Unpaid Leave

Often an employer will receive a request from an employee to take time off and because they do not have any accrued leave entitlements, they ask for unpaid leave, or what is leave without pay. This may be for a number of reasons such as personal or family reasons, study or overseas travel that was pre-booked by a new employee.

There is no obligation for an employer to grant the leave unless it is provided for in an award, enterprise agreement or contract of employment. It is up to the employer to agree as to whether the request will be granted and will often be dependent upon business and operational requirements particularly where seasonal demands require the employee to be at work.

However, there are a number of statutory provisions allowing for leave without pay and these are set out in the National Employment Standards. These legally enforced periods of leave without pay are unpaid parental leave, unpaid carer’s leave (when paid leave has been exhausted), unpaid community service leave (again when paid leave entitlements have been exhausted), or unpaid compassionate leave (which is only for casual employees).

When deciding whether or not to grant unpaid leave it is important to be consistent, that is, not treat an employee differently to other employees to maintain fairness. As indicated, though there is no obligation to agree to the unpaid leave, it is best to follow a consistent approach and look at the reason for the request, the operational needs of the business, the length of the leave, and the impact the leave will have on other workers that may have to take up the work.

When an employee is on unpaid leave it is generally the case that they do not accrue entitlements. That is, they do not accrue annual leave or personal (sick) leave during their absence.

If you do agree to the employee taking unpaid leave it should be recorded in writing setting out the period the employee will be away from work, the start and return dates and confirmation that leave entitlements will not accrue.

If you have any questions about unpaid leave contact Andrew.