parties, such as HR, managers, and the employee, when garden leave is initiated. Generate standard garden leave agreements and documentation for electronic signatures.
Payroll and benefits integration: Integrate your HRIS with payroll and benefits systems to ensure that employees on garden leave continue to receive their regular salary and benefits. The system should handle any adjustments to benefits during the leave period.
Access control: Leverage the HRIS to manage access control during garden leave. It should enforce restrictions on the employee's access to company facilities, systems, and data based on the terms of the garden leave agreement.
Compliance checks: Implement compliance checks within the HRIS to ensure that garden leave agreements adhere to employment laws and regulations in your jurisdiction. The system can flag any non-compliance issues for review.
Reporting and analytics: Utilize the reporting and analytics capabilities of the HRIS to track and monitor garden leave cases. Generate reports on the status, duration, and compliance of garden leave periods.
Documentation storage: Safely store all garden leave documentation and records within the HRIS. This ensures easy retrieval for auditing, reference, and legal purposes.
Automated communication: Automate communication with employees on garden leave through the HRIS. Send reminders about their responsibilities and restrictions during the leave period.
Legal consultation integration: If required, integrate legal consultation and guidance into the garden leave management process through the HRIS. This can help ensure that garden leave agreements align with legal requirements.
Feedback mechanism: Consider implementing a feedback mechanism within the HRIS to collect input from employees who have undergone garden leave. This feedback can inform process improvements.‍
Termination process management: If the garden leave period extends beyond the notice period, use the HRIS to manage the termination process seamlessly. This includes finalizing payments and documentation.

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