Garden Leave in UAE: Rules, Rights & Labour Law

Garden leave is a period during an employee's notice period when the employer asks them to stay away from work while continuing to pay their full salary. It is common for senior roles, sales positions, or jobs involving confidential information. UAE Labour Law does not name "garden leave" directly, but employers can apply it through contractual notice period clauses.

Quick Summary

• Garden leave is a paid arrangement where an employer asks a departing employee to stay away from work during their notice period while continuing to pay full salary.
• UAE Labour Law does not specifically define garden leave - it is governed through employment contracts and notice period provisions.
• The employee receives full salary and benefits throughout the garden leave period.
• Employees on garden leave generally cannot start work with another employer until the notice period officially ends.
• Annual leave continues to accrue during garden leave since the employee remains formally employed and paid.
• Garden leave counts toward service length for gratuity and end-of-service benefit calculations.
• Employers must include a garden leave clause in the employment contract to use this arrangement.
• Common for senior management, sales roles, and employees handling confidential information.

Garden Leave at a Glance

What Is Garden Leave?

Definition

Garden leave means an employer instructs a departing employee to stay away from the workplace during their notice period, while still paying their full salary and benefits.

Purpose

It protects the business by keeping the employee away from clients, confidential information, and ongoing projects during a sensitive transition period.

Why Employers Use Garden Leave

Employers use garden leave to reduce the risk of a departing employee sharing sensitive information, poaching clients, or disrupting operations before joining a competitor.

Is Garden Leave Recognized Under UAE Labour Law?

Legal Position

UAE Labour Law does not use the specific term "garden leave." However, it recognizes notice periods and allows employers to release an employee from active duties during that period, provided salary continues as normal.

Contractual Clauses

Garden leave typically works through a specific clause in the employment contract or a separate agreement at the time of resignation or termination, rather than through a dedicated labour law article.

Employer Rights

Employers can place an employee on garden leave as part of the notice period, as long as the employee's contractual pay and benefits continue uninterrupted.

Employee Rights

Employees on garden leave retain the right to full salary, benefits, and any other contractual entitlements during the notice period, even though they are not actively working.

Who Can Be Placed on Garden Leave?

Private Sector Employees

Any private sector employee under notice can potentially be placed on garden leave if their contract allows for it.

Senior Management

This is most common for senior executives who have access to strategic information or client relationships.

Sales & Client-Facing Roles

Employees with direct client relationships are often placed on garden leave to prevent them from carrying business relationships to a new employer during the transition.

Employees Handling Confidential Information

Employees with access to trade secrets, financial data, or strategic plans are common candidates for garden leave arrangements.

Garden Leave During Notice Period

Salary During Garden Leave

The employee continues to receive full salary as if actively working, since garden leave is a paid arrangement, not a suspension without pay.

Benefits & Allowances

Contractual benefits, such as housing or transport allowances, typically continue during garden leave unless the contract states otherwise.

Leave Accrual

Annual leave generally continues to accrue during garden leave since the employee remains formally employed and paid.

Can Employees Join Another Company?

Generally no, since the employee is still under contract with their current employer during garden leave. Joining a new employer during this period would usually breach the existing contract.

Employer Responsibilities

Salary Payment

Employers must continue paying full salary throughout the garden leave period.

Confidentiality

Employers should remind employees of ongoing confidentiality obligations, even while away from active work.

Return of Company Assets

Employers typically require the return of laptops, access cards, and other company property at the start of garden leave.

Restrictive Covenants

Any non-compete or non-solicitation clauses in the contract usually continue to apply during and sometimes beyond the garden leave period.

Employee Rights During Garden Leave

Pay & Benefits

Full salary and standard benefits continue throughout the period.

Communication Expectations

Employees may be asked to remain reachable in case the employer needs information during the transition, though they are not expected to perform regular duties.

Restrictions on Employment

Employees typically cannot start work with a new employer, including competitors, until the garden leave and notice period officially ends.

Garden Leave vs Other Leave Types

Garden Leave vs Notice Period

Garden leave happens within the notice period. The notice period is the overall timeframe before employment ends. Garden leave is a specific arrangement where the employee stays home instead of working during part or all of that period.

Garden Leave vs Annual Leave

Annual leave is a standard earned entitlement used for rest. Garden leave is specifically tied to the exit process and is initiated by the employer, not requested by the employee for personal time off.

Garden Leave vs Unpaid Leave

Garden leave is fully paid. Unpaid leave, by definition, involves no salary for the period taken.

Garden Leave vs Suspension

Suspension is usually linked to a disciplinary process and may or may not be paid. Garden leave is not disciplinary and is always paid in full.

Garden Leave vs Administrative Leave

Administrative leave often relates to internal investigations. Garden leave specifically relates to the exit or notice period process.

Real-Life HR Scenarios

Employee Resignation

A senior manager resigns to join a competitor. The company places them on garden leave for the remainder of their notice period to protect client relationships and sensitive data.

Employer Termination

An employer decides to end an employee's contract but wants them to stay away from the office during the notice period. The company continues full pay and asks the employee to return all company property immediately.

Confidential Project Exit

An employee working on a confidential product launch resigns. The company places them on garden leave to prevent any information leaks during the transition.

Client Relationship Protection

A sales employee moving to a rival firm is placed on garden leave to avoid direct client contact during their notice period.

Can an Employer Force Garden Leave?

Yes, if the employment contract includes a clause allowing the employer to place the employee on garden leave during notice. Without such a clause, the employer would typically need the employee's agreement.

Common Mistakes to Avoid

Employers sometimes fail to include a garden leave clause in contracts, which limits their ability to use this arrangement later. Some also forget to formally request the return of company assets at the start of the period, or fail to clarify confidentiality expectations in writing.

HR Compliance Checklist

• Confirm the contract includes a garden leave clause
• Document the start and end dates clearly
• Continue full salary and benefits
• Request return of company property
• Remind the employee of confidentiality and non-compete obligations in writing

Frequently Asked Questions

What is garden leave in the UAE?

It is a paid period during an employee's notice period where the employer asks them to stay away from work while continuing to pay their salary.

Is garden leave legal under UAE Labour Law?

Yes, it is generally permitted through contractual notice period clauses, even though the term itself is not specifically defined in the law.

Is an employee paid during garden leave?

Yes, garden leave is fully paid at the employee's regular salary.

Can an employer place an employee on garden leave?

Yes, if the employment contract allows for it, or with mutual agreement between employer and employee.

Can an employee work for another company during garden leave?

Generally no, since the employee remains under contract with their current employer until the notice period ends.

Does annual leave continue to accrue during garden leave?

Yes, since the employee remains formally employed and paid during this period.

What is the difference between garden leave and notice period?

The notice period is the overall timeframe before employment ends. Garden leave is a specific arrangement within that period where the employee is asked to stay away from work.

Can an employer terminate an employee instead of placing them on garden leave?

Yes, employers can choose to terminate directly, but garden leave is often preferred when the employer wants to retain some control during the transition while limiting the employee's access to the business.

What happens to salary and benefits during garden leave?

They continue as normal, since garden leave is a fully paid arrangement.

How does garden leave affect end-of-service benefits?

Since the employee remains employed and paid throughout, garden leave typically counts toward service length for gratuity and other end-of-service calculations.