What is unpaid leave and what are the impacts on taking it.

The Workplace Relations Team regularly receive queries relating to staff taking leave without pay (unpaid leave). Although this may seem like a necessary alternative for some staff depending on their individual circumstances, several factors should be considered and discussed before approving this type of leave.

Unpaid leave under the National Employment Standards
Unpaid leave is when an employee is absent from work without pay. It is most used when full-time or part-time employees have exhausted their paid annual or personal leave entitlements. For example, a full-time employee falls ill and has used up their personal paid leave entitlement but requires time off work. Alternatively, you may find yourself in a situation where permanent staff have paid leave available but have requested to use unpaid leave instead, essentially “saving” their paid leave. We recommend that staff use their accrued leave first and then move into a period of unpaid leave if necessary.

Paid leave entitlements are a financial liability for practices, so using paid leave  first is always the preferred option. Unpaid leave should be the last resort.

Taking unpaid leave can influence an employee’s continuous service and other paid leave entitlements. During unpaid leave full-tim and part-time employees do not accrue annual or personal leave. Depending on the length of the unpaid leave and the reason for it, this may also impact their long service leave entitlement. Not all staff are aware of this, and it would be worth explaining should they request to take leave without pay. 

There are exceptions that apply for certain types of unpaid leave including unpaid:

• parental leave
• carer’s leave
• community service leave
• compassionate leave (casuals only).
• ceremonial leave
• shutdown and/or standdown if applicable
• emergency leave

Employees taking unpaid community service leave for jury duty may be entitled to payment from their employer for the first 10 days.

In terms of exceptions that apply when calculating service for some National Employment Standard entitlements, unpaid leave that has been agreed by both the employer and the employee counts towards an employee’s continuous service for:

• an employee’s right to request flexible working arrangements
• unpaid parental leave and related entitlements 
• notice of termination or payment in lieu of notice.

For these entitlements, the entire period of employment will count as service except for any periods of unauthorised leave. 
 

Unpaid leave impacts on employees
Some employees may not have any other alternatives available to them when considering taking unpaid leave, but there could be long term impacts to them if unpaid leave is taken.

Financial burden
Employees on unpaid leave usually suffer financially because they need consistent income. This creates more pressure in challenging situations because of health, family, or other related problems.

Career disruption
Employees on unpaid leave for an extended period could face difficulty reintegrating back into the Practice. They may need to catch up with work or regain their relationships with team members, and their lack of knowledge with any Practice changes might be too high.

Emotional stress
Absence without pay is usually that time to cope with some distressing life incidents, such as caring for sick members of the family or facing a health crisis. These can all bring on emotional stress, which can be alleviated by employers who provide support during unpaid leave.

Job security 
Employees like to stay at work, but there is always a lurking threat of job insecurity. Employees may perceive their lengthy leave as threatening their job security within the practice.

Psychological and psychosocial
Financial burden, career disruption, emotional stress and job security are examples of the psychological impact on an employee who is on leave for an extended period. However, the psychosocial impact on their colleagues should not be forgotten. These impacts can be caused by ongoing roster changes, individuals working additional hours or the additional workload which has been delegated across the whole team during this time.  The Workplace Relations team has a Mindcare Pack for $40 which assists practices in having conversations around mental wellbeing with 100 per cent of the proceeds going to support R U OK? The pack includes:

• Mentally Healthy Workplace Handbook
• Communications Pack Instruction Guide
• Conversation Guide 
• 1 on 1 Guide
• Meeting Kit
• Activities
• Mental Health Planner
• Resources List

If you need any assistance determining when it is appropriate to use unpaid leave and the impacts this could have on the employee and the practice please contact  the Workplace Relations Team on 07 3872 2264 or email support at workplacerelations@amaq.com.au. 

AMA Queensland Workplace Relations Phone: 07 3872 2264  Email: workplacerelations@amaq.com.au