Gardening leave.

Gardening leave (also written garden leave) is when your employer tells you to stay away from work for some or all of your notice period while you remain employed and keep getting paid. You do not resign, you are not dismissed on the spot, and your job does not formally end until the notice period runs out. Almost everything else covered on this site comes from the National Employment Standards (NES), but gardening leave does not. It is a contractual device, not a statutory entitlement, and the Fair Work Act 2009 does not mention it at all. That distinction matters, because it changes who decides whether you can be sent home, and it is also the reason your annual leave keeps building up while you are sitting at home. This guide sets out what Australian law actually says, what it does not say, and where the position is genuinely unsettled.

What gardening leave actually is

The Supreme Court of Victoria described it plainly in BearingPoint Australia Pty Ltd v Hillard: garden leave is "a colloquial or euphemistic term for an employer insisting that an employee, who has given notice, stay away from work for the duration of the notice period, whilst continuing to pay the employee's remuneration". Three things define it:

• You are still employed. The employment relationship continues to the last day of the notice period.
• You are still paid. Normally your full contractual pay, although performance bonuses tied to work you can no longer do are often carved out by the clause.
• You do not attend work. You are usually also told not to contact clients or colleagues, and not to access systems.

You can still be required to stay contactable. In DP World Sydney Ltd v Guy, a general manager on gardening leave was told he was not required to attend the office but was to remain contactable and available for work by company phone if needed. The court borrowed Dixon J's line from the High Court in Automatic Fire Sprinklers Pty Ltd v Watson: he was one who served although he only stood and waited. Employers typically use it for senior staff who are heading to a competitor, because it keeps you out of the market and away from confidential information while the clock runs down.

Why it is not an NES entitlement

Search the consolidated Fair Work Act 2009 for gardening leave or garden leave and you get nothing. There is no section number to point to, no minimum, no maximum, and no Fair Work Ombudsman guidance page devoted to it. That is because the NES does not regulate whether you are given work during your notice period. It regulates two narrower things.

First, section 117 says an employer must not terminate your employment unless it has given you written notice of the day of termination. Second, it must either let that minimum period run before the termination date, or pay you payment in lieu of notice of at least what you would have earned at your full rate of pay for the hours you would have worked. The minimum period is set by a table:

So the maximum NES minimum is five weeks. What section 117 never says is that your employer has to give you something to do during those weeks. That silence is the gap gardening leave lives in, and the gap is filled by the common law of contract, not by the National Employment Standards. Awards, enterprise agreements and individual contracts can require longer notice than the NES scale, which is why senior gardening leave periods of three or six months are common. For the full picture on notice, see our notice of termination guide and our overview of the Fair Work Act.

Can an employer lawfully direct gardening leave?

In most cases yes, but the reasoning is not obvious. Australian courts do not ask whether there is an implied right to send you home. They ask the reverse question: does the employer owe you a duty to provide work? The starting point, drawn from Marbe v George Edwardes (Daly's Theatre) Ltd and applied in Australia, is that employment contracts fall into two categories. In the usual category the only obligation on the employer is to pay the agreed remuneration. In the second, narrower category the employer also promises the opportunity to actually do the work. If your contract is in the first category, keeping you at home on full pay is not a breach.

In BearingPoint, a managing director's contract contained no garden leave clause at all. The court still found that a term should be implied entitling the employer to direct him onto garden leave for the whole of his 180 day notice period, because the contract permitted the employer to vary his duties once he had given notice, his bonuses were discretionary rather than work-dependent, and his role was not so unique that his skills would decay.

Do not read that as a general rule. As Morritt LJ put it in William Hill Organisation Ltd v Tucker, quoted with approval in BearingPoint, whether there is a right to work "is one of construction of the particular contract in the light of its surrounding circumstances". Courts have been readier to find a duty to provide work where the role is specific or unique, where the skills need frequent exercise to be preserved, where the work is a defined project, and where the pay depends on being given the chance to earn it (commission roles, performers). Someone in one of those categories has a stronger argument that being sidelined is a repudiation of the contract. That is exactly why most senior Australian contracts now contain an express gardening leave clause spelling out that the employer need not provide work, that you remain employed, and that you keep being paid.

Does leave keep accruing during gardening leave?

Yes. This is the single most valuable thing to understand about gardening leave, and the answer follows a short chain of provisions in the Fair Work Act.

