Garden leave (vrijstelling van werk) under Dutch law
Garden leave (vrijstelling van werk or vrijstelling van werkzaamheden) refers to an arrangement under which the employer releases the employee from the duty to perform work during the notice period, while the employment contract remains in force and salary continues to be paid. It is common in the Netherlands where sensitive roles are involved - for example, following the resignation of a senior manager or after notice of dismissal has been given - to prevent the employee from using their remaining time to damage the employer's interests or take clients to a competitor.
Dutch law does not contain a specific statutory provision on garden leave. The basis is the employer's right to assign or withhold work under the employment contract, combined with the pay continuation obligation under Article 7:627 in conjunction with Article 7:628 of the Dutch Civil Code. The employer must continue to pay full salary during garden leave, including any fringe benefits (car allowance, pension contributions) that the employee would normally receive.
Conditions for lawful garden leave under Dutch law
Garden leave must be distinguished from suspension (schorsing): garden leave is a neutral measure not carrying a punitive character, whereas suspension typically follows misconduct. For garden leave to be lawful, the employer must have a reasonable justification - such as protecting confidential information or client relationships. Placing an employee on garden leave without cause may be challenged as a breach of the employee's right to perform work, which Dutch case law recognises as an interest worthy of protection in certain roles.
Interaction with non-compete clauses under Dutch law
A key question during garden leave is whether time spent on garden leave counts towards the running of a non-compete clause (concurrentiebeding). Dutch case law is not uniform, but many courts hold that the non-compete period runs from the end of the employment contract, not from the start of garden leave. Employers who wish the non-compete period to run concurrently with garden leave should address this explicitly in the employment contract or the settlement agreement.
During the notice period - whether the employee is required to work or is placed on garden leave - the employee remains bound by all contractual obligations including confidentiality duties and any applicable non-compete clause. Under Article 7:672(11) of the Dutch Civil Code, a party that terminates the employment earlier than the legally applicable notice period owes the other party a compensation equal to the wages over the remaining notice period. The notice period runs until the so-called exit day (aanzegdag), which by default falls at the end of a calendar month under Article 7:672(1) of the Dutch Civil Code, unless a different exit day has been agreed in writing or follows from custom. Where an employer places an employee on garden leave but also wishes to bring the employment to an early end, the parties should document this in a settlement agreement to prevent disputes about whether the full notice period has been observed.