# Leave in lieu of notice Official source: https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/leave-in-lieu-of-notice Scanned: 2026-06-07T03:31:31.402Z Use this as a current official guidance reference, not as a substitute for legal advice. ## Page Text Home Leave and holidays Other types of leave Leave in lieu of notice Other types of leave Leave and holidays Public holidays Annual holidays Sick leave Bereavement leave Parental leave Family violence leave Jury service leave Employment Relations Education leave Time off to vote Defence force volunteers Other types of leave Leave without pay Long service leave Leave in lieu of notice Leave during and after a natural disaster Everyone Leave in lieu of notice In certain situations – such as when an employee resigns, or there are relationship difficulties – leave in lieu of notice may be agreed to. What is leave in lieu of notice? While not referred to in employment legislation, ‘leave in lieu of notice’ An agreed period when an employee remains employed and receives full pay but does not go to work. is a term used to describe a period when an employee Any person, whatever their age, who is employed by an employer to do any work for hire or reward under a ‘contract of service’ (commonly called an ‘employment agreement’). remains employed, and receives full pay, but does not report to work. It's sometimes known as 'garden leave'. This type of special leave might be used when an employee resigns, when there are relationship issues in the workplace, or when a permanent employee has no work to do. Leave in lieu of notice can be useful, but before it is taken, both employer An individual or organisation that hires 1 or more employees and contracts them to work in exchange for wages or salary under a ‘contract of service’ (commonly called an ‘employment agreement’). and employee must agree to its use. This agreement must include leave in lieu of notice provisions in the employment agreement A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement. , entered into in good faith An underlying principle in employment law which requires employers and employees to deal with each other honestly, openly, and in a fair and timely way. . Good faith While on leave in lieu of notice, employees must continue to follow the terms and conditions of their employment. This includes any lawful restrictions on working for another employer. Leave in lieu of notice should not be used to get around the requirements for suspension Removing an employee from the workplace for a period of time and for a specific reason. A suspended employee usually receives full pay. It is not the termination of their employment, and they are not on annual holidays or sick leave. . Appropriate grounds for suspension, and the right process, must be followed instead. Leave in lieu of notice provisions Provisions for leave in lieu of notice in employment agreements A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement. may be general or specific. With any provision, the employer must act fairly and reasonably when enforcing them. Specific clauses might state that the employer may direct an employee not to report to work, undertake work-related duties or contact clients, customers or suppliers during their notice period (but that the employee will receive their full pay for this time). General clauses might give the employer the ability to direct an employee not to report to work or do work-related duties at any time and for any reason (but the employee will receive their full pay for this time). Leave in lieu of notice during notice periods If an employee resigns When an employee tells their employer they will be leaving their job. , an employer might want to use leave in lieu of notice during their notice period The amount of time between giving notice and the date the employment relationship ends. for a variety of reasons. For example: The employee has access to commercially sensitive information and is going to be working for a competitor at the end of their notice period. Any limit of trade provision would take effect after the employee’s employment ends. However, employers should be aware that if an employee’s employment agreement contains both a leave in lieu of notice provision and a restraint of trade provision, the period the employee is on leave in lieu of notice may be taken into consideration in working out if the restraint of trade provision is reasonable (and therefore enforceable). The restraint of trade provision takes effect after the end of the leave in lieu of notice period. The employee is distracting other workers while they’re in their notice period. The employee is being made redundant When an employee’s employment is terminated because their position has become surplus to the requirements of the business. Employers must follow a proper and fair process and consider redeployment options before making any positions redundant. and the employer is not requiring them to report to work during their notice period, so they can look for other job opportunities while they can still say they’re currently employed. The employee has been dismissed on notice and their presence is creating an uncomfortable atmosphere for everyone. The employee has no work to do. There is a difficult (but not disciplinary) relationship situation at work and the employer considers that it would help in taking heat out of the situation if 1 (or both) of the parties did not attend work while the parties go through counselling. In this type of situation, the employer would need to make sure that the employee agrees so it is clear they’re not being suspended or punished. Final pay Requesting leave in lieu of notice While there is no obligation for the employer to accept a request for leave in lieu of notice, situations where an employee may request it include if they: are being made redundant or dismissed on notice, so they have more time for job searching have resigned and do not want to be at the workplace during their notice period for professional or personal reasons are being investigated for a disciplinary matter and want to avoid being formally suspended. In this case, an employer will have to make sure they’re treating employees in similar situations consistently. Disciplinary process Alternatives to leave in lieu of notice There are other options employers can consider, instead of leave in lieu of notice. These include: Placing the employee on alternative duties. Payment in lieu of notice (which ends the employment right away). Published: 11 March 2024 Last modified: 13 January 2025 Written for: Everyone Share this page: Print this page: