Garden Leave. Romania & Germany. | Insights

1. What types of garden leave are there?

ROMANIA

Employment legislation in Romania does not regulate “garden leave” as a distinct legal institution. In practice, however, the concept is borrowed from other jurisdictions and is mainly used in termination contexts, where employees are relieved from the obligation to attend work while continuing to receive their salary.

Romanian law does not distinguish formal types of garden leave (such as revocable/irrevocable or paid/unpaid). The closest equivalent under local legislation is the suspension of the individual employment contract due to unjustified absence; however, this is only a partial comparison, as it does not involve continued remuneration.

GERMANY

In Germany, there is no explicit statutory regime governing garden leave. The legal framework is derived from general statutory principles, in particular the employee’s general right to actual employment under §§ 611a, 613 in conjunction with § 242 of the German Civil Code and is largely shaped by case law. In practice, garden leave may be revocable or irrevocable: in the first case, the employer may call the employee back to work; in the second case, the employee is definitively released from the duty to work for the relevant period. Garden leave may also be ordered or agreed for a fixed period, for example until the end of the notice period or until completion of an internal investigation.

Garden leave is generally paid, meaning that the employer must continue to pay the employee’s regular remuneration during the release period. A unilateral unpaid suspension will generally require a specific legal and/or consensual basis.

2. Under what conditions can an employer unilaterally order garden leave?

ROMANIA

Garden leave may only be implemented where supported by a clear contractual or internal basis, provided that the principles of proportionality, good faith, and the employee’s rights arising from the individual employment agreement are respected.

In practice, its application must be properly documented and supported by objective business considerations, such as protecting confidential information and trade secrets, safeguarding IT systems, preventing unauthorised access, ensuring the integrity of internal investigations, avoiding interference with evidence, or maintaining business continuity and operational stability.

The employer should issue a clear written notification, define a fixed duration (typically until termination of employment), and ensure that the employee’s salary and contractual benefits are maintained throughout the period.

Some organizations also implement internal garden leave policies, setting out in advance the conditions, approval process and operational framework for its application.

From a health and safety (SSM) perspective, garden leave does not amount to a suspension of the employment contract. Accordingly, the employment relationship remains active, and liability and organizational control considerations should be addressed accordingly in internal documentation and contractual arrangements.

GERMANY

Unilaterally ordering garden leave requires a legitimate employer interest and a case-by-case balancing of interests.

Within the first requirement, the employer must be able to present concrete reasons that justify garden leave. A general wish to keep the employee away from the business is not sufficient. Three typical categories in which such an interest can be justified are the following:

Loss of the possibility to employ the employee due to reorganisation or lack of work;
protection of trade secrets and sensitive positions, especially where competitive activity or misuse of confidential information is a concrete concern;
disruption of the workplace or loss of trust, for example where there are concrete concerns about operational disruptions prompted by the employee or misconduct.
Within the second requirement, the employer’s interest in releasing the employee must outweigh the employee’s interest in being employed. On the employee’s side, relevant factors may include professional reputation, economic and personal interests, the opportunity to maintain or develop skills, and labour-market prospects. On the employer’s side, relevant factors may include lack of opportunities for continued employment, protection of confidential information, or concrete risks to business operations.

In many cases, garden leave is only justified if the employment contract has been validly terminated. If the employment contract remains in force or if an invalid notice of termination has been given, justified garden leave is generally only conceivable in limited exceptional circumstances – for example, during internal investigations prompted by strong suspicions of misconduct.

3. What are the legal implications of garden leave for remuneration and other benefits?

ROMANIA

There are no specific statutory rules governing remuneration during garden leave in Romania. As a general principle, the employee remains entitled to full salary, and any reduction without a clear contractual or legal basis may be challenged.

Variable remuneration depends on the contractual framework: discretionary bonuses may be withheld, while contractual or performance-based entitlements may continue to apply.

Annual leave continues to accrue, as the employment relationship remains in force. Company benefits are typically maintained or restricted depending on their contractual nature and purpose. In this context, certain benefits, including meal vouchers, may arguably be maintained even though they are associated with the actual performance of work, particularly considering that the employee’s release from duties results from the employer’s decision.

Garden leave is separate from post-termination restrictive covenants and does not replace non-competition obligations.

GERMANY

The employer must generally continue to pay the regular salary during garden leave. This applies regardless of whether the garden leave was justified.

Whether claims to variable remuneration exist during garden leave, can be hard to assess. Particularly in cases of unjustified garden leave, claims to variable remuneration can arise. Whether the same applies in cases of justified garden leave has not been settled by case law. The answer also depends on the bonus plan, the contractual wording, the type of variable remuneration, and whether the bonus is linked to personal performance, company performance, sales, or discretionary criteria.

Annual leave can be credited against garden leave if the employer grants holiday properly. In practice, this requires an irrevocable release and a clear statement that outstanding holiday entitlement is being credited. Whether garden leave is justified or not is not decisive in this regard; what matters is whether holiday was validly granted. A revocable release is generally not sufficient to satisfy holiday entitlement, because the employee must be able to use the holiday period for rest without having to expect a call-back to work.

