Requesting and taking unpaid leave

When an employee puts in a request to take leave without pay (LWP) or unpaid leave, especially if it is the first time you have received such a request, you may find yourself asking the following questions: 

• Under what circumstances can an employee apply to take unpaid leave?
• Can I refuse an unpaid leave request?
• Are there any pitfalls with taking unpaid leave?

Circumstances
Employers have legal obligations under the Fair Work Act 2009 related to particular types of unpaid leave. These are generally related to caring responsibilities, family emergencies or community service duties. 

Outside of the above legal obligations, unpaid leave is most commonly used when full-time or part-time employees have exhausted their accrued paid annual or personal leave entitlements, and these are the situations addressed in this article. 

The Fair Work Act 2009 and the National Employment Standards (NES) outlined the leave entitlements an employee has and if applicable any provisions set down for unpaid leave under the NES as well as under the relevant award they are classified under. If your practice is a Toolkit subscriber, then the kit has a Fact Sheet relating to leave entitlements.

What are some of the reasons for taking unpaid leave? There are many situations where an employee may apply for unpaid leave, such as:

• physical or mental health, if personal leave has been exhausted
• extended holidays beyond their annual leave allocation
• to run a personal errand
• to run an errand for a family member or friend.

Can I refuse an unpaid leave request?
If an employee has used all their paid leave entitlements or any unpaid leave entitlements do not apply, then it will be up to you to approve the request or not. The request must be given in writing by the employee just like any other leave request and responded to in a timely manner. 

You should ask yourself the following questions when considering approving the request such as:

• length of service of the employee
• the validity of the reason for requesting unpaid leave
• the timing of the request, eg has sufficient notice been given or would approval of the request be detrimental to the smooth running of the practice. 

You should also consider however that there may be benefits to the employee as well as the practice if a request for unpaid leave is approved. Such as:

• the time off may be very beneficial to the employee and will allow them to perform to the best of their ability on their return.
• if the practice is having some quiet time then this may be financially beneficial 
• it could improve the culture within the practice as well as staff engagement and employee retention.

Pitfalls of taking unpaid leave
There are downsides to taking unpaid leave which employees may actually not be aware of so it is important that you make them aware of these when they are considering a request to take unpaid leave. The downsides include:

• permanent employees will not accrue paid leave such as annual leave or personal leave on leave without pay
• depending on the length of the unpaid leave, it may also impact continuous service or long service leave.

A Leave Policy is a great way to set expectations within the practice on when it is applicable or appropriate to put in a leave request for leave without pay. An accompanying procedure will ensure a consistent, fair and equitable process for all applications.

Workplace Relations Toolkit subscribers receive a Leave Policy as part of their subscription.

If you would like any guidance on implementing a leave policy or would like any further advice on unpaid leave requests, please give us a call on 07 3872 2264 or email us at workplacerelations@amaq.com.au