Garden Leave vs PILON: How to Compare Notice Exit Clauses in an Employment Contract (England)

Compare garden leave with PILON as two exit routes, not as synonyms for paid time off. Garden leave keeps the contract alive through notice. A contractual PILON ends employment when the lawful payment is made. Log employment end, pay and benefits, covenant start, and whether you can join a competitor, then ask for the written route that matches.

The choice is either stay employed on garden leave, or end now on a valid PILON. HR’s line that “paid leave equals PILON” collapses both into one label and usually mis-states when covenants start. Open the notice section and treat each clause as a separate outcome before you answer the exit email.

Worked packet — the signed contract file set — for Enfys at Severn Line Studio Ltd (1 March 2024): Clause 12.1 six months’ notice; 12.2 PILON on basic salary only; 12.4 garden leave on full pay and benefits; Clause 15 six-month non-compete from Termination Date with no set-off. Avon Rival starts 5 November 2026; confirmation Friday 16 October 2026. England and Wales only.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

Same notice section, two outcomes — stay employed or end now

On garden leave you remain employed even though you are told not to attend. On a valid PILON you stop working at once and the contract ends on the same day. Mark those two end dates before you debate pay.

Acas’s page on when an employee is not required to work notice (updated 24 November 2025) draws the same line. HMRC’s EIM12975 also separates gardening leave from a true PILON. Typical mistake: treating laptop return as the Termination Date under both routes.

For Enfys, Clause 12.4 garden leave runs through the six months’ notice. A lawful Clause 12.2 PILON ends employment on payment day. The routes are mutually exclusive for the same notice days — alternative exits, not a stacked pair.

What each clause actually pays — salary-only PILON vs full benefits

Do not assume PILON equals every pound you would have earned through notice. Acas says full pay for notice on a PILON, yet other benefits are unlikely after the contract ends unless the clause or a written deal includes them.

Clause 12.2 is basic salary only and silent on bonus, pension, car, and medical. Clause 12.4 keeps full contractual pay and benefits. AD Solicitors’ garden leave and notice guide flags silence on PILON contents as a common source of dispute. Tick salary, bonus, pension, medical, car, and holiday accrual under each clause.

Tax treatment needs its own check. GOV.UK’s termination payments tax page treats notice pay and gardening-leave pay as earnings. Post-employment notice pay (PENP) rules mean notice-equivalent amounts do not sit under the £30k threshold.

Express-clause gate — neither route works without a contractual right

Both exits need a contractual right or your written agreement. Acas states an employer cannot force a PILON if it is not in the contract. Without an express garden-leave power, sending someone home can be a breach where there is a duty to provide work.

The Court of Appeal in William Hill Organisation Ltd v Tucker [1998] EWCA Civ 615 is the usual authority. An imposed exit without a clause can be repudiatory and may put covenants at risk. Enfys already has 12.2 and 12.4 — the question is which route HR exercises. If your PDF lacks either power, require written agreement or counsel — a qualified employment lawyer — before treating the email as the deal.

Covenant clock, confidentiality, set-off, and the competitor start date

Post-termination restrictive covenants normally run from the Termination Date. Garden leave pushes that date out; a valid PILON pulls it forward. Mark the timing only — not whether Clause 15 is enforceable.

Recording Law’s garden-leave note puts covenant start after employment ends. Clause 15 runs six months from Termination Date with no set-off. In practice, full garden leave plus a full non-compete can stack. Flag the missing set-off; enforceability belongs with counsel.

Clause 14 confidentiality survives either route. Map Avon Rival’s 5 November 2026 start against both clocks. For example, a salary-only PILON may allow an earlier start while cutting benefits. Status labels in commercial paper belong in the contractor-not-employee review; staff-transfer wording in the TUPE outsourcing guide.

Side-by-side comparison — employment end, pay, duties, holiday, covenants

Fill the table from the PDF, not from HR’s loose wording. DavidsonMorris’s holiday entitlement guide notes statutory holiday keeps accruing on garden leave and stops once a valid PILON ends employment. Garden leave is not automatic annual leave.

First-pass choose-or-negotiate checklist — one written HR preference

You need one comparison log and a short email citing clause numbers. Prefer garden leave if benefits beat speed. Prefer PILON if the competitor start cannot wait and you accept salary-only pay plus an earlier covenant clock.

If HR swaps to a settlement agreement, that is a different document — do not merge it into this exit log. Upload the PDF for a first-pass — a quick machine extract of clause flags — via document analysis, then confirm with counsel before Friday 16 October 2026.