Employment contract with garden leave

Garden leave keeps a departing employee employed, paid and bound by their contract, but away from clients, colleagues and systems until their notice expires, so that by the time they are free to compete their information is stale and their relationships have been handed over. It is the most reliable protection an employer has, and it exists only if the contract provides it, because an employer has no general right to stop an employee working during notice. The contract has to grant the right, define what the employee may do, keep pay and benefits running, and fit the period with the restrictive covenants. I draft that contract for the employer for a fixed fee of £595, delivered in five working days, as a template for the grade.

Who this is for

Employers in England and Wales with staff whose departure to a competitor would cost clients or confidential information, from account managers and salespeople to senior managers and directors.

What matters in a garden leave clause

Why garden leave needs an express clause

An employee has a right to work in some roles and, in all roles, an employer that sends an employee home without a contractual right is in breach, which can release the employee from their covenants and let them leave at once; the contract should therefore contain an express right for the employer to require the employee not to attend work, not to perform duties or only such duties as the employer specifies, and not to contact clients, suppliers or colleagues, for all or part of the notice period, whether notice is given by the employer or the employee, and the clause should be drafted at the start rather than negotiated when the resignation arrives.

What the employee may and may not do on garden leave

The clause should say that the employee remains employed and bound by the contract, including the duty of fidelity, confidentiality and the obligation not to work for anyone else; must not contact clients, prospects, suppliers or colleagues except as the employer directs; must return property, devices and access; may be required to resign directorships and offices; must remain available to answer questions and assist with handover; and must not hold themselves out as having left; the employer should say what the employee may say about their status, because a client told nothing assumes the worst.

Pay, benefits and bonus during the period

Salary and contractual benefits continue during garden leave, and the clause should say so and address bonus and commission: whether the employee is eligible for a bonus for a period on garden leave (usually not for discretionary bonus, under the plan's rules, and yes for commission earned under section 13 of the Employment Rights Act 1996 before the period), the treatment of a company car and other benefits, and pension contributions; a garden leave clause that reduces pay is a breach, and the cost of paying the employee to do nothing is the price of the protection.

Holiday, other work and the duties that continue

The clause should allow the employer to require the employee to take accrued holiday during garden leave on the notice regulation 15 of the Working Time Regulations 1998 requires (or shorter notice where the contract provides), should prohibit any other employment or self-employment during the period, and should preserve the employee's obligations of confidentiality, fidelity and cooperation; the duty of fidelity is what stops the employee preparing to compete while on garden leave, and the clause should restate it.

Garden leave and the restrictive covenants

A court assesses the total restraint on the employee, so the contract should provide that any period spent on garden leave reduces the duration of the post-termination covenants, which makes both the clause and the covenants more likely to be enforced; the covenants then protect the employer after the garden leave ends, with the non-solicitation, non-dealing and non-poaching clauses drafted at a width the role justifies, and the contract should treat the two as one scheme rather than two separate restrictions.

Pay in lieu of notice as the alternative

Where the employer would rather end the employment immediately and pay the notice, the contract should contain a pay in lieu of notice clause stating what is paid (salary only, or benefits as well) and when, so that the termination is lawful and the covenants survive; without the clause, paying in lieu is a breach that may release the employee from the covenants. The contract should give the employer the choice between garden leave and pay in lieu, because the right answer depends on how much the employer needs the employee out of the market, and the written particulars under section 1 of the Employment Rights Act 1996 should state the notice period to which both apply.

What it costs

Employment contract, £595. One template you can reuse for a grade of staff. Five working days.

Staff handbook and core policies, £995. Five working days.

Buying online forms the engagement on payment. The scope is what the employment contracts and handbooks page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A bespoke contract drafted for how you employ people
• Restrictive covenants drafted at a scope a court will uphold
• Confidentiality and intellectual property provisions that put ownership where it belongs
• The statutory particulars, so the document does the job section 1 of the Employment Rights Act 1996 requires it to do
• Flexibility clauses where you genuinely need them, drafted to survive challenge
• Core policies: disciplinary, grievance, sickness absence, equal opportunities, data protection and, increasingly, AI use
• One round of amendments

What is not included

• Acting for employees
• Employment tribunal representation
• Payroll, pensions auto-enrolment and tax
• Immigration and sponsor licence work
• Day to day HR handling, disciplinaries, grievances and redundancy processes

Questions I am often asked

Can we send a resigning employee home for their notice period without a clause?

Not safely. Without a garden leave clause, sending the employee home may be a breach that releases them from their covenants. The contract contains the clause so that the right exists.

Does the employee get paid on garden leave?

They are paid salary and contractual benefits in full. Bonus and commission depend on the plan's rules and the contract, which say what applies during the period.

Can the employee do other work while on garden leave?

They cannot. They remain employed, bound by the duty of fidelity and the contract's prohibition on other work. The clause restates both.

Related guidance and services

• Employment contracts and handbooks, £595, the service this page describes
• Consultancy and contractor agreements, £595
• Settlement agreements for employers, £795
• Employment contract with restrictive covenants
• Employment contract for an account manager

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.