Employment Law Knowledge

Garden Leave in Germany

Garden leave may affect continued remuneration, holiday entitlement, bonus claims, competing work, access to company systems and the return of company property. The wording and practical implementation should be assessed together.

Initial orientation

What garden leave means in an employment relationship

Garden leave releases an employee from the obligation to perform work while the employment relationship continues. It does not automatically settle every financial and contractual issue.

The employer may release the employee from work duties temporarily or until the employment relationship ends. The legal consequences depend on the wording, the contractual basis and the circumstances of the individual case.

It should be clarified whether the release is revocable or irrevocable and whether remuneration, bonus entitlements, holiday, time credits and other benefits continue without restriction.

Garden leave often forms part of a dismissal situation, termination agreement or negotiated separation package. The provisions should therefore be assessed as part of the overall arrangement.

Holiday is not automatically used during garden leave

A release from work does not necessarily reduce outstanding holiday entitlement. The declaration must be examined to determine whether holiday is intended to be granted effectively and whether the employee can use the relevant period without remaining subject to recall.

Structured review

First steps after receiving a garden-leave notice

The notice and the surrounding employment documents should be reviewed before assumptions are made about pay, holiday or other obligations.

01
Preserve the complete notice
Keep the written garden-leave notice, accompanying correspondence and any communication concerning access, handover or return of property.
02
Check revocability
Determine whether the employer reserves the right to require a return to work and what notice or conditions would apply.
03
Review remuneration
Salary, bonus, commission, benefits, company car arrangements and other remuneration elements may require separate assessment.
04
Clarify holiday and time credits
Outstanding holiday, overtime and working-time credits should not be treated as settled unless the relevant requirements are met.

Legal and economic assessment

Questions that should be examined

Garden leave can affect multiple contractual duties and financial claims at the same time.

Continued remuneration

The continued payment of fixed salary and other remuneration components should be checked for the full garden-leave period.

Revocable or irrevocable release

A revocable release may allow the employer to require the employee to return to work and may affect the treatment of holiday.

Holiday entitlement

The wording must show whether holiday is actually being granted and which periods are intended to satisfy the entitlement.

Other employment

Contractual duties, competition restrictions and the treatment of income from other work may remain relevant during garden leave.

Company property and access

Company cars, devices, documents, keys and access rights may need to be returned or formally documented.

Bonus and variable pay

Target achievement, performance conditions, due dates and contractual discretion may continue to affect variable remuneration.

Connected issues