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Unpaid Leave: Everything You Need to Know

The laws about paid leave in the UK are clear. However, when it comes to unpaid leave, things can get a little more complicated. In this post, we will discuss the various types of unpaid employee absences and the regulations surrounding them. We will also look at best practices for managing unpaid time off in your company.

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Unpaid Leave Meaning

Full-time employees are entitled to a minimum of 5.6 weeks of paid leave each year, known as statutory leave entitlement. Employees are also entitled to paid sick leave, maternity leave (up to 39 weeks) and paternity leave (up to 2 weeks). Any other days off where employees are not entitled to statutory pay is known as unpaid leave.

An employee can request an unpaid leave of absence for many reasons including family emergencies, medical appointments, and caring for dependents. Although there is no legal obligation to pay employees for non-statutory time off, many companies choose to offer it in certain circumstances. If this is the case, then you need to make sure you clearly define all guidelines in your employee handbook so that employees are clear on their rights. You also need to specify whether non-statutory time off will be paid or not. This will help you protect your company against any disputes or claims of discrimination.

When Is an Employee Entitled To Take Unpaid Time Off?

There are a number of cases where an employee is entitled to take unpaid leave:

  • Parental leave: time off to care for a child’s welfare (in addition to paid parental leave). Employees might request it to care for their children, to look at schools or to manage childcare arrangements. Employment rights are protected during unpaid parental leave.
  • Dependent leave: time off to deal with an emergency involving a dependent (child, grandchild, parent, spouse, etc.).
  • Public duties: if an employee is a local councillor or school governor, for example.
  • Compassionate and/or bereavement leave: time off following the death of a loved one.
  • Jury duty: time off when an employee has been called for national jury service. If you fail to release an employee for jury duty then you could incur a fine for contempt of court.
  • Medical appointments: as an employer, you can choose to insist that employees arrange medical appointments outside of working hours. However, there are two exceptions you need to keep in mind. Firstly, if an employee is pregnant then you must approve any requests for time off relating to antenatal care. Secondly, if an employee has a disability then you must approve any time off requests for medical reasons.

Unpaid Leave and UK Law

There are very few legal provisions when it comes to unpaid leave rights in the UK. Generally speaking, it is at your discretion. However, there are a few legal considerations that you need to keep in mind.

The legislation most employers refer to when dealing with unpaid leave is the Employment Rights Act 1996 (ERA). Under the ERA, your employees can take reasonable time off work to carry out certain duties. This includes caring for a dependent who is ill or injured. It also includes time off for performing public duties, and the right to unpaid time off to attend adoption appointments. Additionally, under the ERA, UK employees have a statutory right to up to 4 weeks of parental leave each year. When it comes to bereavement leave, employees have the right to time off for emergency situations, including the death of a dependent. An employee’s rights to pay, holidays and returning to a job remain protected during unpaid time off.

Why Would Employees Want To Take Unpaid Time Off?

There are many reasons why an employee would choose to take time off without pay. Common examples include:

  • The birth or adoption of a child
  • To care for a child or other dependent
  • To undertake public duties (such as jury or magistrate duties)
  • Personal or family health problems
  • The loss of a loved one
  • A career break
  • To improve their work-life balance
  • To settle children into new childcare arrangements or to look at schools
  • Time off to study
  • To spend more time with family
  • Medical appointments

There is no legal requirement for you to authorise time off for medical appointments or funerals. However, you might choose to be flexible and accommodate the needs of employees when justified. This can help you create a positive work environment where employees feel valued and trusted.

How to Manage Unpaid Leave In Your Business

If an employee makes a request for unpaid time off then it is usually a good idea to accommodate them. The only exception is if it is an unreasonable request or it has a negative impact on business operations. This will help you build a supportive corporate culture based on trust and transparency. It will also show your employees that you care about their health, wellbeing and personal circumstances. You should always judge each request for unpaid leave on its merits. However, you also need to ensure there is consistency with all employees to avoid any potential discrimination claims.

As we have seen, most requests for unpaid time off are not governed by law. It is therefore vital that you define a clear unpaid leave policy in your company. You should outline all employee rights relating to non-statutory time off, and clarify if leave will be paid or unpaid. How much notice do employees need to give? What is the process for requesting unpaid leave? Is there a limit to how much unpaid leave an employee can take each year? What arrangements will they need to make to minimise disruption? Make sure you include your unpaid leave policy in all employee contracts and handbooks. That way everyone is clear on their rights.

Finally, you need to implement a system for managing unpaid time off. Factorial’s absence management software can help you effectively manage unpaid leave in your business. Employees can request and manage time off requests from their devices. Managers can then approve or reject requests through the web platform. You can also use the tool to create custom reports. This data will help you make better decisions for the good of your business.

Try out Factorial’s Holiday and Absence Management Feature and Receive your 14 day Free Trial!

Written by Cat Symonds; Edited by Carmina Davis

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