The colloquial British-English phrase gardening leave denotes: suspension from work on full pay for the duration of a notice period, typically to prevent an employee from having any further influence on the organisation or from acting to benefit a competitor before leaving.

The phrase gardening leave occurs, for example, in the following from Sue Gray ¹ cleared to take up Labour job this autumn, by Ben Quinn and Pippa Crerar, published in The Guardian (London and Manchester, England) of Tuesday 6^th June 2023:

The former civil servant Sue Gray has been cleared to take up her new role as Keir Starmer’s chief of staff in the autumn after a vetting board rejected calls for her to have a much longer period of gardening leave.
Gray, who led the investigation into Partygate last year, took ministers by surprise with her plan to quit the civil service and work for Labour. The announcement triggered an inquiry and an expectation that restrictions would be placed on when she could take up the role and what she could do.
However, the Guardian understands that the government’s appointments watchdog will say she should wait for six months, rather than the maximum two years it can recommend for senior officials.

¹ As Second Permanent Secretary in the Cabinet Office from May 2021 to March 2023, Sue Gray led an investigation into the scandal known as Partygate (i.e., the parties and other gatherings of government and Conservative-Party staff that took place during the COVID-19 pandemic in 2020 and 2021—cf. origin of ‘kunlangeta’ (as applied to Boris Jonson).) Sue Gray resigned from the Civil Service in March 2023 to work as Chief of Staff to the Leader of the Opposition, Keir Starmer.

In the phrase gardening leave, the image is that the employee who is suspended from work can spend time at home pursuing hobbies, such as gardening.

The texts containing the earliest occurrences of gardening leave that I have found indicate that it originated as a British-Army informal phrase for a paid leave between the end of one posting and the beginning of another. These early occurrences are as follows, in chronological order:

1-: From The Daily Telegraph (London, England) of Tuesday 5^th June 1973:

PRINCESS LOSES HER SECRETARY AND EQUERRY
DAILY TELEGRAPH REPORTER

PRINCESS MARGARET’S private secretary and equerry for two-and-a-half years, Lt-Col Frederick Burnaby-Atkins ², 52, has left her service, it was revealed yesterday.
[…]
He stressed that he had left the Princess on excellent terms. “I didn’t resign or anything like that.
“When one has been in the Army for 30 years one gets used to changing one’s posting every two and a half or three years. Princess Margaret and I talked about things and we gradually came to an agreement that it was a good idea to have a change.
“I am having what in the Army is called ‘gardening leave’—rather a good time of year for gardening leave. I shall be going away to fish in the north of Scotland in July.”

² Lieutenant-Colonel Frederick John Burnaby-Atkins (1920-2012).

2-: From the Daily Mirror (London, England) of Wednesday 6^th June 1973:

Down to earth, but out of work

LIEUTENANT-COLONEL Frederick Burnaby-Atkins walked out of his job as Secretary to Princess Margaret yesterday and immediately enriched the English language.
He said: “I am having what in the Army is called gardening leave.”
The Army explained: “It means someone who has a gap between ending one appointment and taking another.”
That’s what actresses call resting. The rest of us just admit we are out of work.

3-: From a letter to the Editor, published in The Times (London, England) of Friday 22^nd May 1981—With thanks to Gerald Cohen, professor of foreign languages at Missouri University of Science and Technology, Rolla, Missouri:

Base suggestion
From Mr O. B. Warman
Sir, although I am a retired soldier I can applaud your leading article on defence in The Times today. But may I suggest that it is not the teeth of Rhine Army that need cutting: it is those expensive monoliths HQ 1 Br Corps, HQ Rhine Area and HQ BAOR. In wartime Burma Field Marshal Slim managed to command his army with a small, mobile, fit nucleus of comparatively junior officers: there are all too few of these at any of the HQs mentioned.
Maybe there are some more candidates for the necessary axe who, by their going could save, say, one or perhaps two battalions of Marines now facing disbandment. There are too many senior officers on permanent “gardening leave”. There are too many civil servants in the Ministry of Defence and, finally, there are far too many officers employed in posts where a daily output of paper is more important than a useful and essential contribution to the efficiency of the teeth arms.
The tail now wags the dog and has been doing so for far too long: will nobody cut it off?
I have the honour to be, Sir,
Your obedient servant,
O. B. WARMAN,
Ashley House,
Heathfield Road,
High Wycombe,
Buckinghamshire.
May 19.

4-: From ‘Value for money’ studies by senior Army officers, by Major-General Edward Fursdon, published in the Daily Telegraph (London, England) of Thursday 5^th January 1984:

Many senior officers, who might otherwise have been spending the gap in time between their successive appointments at home, on what is popularly known as “gardening leave,” are now being given important studies to conduct which supplement those already being undertaken by the Army Board.

5-: From the Daily Telegraph (London, England) of Saturday 2^nd February 1985:

Mrs THATCHER ³ GAVE ME HELP, SAYS PONTING ⁴
By IAN HENRY Old Bailey Correspondent

CLIVE PONTING, the civil servant accused of breaching the Official Secrets Act by a leak of Ministry of Defence documents, claimed at the Old Bailey yesterday that Mrs Thatcher had personally intervened to promote his Whitehall career.
[…]
Ponting, 38, who admitted sending two documents on the sinking of the Argentine cruiser General Belgrano to Mr Tom Dalyell, Labour MP for Linlithgow, told the jury he had been looking forward to advancement within the Civil Service after being awarded the OBE for an efficiency programme under the command of Sir Derek Rayner.
‘Gardening leave’
But then he had a spell of what he described as “gardening leave,” Civil Service jargon for a paid leave while a job could be found for him.

³ Margaret Thatcher (1925-2013), Prime Minister of the United Kingdom from 1979 to 1990.
⁴ The senior British civil servant Clive Ponting (1946-2020) leaked documents about the sinking of the Argentine cruiser General Belgrano by the British in the Falklands War in 1982.

Remark: The phrase gardening leave has occasionally been used in the literal sense of time away from work specifically granted for gardening. The following, for example, is from We’re getting to grips with our garden, by Kate Watson, published in the Derby Evening Telegraph (Derby, Derbyshire, England) of Wednesday 11^th December 1974:

“EVERYBODY,” said my husband, “should be granted ten days’ compassionate gardening leave when they move.”
He was gazing down the length of our newly acquired—er—wilderness The neighbours assure us the previous owners only spent a couple of days working out there. We believe them.

The earliest occurrence of the variant garden leave that I have found is from Rules that can put the brake on career moves, by Ian Hunter, published in The Independent (London, England) of Sunday 8^th September 1991—Robert Walters was the managing director of recruitment consultants Robert Walters Associates:

Given the hazards and uncertainties associated with restrictive covenants, a more subtle form of restriction, known as garden leave, has become increasingly popular.
A garden leave clause requires an employee to give a long period of notice and goes on to state that the notice period must be served out at home. By this method the employee is precluded from taking other employment during the notice period. The employer’s objective is to ensure that the employee loses contact with his customers and ceases to have access to time-sensitive information long before he leaves his job.
Robert Walters confirms that putting employees on garden leave is his company’s preferred option when seeking to protect its confidential information.
A court considering a breach of a garden leave clause must weigh up two factors: the danger posed to the employer’s business by a breach of the clause, and the problem the employee may face if the skills he has acquired are impaired during a period of enforced idleness.