how-to-run-a-small-business

What is Unpaid Leave?

Everyone understands the idea of paid leave – this is simply your employee’s annual holiday allowance. Unpaid leave, however, is a little more complicated. Unpaid leave doesn’t count against an employee’s annual leave allowance, but allow employees to take time out of work without pay for a variety of other reasons.

‘Unpaid leave’ is a very wide concept – so let’s break it down.

What is unpaid leave?

Unpaid leave can mean a few different things, depending on the context. Let’s take a look at some of the most common usages:

First of all, there are a couple of types of unpaid leave that are offered at particular points of an employee’s life. For example, every employee in the UK is entitled to a certain amount of unpaid parental leave once after they have become a parent.

Another type of unpaid leave is bereavement leave, which is taken after an employee has suffered the loss of a loved one so that they can grieve or spend time with family.

Then there is what you might call a ‘work sabbatical’ or a career break. The work sabbatical is a relatively new development in the UK – it describes an arrangement where an employee takes an extended period of time off from work, on the understanding that they return to their jobs afterwards. In the interim, the employee will retain their employment status, along with any benefits.

What’s the law on unpaid leave?

As you can see from the section above, unpaid leave is a pretty wide-ranging concept. There are no hard and fast rules on unpaid leave, simply because every type is slightly different.

Next, we’ll try to unpack the law surrounding the many different types of unpaid leave

What’s the law on work sabbaticals

First things first – there is no legal UK entitlement to a work sabbatical or career break. If one of your employees wants to take a career break, then they will need to discuss and agree on the exact arrangements with you, their employer. You aren’t bound by any legislation to consider or agree to a request for a work sabbatical

What’s the law on unpaid parental leave?

However, unpaid parental law is a different story. All UK employees have a statutory right to 18 weeks of unpaid leave after they have become parents (or adopt a child).

These 18 weeks are available to be taken up until the child’s 18th birthday, with a maximum of four weeks permitted over any one calendar year.

It’s important to note that parental leave applies to each child, not each job. So if a new employee is asking if they can take unpaid parental leave, it’s worth checking with them to see how much of their allowance they have left for that year.

What’s the law on bereavement leave (or compassionate leave)?

The law around bereavement leave is a little less clear cut. Unlike parental leave, there is no designated UK legislation designating a specific right to bereavement leave (or ‘compassionate leave’). However, the Employment Rights Act 1996 does give employees the right to take time off for emergency situations – and that includes the death of a dependant.

What’s the law on unpaid leave for taking care of dependants?

All employees in the UK are entitled to take time off if they need to take care of dependants – taking a child to the doctor, for example. There is no legal limit to how much unpaid leave an employee can take off for this, but they do have a duty to give you as much warning as can be reasonably expected.

Going beyond the law

The specific law surrounding the many different types of unpaid leave can be difficult to keep track of (if you really do need a precise legal answer, maybe we can help here).

Often, the benefits to you as an employer for simply being flexible around unpaid leave far outweigh the negatives.

Your employees are unlikely to ask for unpaid leave unless they really need it – and in that case, there might not be any great reason to stand in their way. If you are flexible and understanding of your employees’ life circumstances, then the goodwill that engenders will often pay you back twice over.

Work sabbaticals are a great example of this. Sure, career breaks are not protected by any UK legislation, but before you dismiss any such application out of hand, ask yourself this:

Is there any reason not to offer career sabbaticals? Of course, in some industries it won’t be an option, but in many it might well be possible. Are you able to turn a provision for unpaid career breaks into a competitive advantage when it comes to recruitment? Could you drastically improve your company’s morale by adopting a more flexible approach to unpaid leave?

To finish

Unpaid leave is a wide topic. So by all means, get acquainted with the law – but if you’re running a small business then time is a precious resource, and perhaps a little flexibility is the simpler answer.

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