Your employees might decide to take unpaid leave to deal with unexpected problems. Caring commitments and career breaks are two of the most popular justifications.
Although there is minimal law surrounding unpaid leave, most employers and HR leaders rely on the Employment Rights Act 1996 when dealing with this matter. Even then, the law varies depending on the reason.
As an employer, you must be aware of employment laws and employee rights revolving around unpaid leave. If not, you may face a fine or be called to tribunal courts.
In this guide, we'll go through the various types of unpaid leave and everything an employer must know about it.
What is unpaid leave?
Unpaid leave is when an employee has taken time off work, which they will not receive payment for. It's a way for employers to allow them to take leave without using up their paid leave benefits.
You should grant time off to your employees during these specific cases. Like, when they needed to care for a dependant. You can choose whether to offer leave as paid or unpaid. However, many employers pay them for this time.
In other cases, like when taking a career break or wanting to travel, you have the right to refuse your employees' requests.
Remember, granting unpaid holiday leave is not a legal requirement. An employee may ask for it if they’ve used up all of their paid holiday.
UK law on unpaid leave
In the UK, there is no actual employment law regarding unpaid leave. Instead, employers must comply with the Employment Rights Act 1996.
Under the act, employees may take reasonable time off work. These might include:
During unpaid time off, an employee's rights to pay, holidays, and returning to work are protected.
Can an employer force an employee to take unpaid leave?
Yes, but you can only force them to take unpaid leave if their employment contract states so.
Employees can also take temporary leave or ‘lay-off’, which is paid for, subject to the statutory maximum. It occurs when a company does not have enough work available, so they may ask an employee to stay at home.
Here, if the temporary leave is unsuitable, an employee has the right to cancel their contract and request redundancy pay. This can only occur under these conditions:
- If they’ve been laid off for more than four weeks in a row.
- If they’ve been laid off for six consecutive weeks in a thirteen-week period.
- If they’ve earned less than half a weeks’ normal pay.
To be eligible for a redundancy payment, the employee must have two or more years of continuous employment with the business.
Can an employer refuse to give unpaid leave?
Yes, in some situations, an employer has the right to refuse an unpaid leave request. For example:
- During a career break or sabbatical.
- For general healthcare, like medical check-ups or a dentist appointment.
- To study or train for something unrelated to the business.
When it comes to training, you are legally required to consider their request before denying it. Eligible employees must have at least 26 weeks of service and must work for a company that employs more than 250 people to qualify.
Common reasons for unpaid leave
Employees may seek unpaid leave for a variety of circumstances. For example:
- Public duties: This includes magistrates, members of a local councillor, school governor, or a board of prison visitors. Magistrates must take at least 13 full days or 26 half days off every year.
- Jury service: You are legally required to permit time off for jury service unless their absence would seriously be detrimental to your business. If you do not allow their jury duty, you may face a fine or possibly be found liable in court.
- Family emergency: This is also known as ‘dependant leave’. Employees may need to spend time at home for emergency situations relating to close family members,
- Unpaid parental leave: This type of leave is normally used by employees with newborn babies or children under 18.
- Compassionate leave: This is when an employee takes time off due to facing an emotional situation, like a close relation falling sick or even passing away. Compassionate leave doesn’t have to be given as paid leave. However, some employers choose to provide pay even though it’s not a legal requirement.
How to manage unpaid leave
HR leaders should note that having a comprehensive unpaid leave policy is one of the best ways to manage this in the workplace. This will lead to creating a positive company culture. There would be no room for confusion about leave, and everyone will be aware of their rights.
An unpaid leave policy should be included in all employee contracts and handbooks. In the policy, you should outline the following:
- The circumstances that employees can take unpaid leave.
- The number of leave days they can take.
- The amount of notice they'll have to give.
- The sort of arrangements they'll have to make to minimise inconvenience.
There is no legal notice period required for unpaid leave requests. Your policy should outline the length of notice the employee needs to provide before the intended start date. Many companies offer extended time off for workers with a longer tenure.
Another thing to consider when managing unpaid leave is offering flexible working hours to employees. This can help reduce the number of unpaid leave requests and employee absence rates.
How many days of unpaid leave is an employee entitled to?
There is no legal limit or minimum amount of unpaid leave from work for UK employees to take. Requirements vary according to the reason for the unpaid leave.
There is no right to indefinite unpaid leave in some cases. Such as when you have allowed employees to take unpaid leave and there is no legal right for them to do so.
How much unpaid parental leave can an employee take?
Eligible parents have a statutory right to take 18 weeks of leave for each child and adopted child up to the age of 18. They can take this type of unpaid leave to share their time off work following their child's birth or adoption. A maximum of four weeks is allowed in any one calendar year.
The employee must be the child's parent and have been employed by you for at least one year. They should not be a foster parent unless they've secured parental responsibility through the courts.
Employees should confirm the start and end dates whilst making the request. If you want to delay their leave, you must share your reasons within seven days of the original request. You should include a revised start date within six months of the requested start date.
There are different rules when maternity or paternity leave and unpaid parental leave are involved. Maternity and paternity leave allows employees to take time off on a paid basis in the first year of their child's life. Unpaid parental leave lets employees take unpaid leave for meeting their children's certain care needs when they get older.
Get expert advice on unpaid leave
As an employer, you must provide your employees with a reasonable amount of unpaid leave. Building an unpaid leave policy and noting it in the employment contract is a great way of outlining what an employee is entitled to in your business.
This contributes to more equitable treatment of every employee entitled to take time off without pay. If you lack appropriate understanding in this field, you should seek legal advice.
If you need further support, Peninsula can offer you expert advice around unpaid leave. Our HR professionals offer 24/7 HR advice 365 days a year, with fully trained counsellors ready to help. Contact us on 0800 029 4389