A common source of disputes in relation to garden leave is the use of a company car. If the employee is allowed to use a company car privately, this private use is deemed as remuneration in kind. The employer may revoke private use during a justified garden leave period only if there is a valid contractual revocation clause on the company car.

4. In which situations do employers typically order garden leave?

ROMANIA

Employers typically use garden leave where continued presence of the employee in the workplace may create operational, legal or reputational risks.

This includes termination or exit processes, internal compliance or disciplinary investigations, and cases involving allegations of misconduct or conflict of interest, including unfair dismissal situations.

In practice, garden leave is typically used during the notice period, when the employer seeks to restrict the employee’s access to sensitive information, systems, clients, or internal teams while maintaining the employment relationship until termination.

Particular caution is required in situations outside the notice period, especially considering that the relevant provision of the Romanian Labour Code concerning unilateral suspension of the employment contract by the employer was declared unconstitutional. As a result, any garden leave measure that limits the employee’s access to work while maintaining the employment relationship should be assessed and documented with utmost care, on a case-by-case basis, in order to avoid the risk of the measure being interpreted as an unlawful restriction of the employee’s right to work.

It is also commonly used to protect confidential information and trade secrets, safeguard IT systems, and prevent unauthorised access to sensitive data or client relationships.

Typical scenarios include:

restructuring processes requiring workforce transition management during the notice period;
termination by mutual agreement, where the employment relationship continues until a future agreed date;
disciplinary or compliance investigations involving potential operational or reputational risks.

GERMANY

The most common situation is an ordinary termination, particularly where the employer’s need for the employee’s work has already ceased before expiry of the notice period. This is especially relevant in operational dismissal cases where the position has already ceased due to a reorganisation or lack of work. Other typical scenarios include:

Protection of trade secrets and customer relationships: Garden leave is frequently considered where the employee holds a sensitive role, has access to confidential information, or is expected to join a competitor.
Senior executives and key personnel: For managing employees, executives, or employees in strategic roles, the employer may have a stronger interest in limiting access to sensitive information or preventing disruption during the notice period due to their comprehensive knowledge of internal business matters.
Compliance investigations: Garden leave is further considered where there are concrete allegations of misconduct and the employer needs to secure evidence, prevent interference with witnesses or documents, or avoid further risks while the investigation is ongoing.
Conflict management and protection of the workplace: Where there are concrete concerns that the employee’s continued presence would disturb the workplace, intensify a conflict, or endanger business operations, garden leave can also be considered.

5. What options do employees have to challenge garden leave?

ROMANIA

Employees may challenge garden leave where it is imposed without objective and legitimate grounds or where it unilaterally restricts their right to work and normal professional activity.

In such cases, the measure may raise concerns of abuse and, depending on the context, may also be linked to risks of harassment, discrimination, or other forms of unfair treatment.

Employees may seek internal review, challenge the measure before the competent labour court, or notify the Labour Inspectorate or, where relevant, bring a complaint before the National Council for Combating Discrimination if the measure is alleged to be discriminatory. Remedies may include reinstatement of duties, payment of entitlements, or compensation for damages, including moral harm.

GERMANY

An employee can challenge unlawful garden leave by asserting the right to actual employment. This can be done by filing a claim for employment. In urgent cases, interim relief may be considered, particularly if the employee can show a special interest in continued actual employment, for example to maintain professional skills, market visibility, reputation, or client relationships.

In practice, however, employees rarely sue solely for actual employment. More often, disputes arise later in relation to the consequences of garden leave, such as loss of a company car, variable remuneration, or other benefits. Disputes can also arise in relation to the offset of annual leave entitlements.

CONCLUSION

ROMANIA

In conclusion, garden leave remains a useful employment management tool for protecting legitimate business interests during the transition period preceding termination. However, its application (particularly in sensitive contexts such as ongoing internal investigations) should be approached with caution, as it may attract increased judicial scrutiny. For this reason, it is advisable to resort to garden leave only where strictly necessary to prevent material prejudice to the employer, and where its use is clearly justified and appropriately documented.

GERMANY

In Germany, garden leave is an exception to the employee’s right to actual employment. It generally remains paid, and a unilateral release requires concrete, legitimate employer interests and a careful balancing of interests. For employers, the key points are to document the legitimate reason, choose the correct form of release, and expressly regulate salary, bonus, holiday, company car, non-compete obligations, and other benefits.

AUTHORS

Gabriela Ion is a senior associate at Suciu Employment Law with expertise in employment law, data protection, and corporate compliance, gained in top Romanian law firms.

She has advised Romanian and international companies on individual and collective employment matters, including restructuring and redundancies, employee investigations, Legal HR Audits, and international mobility. Gabriela also provides legal support on GDPR compliance and workplace privacy.

Sophia Hartmann is attorney at addworx with exertise in Dismissal protection law, International employment law, Employment and service contract law, Works constitution law, Collective bargaining law and Reference law.