An Australian Garden Leave Letter is a formal written notice issued by an employer directing an employee not to attend the workplace or perform any duties during all or part of their notice period, while continuing to receive full salary and contractual benefits. Garden leave — sometimes called 'gardening leave' — is a common mechanism used in Australia during the departure of senior, client-facing, or commercially sensitive employees to protect the employer's business interests without the uncertainty of a post-employment restraint of trade. Garden leave operates during the existing notice period rather than after it. The employee remains employed throughout the garden leave period, continues to receive their base salary, accrues annual leave and personal/carer's leave under the National Employment Standards (NES) of the Fair Work Act 2009 (Cth), and remains bound by all ongoing contractual obligations including confidentiality and any post-employment restraints. Because the employee is still employed, garden leave sidesteps some of the enforceability challenges that can arise with post-employment non-compete clauses. Under the Fair Work Act 2009, an employer is entitled to direct an employee to remain away from the workplace during a notice period, provided the employee continues to receive their full contractual entitlements. The right to place an employee on garden leave should ideally be set out expressly in the employment contract. Where the contract is silent, the implied right to direct an employee's activities during employment generally supports a reasonable garden leave direction, provided the direction is not so broad as to constitute an unreasonable restraint of trade under the common law. Garden leave is particularly useful when a departing employee holds senior roles with access to current strategic plans, pricing information, client relationships, or proprietary technology. By keeping the employee off the market for the duration of their notice period, the employer reduces the risk that confidential information will be leveraged immediately by a competitor. The period also allows the employer to manage client transitions, redistribute responsibilities, and recover company property and system access in an orderly way. Common scenarios where Australian employers issue garden leave notices include resignations to join a direct competitor, departures of senior executives or relationship managers, redundancy scenarios involving highly sensitive roles, and cases where the employee has access to near-term pricing or bidding information that would be commercially damaging if shared immediately. The duration of garden leave that Australian courts will uphold is not unlimited. Courts assessing whether a garden leave direction is enforceable will consider whether it functions as an unreasonable restraint of trade. A garden leave period that is combined with a post-employment non-compete clause (so that the employee is effectively restrained for an extended total period) may be scrutinised closely. Courts may credit the garden leave period against the post-employment restraint period, or strike down the combined arrangement if it is unreasonable. This Garden Leave Letter is suitable for a wide range of Australian employment scenarios, including senior management, sales roles, finance, and technology. It should be used alongside the employee's existing employment contract and any applicable Modern Award or enterprise agreement. Employers are encouraged to seek advice from a qualified Australian solicitor or HR professional when placing senior employees on garden leave, particularly where an extended restraint period is also intended.
What Is a Garden Leave Letter (Australia)?
A Garden Leave Letter is a formal written notice issued by an Australian employer that directs an employee to remain away from the workplace during all or part of their contractual notice period, while continuing to receive full salary and contractual benefits. The term 'garden leave' (or 'gardening leave') reflects the idea that the employee is effectively free to tend their garden rather than attend the office — they are employed but not working. Unlike a post-employment restraint, garden leave operates within the existing employment relationship and therefore does not raise the same enforceability challenges as a non-compete clause agreed at the start of employment. The Fair Work Act 2009 (Cth) underpins the legal framework, ensuring that employees on garden leave continue to receive all National Employment Standards entitlements, including annual leave accrual, superannuation contributions, and personal/carer's leave, throughout the garden leave period.
When Do You Need a Garden Leave Letter (Australia)?
Garden leave is most commonly used when a senior, client-facing, or commercially sensitive employee resigns to join a competitor or to start a competing business. It is also used in redundancy scenarios where the employee holds knowledge of near-term pricing decisions, active tender bids, or strategic plans that could be damaging if shared immediately with a new employer. Other situations where garden leave is appropriate include the departure of key account managers or sales staff with deep client relationships, the exit of IT or technology professionals with access to proprietary systems or source code, and cases where the employer needs time to transition client relationships and recover company property in an orderly way. Employers with express garden leave provisions in their employment contracts are in the strongest position; however, employers may also be able to rely on implied authority under the general right to direct work during the notice period, particularly where the garden leave direction is of reasonable duration.
What to Include in Your Garden Leave Letter (Australia)
An effective Australian Garden Leave Letter should clearly identify both parties — including the employer's full legal name, ABN, and address — and set out the precise commencement and end dates of both the notice period and the garden leave period. The letter must confirm that the employee will continue to receive their full base salary and all contractual benefits (including superannuation contributions at the statutory Superannuation Guarantee rate) throughout the garden leave period. It should specify the obligations that apply during garden leave: the requirement to return all company property immediately, restrictions on contacting clients or employees, suspension of system access, and any availability requirements. The letter should also remind the employee that all confidentiality obligations and any post-employment restraints in their existing employment contract remain fully operative during and after garden leave. Including a signed acknowledgment section ensures the employer has evidence of receipt, which is valuable if the matter is later contested before the Fair Work Commission or a court.
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Termination Letter (Australia)
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Non-Compete Agreement (Australia)
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