• Section 87(2) says paid annual leave accrues progressively during a year of service, according to your ordinary hours of work.
• Section 96(2) says exactly the same for paid personal/carer's leave.
• Section 22(1) defines a period of service as a period during which the employee is employed by the employer.
• Section 22(2) then carves out only two things: periods of unauthorised absence, and periods of unpaid leave or unpaid authorised absence.

Gardening leave is neither. You are employed, the absence is authorised, and it is paid. It therefore counts as service, so annual leave and personal/carer's leave keep accruing at your normal rate right through to the last day of the notice period, and the time also counts towards continuous service for notice, redundancy pay and long service leave qualification.

A useful sanity check comes from stand downs. An employee stood down under the Fair Work Act is not paid at all, yet the Fair Work Ombudsman confirms they still accrue leave based on their normal hours and that the time counts towards service, because section 22(2)(b)(ii) expressly excludes a stand down from the list of periods that do not count. If leave accrues during an unpaid stand down, it certainly accrues during paid gardening leave.

The Fair Work Ombudsman's library puts the same point in everyday language: leave accumulates up to the employee's last day where the employee works out the notice period, and does not accumulate where the notice is paid out instead. Gardening leave sits on the first side of that line. The decisive question is never whether you are at a desk, it is whether you are still employed. For the general principle applied to other kinds of leave, see do you accrue leave while on leave.

Can your employer make you use annual leave instead?

No. The Fair Work Ombudsman is explicit: an employee can take annual leave during a notice period if the employer agrees to it, but an employer cannot force an employee to take leave as part of the notice period. Gardening leave is not annual leave. It is paid ordinary time, so your accrued annual leave balance is untouched by it and is still paid out in your final pay when the employment ends.

This is worth watching, because sending someone home is administratively identical to putting them on leave and some employers try to book the period against the leave balance. The only situations in which an Australian employer can direct you to take annual leave at all come from an award or registered agreement, and are limited to things like a business shutdown or an excessive accrued balance. For award and agreement free employees, a direction has to be reasonable. None of those pathways turns a notice period into annual leave.

Sick and carer's leave rules also carry on as normal during a notice period: you can take it if you give notice as soon as possible and provide evidence if asked. Public holidays that fall inside a notice period do not extend the notice period, although you are still entitled to the usual public holiday treatment.

Gardening leave, payment in lieu and working out your notice

These three are routinely confused, and the difference is worth real money. The employer chooses between them, not you. It can also mix them, for example three weeks of gardening leave followed by two weeks paid out.

A fourth thing gets muddled in as well: a stand down. A stand down under the Fair Work Act is generally unpaid and can only be used where the employee cannot be usefully employed for a reason outside the employer's control, such as equipment breakdown or a natural disaster. It is not a tool for managing a departing employee. Suspension is different again: it normally happens during a misconduct investigation, before any notice has been given, and whether it is paid depends on the contract or policy. Gardening leave sits apart from both because it presupposes that the employment is already ending. Compare the numbers in our payment in lieu of notice guide and, if you resigned, our resignation notice period guide.

How gardening leave interacts with restraint of trade

This is where Australian law is genuinely unsettled, and honest guidance has to say so. The question that matters is whether a gardening leave period counts towards a post-employment restraint, or whether the restraint clock only starts afterwards. Two NSW Supreme Court decisions have gone opposite ways on facts that look similar from the outside.

In Tullett Prebon (Australia) Pty Ltd v Purcell, a broker resigned with immediate effect in breach of a fixed term contract. The employer refused to accept the resignation, invoked a detailed gardening leave clause and kept paying him. Brereton J held that the contract remained on foot, but that the employment relationship had ended with the repudiatory resignation. Critically, he held that the doctrine of restraint of trade applies during the term of a contract, including any period of notice or gardening leave, and that a prohibition on working for third parties is valid only so far as it is reasonable. The restraint was measured from the end of the actual employment and cut back to six months.

In DP World Sydney Ltd v Guy, a general manager gave proper three month notice and was placed on gardening leave under an express clause. Because neither party repudiated the contract and the employee remained contactable and bound by the clause, White J held that the employment relationship did not end when the gardening leave began. The restraint period therefore only started once both the relationship and the contract had ended, which meant the employee could be kept out of the market for six months in total: three months of gardening leave plus a three month restraint.

The practical lessons are: read the restraint clause carefully, because some contracts expressly set off any gardening leave against the restraint period and others do not; the answer can turn on whether the departure was a clean notice or a repudiation; and even a well-drafted clause is not self-executing, because a court will still test the total period for reasonableness. Restraints are also governed by state law in New South Wales, which has its own Restraints of Trade Act. If large sums or a job offer are riding on this, get advice specific to your contract and your state.

Can you start a new job during gardening leave?

Legally you are still employed, so every term of your contract still binds you. That normally includes an exclusive service clause, confidentiality obligations and the implied duty of fidelity. On the face of it, starting somewhere else during gardening leave is a breach.

Whether a court will stop you is a different question. In BearingPoint the employer asked for an injunction restraining the employee from working for a competitor during the remaining notice period, and lost. The court accepted that granting it would in effect be specific performance of a contract of personal service, because the prohibition on any other work was so broad that the employee would be forced to remain idle. It also found the application was principally directed at keeping him out of competition for as long as possible, which it described as not a legitimate purpose. The employer was left to a claim in damages.

In Tullett Prebon the employer did get an injunction, because the restraint was confined to the particular market the broker worked in, so enforcing it did not leave him with nothing to do. The pattern across the cases is that a narrow, field-specific restriction is far more likely to be enforced than a blanket ban on all work.

So the honest answer is: it depends on your contract, your seniority, whether the new role competes, and which court hears it. The safe assumption is that you are still employed and still bound, that your employer can sue for damages even if it cannot get an injunction, and that a new employer who knowingly encourages the breach can be dragged in too. Do not rely on the fact that you have nothing to do as evidence that you are free. If the arrangement itself feels like a disguised dismissal rather than a notice period, our unfair dismissal guide explains the separate avenue there.

A worked example

Marcus is a full-time employee working 38 ordinary hours a week. He is 47 years old with 6 years of continuous service. His employer decides to end his employment and, because he is moving to a competitor, invokes the gardening leave clause in his contract for the whole notice period.

Marcus should check the arithmetic against his payslip and his final pay statement. Unused annual leave is paid out; unused sick and carer's leave is not. If long service leave is in play, the extra 5 weeks of service can matter, so see our long service leave calculator and our page on what belongs in termination pay.

Frequently asked questions

Is gardening leave the same as suspension or a stand down?

No. Gardening leave assumes the employment is already ending and is paid. Suspension usually happens during a misconduct investigation before any notice is given, and whether it is paid depends on the contract or policy. A stand down under the Fair Work Act is generally unpaid and can only be used where an employee cannot be usefully employed for a reason outside the employer's control, such as equipment breakdown or a natural disaster.

Does annual leave keep accruing while I am on gardening leave?

Yes. Annual leave accrues progressively during a period of service under section 87(2), service means a period during which you are employed under section 22(1), and the only carve-outs in section 22(2) are unauthorised absence and unpaid leave. Paid gardening leave is neither, so accrual continues to your last day. The same reasoning applies to personal/carer's leave under section 96(2).

Can my employer put me on gardening leave if my contract says nothing about it?

Possibly. In BearingPoint the court implied a term allowing it even though there was no express clause. But that was a decision on that particular contract, and courts are readier to find a duty to provide work where the role is unique, the skills need constant exercise, the work is a defined project, or your pay depends on being given the chance to earn it. If you are in one of those categories, get advice before assuming the direction is lawful.

Can my employer make me take annual leave during my notice period instead?

No. The Fair Work Ombudsman states that an employer cannot force an employee to take leave as part of a notice period. You can agree to take annual leave, but it cannot be imposed on you, and gardening leave does not consume your annual leave balance.

Does gardening leave count towards a post-employment restraint?

It depends on the contract. In DP World Sydney Ltd v Guy it did not, so the employee faced three months of gardening leave plus a three month restraint. Some contracts expressly set gardening leave off against the restraint period. Courts will still assess whether the total period is reasonable, and in Tullett Prebon a much longer restraint was cut back to six months.

Does gardening leave count as continuous service?

Yes. You remain employed and the absence is paid and authorised, so it is not an excluded period under section 22(2). The time counts towards notice, redundancy pay and long service leave qualification. Browse more common questions in our FAQ or look up unfamiliar terms in the glossary.

Author & reviewer

Sarah Reid, CAHRI

Certified Australian HR Practitioner · Cert IV Payroll · 12 years Fair Work compliance

Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.

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