Understanding leave without pay

Most employers have a pretty good sense of annual leave and personal leave, but what about leave without pay? It’s one of those quirks that can need a little more explanation.

There are few specific provisions for leave without pay under legislation. As a result, leave without pay is usually governed by internal policy.

So, when might an employee take leave without pay? Typically an employee would take leave without pay when they have exhausted their other leave provisions. This might be for an extended period (say, a career break) or shorter periods (say, a day of carer’s leave or extending annual leave for a few days beyond their accrued leave). Employees may be entitled to apply leave without pay at other times, as agreed with the employer.

Unpaid parental leave is slightly different. Under the Fair Work Act, employees with twelve months’ continual service can take up to 52 weeks’ unpaid parental leave. This can be extended by a further 52 weeks.

There are a couple of important considerations when developing your leave without pay policy. First, an employee does not typically accrue sick leave and annual leave when they are on leave without pay. They will, however, continue to accrue long service leave, as leave without pay does not interrupt continuity of service.

iHR Australia offers a full range of HR services, including policy and procedure support. Contact us for guidance on developing your leave without pay policy and benefit from up-to-date expert advice.