Garden leave / Freistellung
September 01, 2023
Garden leave or release from work is the unilateral cancellation of the employment entitlement and the obligation to work by the employer. A distinction is made between an irrevocable and a revocable release from work: In the case of an irrevocable release from work, the employee can no longer be unilaterally requested by the Employer to perform. This form of release from work is regularly accompanied by the crediting of holiday and time off compensation entitlements that still exist (e.g. for overtime), but this must be expressly declared. As a rule, employees are released from work before extraordinary dismissal or during the notice period of ordinary dismissal. The employee is not entitled to release from work during the notice period.
The execution of the right of release from work, i.e. the order of release from work, must always comply with the requirements of section 106 sentence 1 of the Trade, Commerce and Industry Regulation Act (Gewerbeordnung - GewO), i.e. in particular it must take into account the overriding provisions of the labour or collective agreement and the law.
Possibility of release in the employment contract
The employee may not waive his or her right to employment altogether in advance. The agreement of a possibility of release from work within the framework of the existing employment relationship by means of a form employment contract unilaterally pre-formulated by the Employer, which is to be treated as General Terms and Conditions, is only validly admissible if it is linked to recognisable preconditions and the grounds for release do not substantially deviate from the respective corresponding preconditions of the employee's right to employment. According to case law, clauses in form employment contracts that allow the Employer to grant an unrestricted release from work that is not linked to preconditions are therefore inadmissible.
A clause agreed individually or within the framework of a form employment contract concerning the employer's possibility to release the employee from work during the notice period is only effective if it relates to dismissals for reasons of conduct. In the case of a reference to reasons for termination for operational reasons, release from work is only possible in the event of a poor order situation.
A release from work without an agreement on a corresponding right of the Employer is in principle permissible if an employment claim exists and only has to comply with the requirements of section 106 sentence 1 GewO. If the employment of the employee jeopardises interests of the employer that are worthy of protection, so that the acceptance of the work performance is unreasonable for the employer and an extraordinary dismissal would be justified, or if the performance of the work is impossible, the employee already has no right to employment. In this case, a release from work is not actually necessary, but at least a declaration to the employee does not have to meet the requirements for a release from work.
For the duration of an irrevocable release from work, the employee regularly retains his contractual entitlement to remuneration. During a revocable release from work, the employee has a claim to default of acceptance pay in the amount of the regular remuneration claim under the conditions of section 615 of the German Civil Code (BGB).
Both payment claims are excluded if the employee is unable and unwilling to perform, the acceptance of the performance is unreasonable for the Employer or impossible for the Employer through no fault of its own. Thus, even during the release from work, the employee is obliged to notify the employer of any incapacity for work.
Possibilities of defence
The employee can take legal action against an ineffective release from work and assert his or her employment claim by means of a lawsuit or an application for an interim injunction. In addition, the employee has the option, after prior warning, to terminate the employment relationship without notice and, if necessary, to claim compensation for the damage caused by the termination of the employment relationship (section 628(2) of the BGB).