Reading time: 4 minutes

Advantages for Employers

There are a number of advantages of having a gardening leave clause to protect your business’ interests. As the employee is still bound to the terms of an employment contract, they are bound by the contractual obligations of the agreement, including: 

  • acting in the best interests of the employer; 
  • protecting the business’ confidential information; and 
  • prohibited from working for another organisation. 

Another advantage is that employees are not physically present in the workplace. This absence helps protect the employee from soliciting clients or encouraging other employees to leave the organisation.

For businesses that deal with confidential information or employ staff who hold relationships with external stakeholders including clients and suppliers, gardening leave addresses the potential for departing employees to take this information with them. Without such a clause, departing employees can potentially approach existing competitors or use confidential information to the detriment of the business.

Obligations for Employees on Gardening Leave

If you are on gardening leave, you must adhere to the terms set out by your employer and employment agreement. Terms may include:

  • not attending work or performing work functions;
  • abiding by the existing terms of your employment agreement;
  • being available to return to work or being contactable during the notice period; and
  • not working for another employer during the notice period.

Note that employers may place you on gardening leave to grant you time to find a new employer. You should seek clarification from your employer regarding the terms of the leave period if you are unsure, especially if you are pending disciplinary action. Employers cannot place you on gardening leave indefinitely or for an extended period.

Courts have also found in certain limited circumstances that there is an implied duty for the employer to provide an employee with work where their remuneration depends on commission, or ongoing employment is required to maintain public reputation (e.g. entertainers, presenters) or skill (e.g. athletes, surgeons). However, employers are only obliged to provide work if it is set out in the employment contract. Otherwise, it is lawful for an employer to direct you to go on gardening leave.

Key Takeaways

As an employer, a gardening leave clause can protect your business’ interests. Although employers could use a post-employment restraint clause to protect the business’ confidential information and relationships, they can be costly to enforce compared to a gardening leave clause. While an employee is on gardening leave, they are still entitled to the same benefits as if the employee was still working, including remuneration. Employers should ensure they have the right to place an employee on gardening leave. Otherwise, it could be treated as being constructively dismissed and give rise to wrongful dismissal. If you have any questions about how gardening leave would apply to your organisation, or are on gardening leave and want to understand your rights, get in touch with our employment lawyers on 1300 544 755. 


Legal 101 for SaaS Companies

Thursday 22 July | 11:00 - 11:45am

Understand the contracts you need for your SaaS business with our free SaaS legal essentials webinar.
Register Now

Construction Contract Essentials

Thursday 12 August | 11:00 - 11:45am

Understand how construction contracts are drafted and how to protect your construction business.
Register Now

Startup 101: Understanding Cap Tables and ESOPs

Thursday 19 August | 11:00 - 11:45am

Cap tables and employee share option plans are essential for fast-growing startups. Learn more with this free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards 2021 Law Firm of the Year - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer