Employee departures can expose a company to more than operational disruption. When a senior, commercial or client facing employee resigns, the business may need to protect confidential information, customer relationships, pricing data and strategic plans.
Garden leave gives employers a way to manage this transition. The employee remains employed and continues serving their notice period, but may be instructed not to perform regular duties, access company systems, contact clients or begin working for another employer.
However, garden leave should not be used automatically. Employers need to consider the employment contract, the employee’s role, the business risk and applicable local laws. This guide explains how garden leave works, when it may be appropriate and how employers can manage it fairly.
What is Garden Leave?
Garden leave is a period where an employee remains on the payroll during their notice period but is not required to perform their normal duties.
During this time, the employee may be asked to:
- Stop attending work
- Return company devices or access credentials
- Avoid contacting clients or employees
- Stay away from sensitive business activities
- Refrain from joining competitors until employment officially ends
The term originally became common in the UK and Commonwealth employment practices, but many companies globally now use similar arrangements.
Is Garden Leave Legal in Southeast Asia?
Yes, garden leave can generally be used in Southeast Asia, but the rules and enforceability differ from country to country.
In many Southeast Asian markets, garden leave is not always specifically regulated under employment law. Instead, its validity usually depends on:
- The employment contract
- Local labor regulations
- Whether the restrictions are considered reasonable
- Whether the employee continues receiving salary and benefits during the leave period
For example, in countries like Singapore and Malaysia, garden leave arrangements are more commonly recognized when they are clearly stated in the employment agreement and do not unfairly restrict the employee.
Meanwhile, in markets like Indonesia, Vietnam, and Philippines, enforceability can become more nuanced depending on local labor protections, termination rules, and how restrictive the arrangement is.
Companies should also remember that post-employment restrictions and non-compete clauses are treated differently across Southeast Asia. A clause that works in one country may not automatically be enforceable in another.
When Should Companies Use Garden Leave?
Garden leave isn’t necessary for every resignation. It’s typically used in situations where the risk to the business is higher than usual.
1. When Employees Have Access to Sensitive Information
If an employee has knowledge of trade secrets, financial data, or strategic plans, allowing them to continue working during the notice period could pose a risk, especially if they’re joining a competitor.
2. When Moving to a Competitor
Garden leave creates a buffer period that delays the employee’s transition to a competing company. This helps protect client relationships, internal processes, and competitive advantage.
3. When Managing Client-Facing Roles
For roles like sales, account management, or partnerships, employees often have strong relationships with clients. Garden leave minimizes the chance of client poaching or influence during the transition period.
4. During Leadership or Executive Transitions
Senior leaders often have access to high-level decision-making and company direction. Placing them on garden leave can prevent disruption while the company manages internal communications and succession planning.
5. When There’s a Risk of Conflict or Disengagement
If an employee is likely to become disengaged, disruptive, or uncooperative during their notice period, garden leave can help maintain team stability and morale.
Things Companies Should Watch Out For
Garden leave is not always suitable for every role or market. Some challenges include:
1. Cost Considerations
Employees remain on payroll even if they are no longer actively contributing to the business. Long notice periods can become expensive, especially for senior employees.
2. Local Employment Law Differences
Some countries have stricter rules around employee restrictions during notice periods. What works in one market may not automatically apply elsewhere.
3. Employee Experience
If handled poorly, garden leave can create negative employee experiences and damage employer branding. Clear communication and professionalism matter throughout the process.
Managing Garden Leave Across Multiple Countries
Garden leave is only one part of managing an employee exit. Employers also need to coordinate payroll, benefits, statutory contributions, unused leave, final payments and employment documentation.
Glints TalentHub EOR helps companies manage employment, payroll and compliance across countries through one connected solution. You can support employees throughout the employment lifecycle while reducing administrative and compliance complexity.
Final Thoughts
Garden leave can help protect confidential information, customer relationships and business continuity during sensitive employee departures. It allows the employee to remain employed and paid while temporarily stepping away from their regular responsibilities.
However, it should be used selectively. Employers should review the employment contract, confirm payment and benefit obligations, apply reasonable restrictions and communicate the arrangement clearly.
For companies managing employees across multiple countries, Glints TalentHub provides connected support across employment, payroll, compliance and employee transitions.
