It is an expression that I have known to be used to describe a suspension from work. The lower orders are suspended. Important people get gardening leave.
It also relates to the time after redundancy etc where you are tied into NOT working. A lot of execs leave with big fat golden handshakes on the condition that they don't work for anyone for a certain length of time. Hence they get a chance to do the garden!!
It can also mean that a person serves notice from their job at home rather than working their notice. This usually happens when going to a job with a direct competitor.
Once an employee hands in their notice and they are (1) going to a competitor, (2) have been generally disruptive by raising unnecessary grievances, etc, or (3) likely to sabotage a project or product, then the employee imposes Garden Leave where, although the employee is still in the employ of the employer for the notice period, they do not report for work.