What Is Garden Leave in the Netherlands?
Garden leave in the Netherlands (vrijstelling van werk, or "gardening leave") means that the employer releases the employee from the duty to work while the employment contract continues. The employee keeps full salary and benefits, continues to build up holiday, and remains bound by the contract, including confidentiality. Dutch law has no specific statutory provision on garden leave: the duty to keep paying the wage follows from Article 7:628(1) of the Dutch Civil Code, because not working is then for the employer's account. It is used mostly during the notice period or while a settlement agreement is negotiated.
Garden leave at a glance
- Contract continues: the employee is still employed; only the duty to work is suspended.
- Full pay: the employer must keep paying the wage (Article 7:628(1) of the Dutch Civil Code).
- Holiday keeps accruing, and garden leave cannot simply be declared holiday without the employee's agreement (Articles 7:634 and 7:638).
- Notice period is not shortened by garden leave; ending the contract early costs compensation (Article 7:672(11)).
- Non-compete: a non-compete clause restricts the employee after the end of the contract (Article 7:653), so it starts to run only when the employment ends.
- Not a sanction: garden leave is neutral, unlike a suspension.
On this page
What Is the Legal Basis for Garden Leave in the Netherlands?
There is no specific statutory provision. Garden leave rests on the employment contract and on the general rules: the employer must pay the wage when the employee does not work for a reason that is for the employer's account (Article 7:628(1) of the Dutch Civil Code), and both parties must act as a good employer and a good employee (Article 7:611).
Many employment contracts contain a clause allowing the employer to release the employee from work during the notice period. Without such a clause, garden leave is still possible, but the employer must be able to justify it under the good employer standard. The Dutch term is vrijstelling van werk or vrijstelling van werkzaamheden; the English "garden leave" is also widely used in Dutch practice.
Does the Employee Keep Full Pay During Garden Leave?
Yes. Because the employer chooses not to let the employee work, the employee keeps the right to the wage (Article 7:628(1)). That includes the fixed salary and the benefits that form part of the wage under the contract.
- Fixed salary, holiday allowance and the pension contributions that the contract provides for.
- Benefits such as a lease car or allowances, insofar as the contract gives the employee a right to them also for private use or regardless of the work; whether a purely work-related facility continues depends on the contract.
- Holiday entitlement, which accrues over every period with a right to wage (Article 7:634).
Variable pay, such as commission or a bonus that depends on the employee's own results, can be a point of dispute. It is best addressed expressly when the garden leave starts or in the settlement agreement.
Can a Dutch Employer Impose Garden Leave Unilaterally?
Usually yes, if there is a reasonable justification, such as protecting confidential information, client relationships or a smooth handover after a resignation or dismissal. The good employer standard (Article 7:611) sets the limit.
An employee can have a legitimate interest in actually doing the work, for example to keep professional skills up to date or to avoid reputational harm when colleagues and clients see them disappear. A long or unexplained release, especially in a conflict, can then be challenged. The employer should communicate garden leave in writing, state that it is not a sanction, and explain how contact with clients and colleagues is to be handled.
What Is the Difference Between Garden Leave and Suspension?
Garden leave is a neutral release from work. A suspension (schorsing or non-actiefstelling) usually follows a suspicion of misconduct or an investigation and has a disciplinary character. In both cases the employer continues to pay the wage.
The difference matters for the employee's reputation and for how the release is communicated. A suspension needs a sound reason connected to the investigation; garden leave is typically linked to the end of the employment.
Can Garden Leave Count as Holiday?
Not without the employee's agreement. Unless holidays are fixed by written agreement, collective agreement or statute, the employer sets the holiday periods in accordance with the employee's wishes, unless there are weighty reasons against it (Article 7:638(2)).
Holiday not taken at the end of the employment must be paid out (Article 7:641). In a settlement agreement, parties often agree that the remaining holiday is deemed to have been taken during the garden leave. That is valid only as an agreement, and it should be stated clearly. See also annual leave in the Netherlands.
Does Garden Leave Shorten the Notice Period?
No. Garden leave takes place within the notice period, which runs as normal. Notice is given to the end of the month unless another day has been agreed in writing or follows from custom (Article 7:672(1)).
| Length of employment on the day of notice | Statutory notice period for the employer |
|---|---|
| Less than 5 years | 1 month |
| 5 to 10 years | 2 months |
| 10 to 15 years | 3 months |
| 15 years or more | 4 months |
The statutory notice period for the employee is one month (Article 7:672(4)). A party that gives notice to an earlier date than applies owes the other party compensation equal to the wage for the period the contract should have continued (Article 7:672(11)); the subdistrict judge can reduce it, but not below the wage for the statutory notice period and not below three months' wage (Article 7:672(12)). More: notice periods in the Netherlands.
Does a Non-Compete Run During Garden Leave?
No. A non-compete clause restricts the employee in working in a certain way after the end of the employment contract (Article 7:653(1)). During garden leave the contract still runs, so the non-compete period has not yet started.
A long garden leave followed by a full non-compete can keep an employee out of the market for a long time. The court can annul a non-compete in whole or in part if the employee is unfairly disadvantaged in relation to the employer's interest (Article 7:653(3)(b)), and the combined duration is a circumstance that can be raised. Parties who want the garden leave to count towards the non-compete should agree that in writing.
During garden leave the employee remains bound by the duties of a good employee and by any confidentiality clause. A clause prohibiting work for others outside working hours is void unless justified by an objective reason (Article 7:653a); starting work for a competitor while still employed is, however, usually incompatible with being a good employee.
How Is Garden Leave Arranged in a Settlement Agreement?
When the employment ends by mutual consent, the settlement agreement usually records the garden leave together with the end date and the final settlement.
Free toolSettlement agreement generatorA settlement agreement for termination by mutual consent, with the reflection period and WW-safe wording.Draft an agreement- the start date of the release and whether the employee must remain available for questions;
- continued pay, including variable pay and benefits, until the end date;
- whether remaining holiday is deemed taken during the garden leave or paid out;
- return of company property and handover of work;
- whether a non-compete remains in force, is limited, or lapses;
- whether the employee may start new employment early, and what then happens to pay.
Garden Leave: What Should Employers and Employees Check?
- Does the contract contain a release clause, and is there a reasonable justification for garden leave?
- Has the release been confirmed in writing, making clear it is not a sanction?
- Are salary, holiday allowance, pension and benefits continued in full?
- Has holiday been set in agreement with the employee, or is it to be paid out at the end?
- Is the correct notice period observed, to the end of the month?
- How does the garden leave relate to any non-compete, confidentiality or non-solicitation clause?
Key Legal Sources
- Article 7:628 of the Dutch Civil Code, pay when the employee does not work
- Article 7:611 of the Dutch Civil Code, good employer and good employee
- Articles 7:634, 7:638 and 7:641 of the Dutch Civil Code, holiday
- Article 7:672 of the Dutch Civil Code, notice periods and compensation
- Articles 7:653 and 7:653a of the Dutch Civil Code, non-compete and ancillary work