Garden leave — where an employee serves their notice period at home, paid but not working — is less common in Canada than in the UK, but is increasingly used by Canadian employers to manage the departure of senior employees. Contractual notice periods in Canada also interact in important ways with your common law rights to reasonable notice, which can significantly exceed what your employment contract specifies. Understanding these dynamics before you sign is critical.
What is a Garden Leave?
Garden leave is a contractual arrangement where an employee on notice is required to stay away from the workplace, not work for anyone else, and remain employed (and paid) until the notice period expires. In Canada, it is most often used when an employer wants to prevent a departing employee from taking clients or confidential information to a competitor while ensuring the non-compete or non-solicitation clock is running. Canadian employment law — particularly in Ontario and BC — provides that employees who are terminated without cause are entitled to 'reasonable notice' at common law, which courts calculate based on years of service, age, position, and job-finding prospects (the Bardal factors).
Red flags to watch for
A clause specifying notice of '2 weeks' displaces the common law right only if it meets or exceeds minimum statutory notice and if the contract clearly states it is the exclusive notice entitlement. Short contractual notice clauses that don't meet this threshold are often void — meaning you retain your (longer) common law rights.
If you're required to remain available and not work for anyone else during a garden leave period, you must be paid your full salary and benefits throughout. A garden leave clause without explicit pay continuation is unusual and worth querying.
Some Canadian contracts use garden leave to run down a non-compete period, which is appropriate — but only if the contract clearly states that the non-compete period runs from the start of the notice/garden leave, not from the last day of employment.
A clause giving the employer absolute discretion to place you on garden leave at any time creates uncertainty. Look for defined trigger circumstances (resignation, termination, or assignment to a competing role).
Provincial employment standards (e.g., Ontario ESA, BC Employment Standards Act) set minimum notice floors that are deliberately low. If the contract sets notice at statutory minimums only, you may be giving up a significantly larger common law entitlement — particularly if you are a senior employee with long service.
Your legal rights
In Canada, wrongful dismissal (termination without adequate notice) is a common law right — the default is 'reasonable notice' calculated by courts based on the Bardal factors (age, length of service, character of employment, availability of similar employment). Contractual notice clauses displace this right only if they are clear, meet minimum employment standards, and were properly communicated. Provincial employment standards legislation (Ontario ESA 2000; BC Employment Standards Act RSBC 1996; Alberta Employment Standards Code RSA 2000) sets minimum notice periods that cannot be contracted out of. Garden leave pay must continue during the notice period under both contract law and employment standards.
Questions to ask before you sign
- 1Does the contractual notice period meet or exceed my statutory minimum under provincial employment standards legislation?
- 2Does the contract explicitly state that the notice period displaces my common law right to reasonable notice?
- 3During any garden leave period, am I fully paid including all benefits, bonuses, and entitlements?
- 4Does the garden leave period count toward my non-compete or non-solicitation restriction period?
- 5Under what circumstances can the employer elect to place me on garden leave — is it at their absolute discretion?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.