Gardening leave does not refer to leave granted by your employer to tend to your garden. Instead, gardening leave is often outlined in employment contracts and enforceable when an employee is either terminated or resigns, and is required by the employer to stay away from their workplace. This period of time gives the employer an opportunity to remove the terminated employee’s access to confidential business information.
Key points to remember about gardening leave:
- It is a precautionary measure taken by an employer to protect their businesses confidential information.
- It outlines a period of time where an employee will not be able to work with sensitive information or from the office.
- It allows an employee to still be paid whilst in this notice period.
What is garden leave?
Gardeners leave or gardening leave is the practice where an employee (either by termination or resignation) remains on the payroll but must stay away from the premises during the notice period after an employee leaves their job. Gardening leave is a precautionary measure used by an employer to protect their business and its confidential information from being used by the employee in their termination notice period. Gardeners leave in Australia allows the employee to work from home or another location if determined in both the contract and by the employer. Otherwise, the employee will not work but will still be entitled to their normal wage.
Why is it called gardening leave?
It is referred to as gardening leave in Australia as the employee cannot take up work whilst still on the payroll. Therefore, if not working from home or another location, the employee has time to take up hobbies (such as gardening) whilst getting paid.
Can I take a holiday whilst on gardening leave?
Although an employee has time to take up hobbies whilst on garden leave, they must check their employment contract for permission to go on a holiday whilst on gardening leave. If their contract allows them to go on a holiday, they must remain contactable for their employer, in case there are any issues with the transition period.
What does this mean for employers?
Gardening leave allows an employer to make necessary arrangements to change or remove the access by the employee to confidential information such as financial assets or client lists. This will ensure that the employer can take accurate measures to protect their interests during the notice period. Gardening clauses are often accompanied by restraint of trade clauses in the employment contract, so as to reduce the risk of the former employee leaking sensitive information to other competing companies. If there is no restraint of trade clause, and the employer has modified the confidential information, then there will be no detriment to the business as the former employee will not be able to spread any correct information.
What are the advantages of a gardening leave clause?
Gardening leave clauses are essential for employment relationships, especially when signing on executives or managers who have access to very sensitive information. Gardening leave clauses:
- Protect the business interests of the employer,
- Allows the employer to correctly manage their confidential information by providing a notice period to change any prior knowledge,
- Creates a period of time (outlined in the contract) in which the former employee is not allowed to work for another competing business,
- Allows for the employment relationship to separate without creating any financial hardship for either party in the event of a hostile situation.
What can and cannot employees do whilst on this leave?
Employees, as outlined by their contract, will likely be subject to the following obligations:
- Not attending the workplace,
- Cannot continue any activities that were their responsibility previously,
- Remain available to their employer for any issues regarding transitions,
- Abide by the terms and agreements of the employment contract,
- Prohibited from engaging in any other forms of employment until the notice period is over/for the duration of the leave,
- Prohibited from taking a position at a competing company until the notice period is over/for the duration of the leave.
Despite these obligations, employees will obtain the following benefits whilst on garden leave if outlined in their employment contract:
- Ongoing benefits such as holiday pay and sick leave, and
- The loss of commissions that may have accrued during the notice period.
Should I have a gardening leave clause in my employment contract?
As an employer, including a gardening leave clause in your employment contracts is essential to ensure that confidential or sensitive business information will not be used to the detriment of the business. The clause should have all of the relevant terms listed (see above) and detailed to a great extent so it remains enforceable against an employee and reduces the risk of any legal issues.
If you require further assistance with anything related to gardening leave, you should seek legal advice. Legal Kitz can direct you with your next step, whether you need assistance drafting a gardening leave clause, or if you wish to see if the clause outlined in your employment contract is enforceable. Alternatively, our sister business Business Kitz offers employment bundles that are both easy to use and comply with current Fair Work regulations. Click here to find out more, or you can book a free 30-minute consultation via our website now.