Unpaid leave is where an employee takes time off from their job without pay. In some situations, as in the case of time off to care for a dependent in an emergency, you must grant the time off, although you can decide whether it is paid or unpaid. In other situations, such as a request for a career break or travel, you have the right to refuse the request.
While unpaid leave requests may come from the employee, the coronavirus crisis is seeing employers consider their workforce options, which may include considering unpaid leave.
This guide summarises the rules on unpaid leave and the employment law risks employers need to be aware of.
Can an employer require an employee to take unpaid leave?
In some circumstances, an employer can require an employee to take unpaid leave, but only where there is a section in the employee’s contract of employment expressly providing for this. It is called ‘laying off’ and occurs where the employer does not have enough work for the employee to do, so asks them to stay at home.
If an employee is laid off for more than four weeks in a row, or six weeks in a thirteen week period where no more than six weeks are consecutive, they will be entitled to consider their employment contract to be terminated and to apply for a redundancy payment. In order to be eligible for a redundancy payment, the employee will have to have two or more years of continuous service with the employer.
An employer can also suspend an employee from work on medical grounds, i.e. require them to stay at home for a medical reason, under section 64 of the Employment Rights Act 1996. However, if you do this, you have to pay the employee for a period not exceeding twenty six weeks. If you provide the employee with work to do at home, then they will no longer be considered to be on medical suspension.
Unpaid leave due to coronavirus
It is possible that you will need to ask your employees to stay at home, either because someone in the office has had coronavirus so everyone else needs to stay away, or because the employee themselves has symptoms which might make them contagious (even if they are well enough to come to work). This is known as self isolating.
Where an employer asks employees to stay at home
Where employees have to stay at home even though they do not have Coronavirus, the most obvious solution is to try to equip them to work from home. In this way, the employees still qualify for full pay. If it is not possible for an employee to do their job at home, and their workplace is closed, then you do not have to pay those employees.
However, responsible employers should consider the possible legal, reputational and moral ramifications of paying staff whose jobs enable them to work from home, but not those who have to be physically present in work, for example, cleaners. Employers should also check government guidance frequently as it is constantly being updated.
Employees who are self isolating
If an employee is self-isolating at home because they have the virus, then you should pay them in accordance with the sick pay policy of your organisation. Employees should not be asked to take unpaid leave if they are self-isolating. The principal reason for this is that an employee is far less likely to self-isolate if they know they will not get paid, thus risking infecting more employees and potentially costing the employer, and society, more in the long run.
When can an employee take unpaid leave?
There are, broadly, three categories of unpaid leave:
- Unpaid leave that you have to grant by law
- Unpaid leave that you have to consider by law
- Unpaid leave that is entirely discretionary
An employee must be allowed to take unpaid leave in the following circumstances:
- Selection for jury service
- Where they are a magistrate, reasonable time off to carry out their duties
- To deal with an emergency involving a dependent; and
- To spend time with a child under 18 (known as parental leave), subject to certain conditions being met.
Unpaid leave that you have to consider by law:
- A request for training or study under section 63D of the Employment Rights Act 1996.
Unpaid leave that is entirely discretionary:
- A career break or sabbatical
- Appointments with the doctor or dentist (unless the employee is pregnant in which case you have to allow paid time off for ante natal appointments)
- Compassionate leave; and
- Bereavement leave.
How many days unpaid leave it an employee entitled to?
The number of days of unpaid leave to which an employee is entitled depends on whether or not you are obliged to give the time off in the first place.
Where the employee is not entitled to take unpaid leave
In the case of unpaid leave that is entirely discretionary, you can decide whether to give this leave at all and if you do, how much.
It is strongly recommended to have a policy in place clearly setting out your employee’s rights, because it is not set out in law.
For example, your organisation might have a policy on unpaid leave that includes a right for an employee with over ten years of service to apply for a career break of up to twelve months in length. This can be a real incentive to retain good people.
You can choose whether an employee on a career break retains any rights under their employment contract, for example to a pay increase. However, a year is a long time, so the policy needs to make clear that there could be no job for the employee at the end of their career break, and that they have no rights to sue you in this scenario.
The same policy should also cover an employee’s right to time off for doctors’ and dentists’ appointments. You may decide to allow one of each per year, for example. It us up to you, based on the needs of your organisation.
In the case of compassionate leave, this can be set out in a policy, but could also be left to managerial discretion. It is possible that if you do not allow paid time off for compassionate reasons, an employee may visit their GP to be signed off sick, if your company’s sick pay is more generous.
Where the employee has the right to take unpaid leave
In the case of time off that you have to grant by law, again, the reason for it will be the key.
For jury duty, you will have to allow the employee to be off work for as long as they are required to serve as jurors. Employees who are also magistrates will need to be off work for at least 13 full days or 26 half days per year. It is not obligatory to pay your employees during this time, but many employers do.
In the case of other public duties, such as being a local councillor, a member of a prison visiting board, or a school governor, you are required to allow a ‘reasonable’ amount of time off. It should be agreed with your employee in advance. If you feel that the amount of time off that the employee has requested is unreasonable, in light of its affect on your business, you can refuse the employee’s request. Again, it is not obligatory to pay your employees when they are carrying out their public duties, but most employers do. It is important to note that some categories of workers, such as the police and agency workers, cannot take time off for public duties.
Employees who need time off to care for a dependent in an emergency are allowed a reasonable amount of time for this purpose.
Examples of a family emergency include a child’s accident at school and disruption to care arrangements. It is considered that 1-2 days will be adequate for this.
Can an employer refuse a request for unpaid leave?
Yes, as stated above, there are situations in which the employer has the right absolutely to refuse to allow the employee to take unpaid leave.
- a career break or sabbatical;
- appointments with the doctor or dentist (unless the employee is pregnant in which case you have to allow paid time off for ante natal appointments);
- compassionate leave; and
- bereavement leave.
An employer can also refuse a request for unpaid leave in the case of family emergency or to carry out public duties if they consider that the employee would then be taking an unreasonable amount of time off.
An employer can also refuse unpaid leave for study and training purposes where it does not consider that the training would benefit the business and where it would not be able to meet customer demands if the training were granted. To be eligible to make the request in the first place, the person must be an employee with at least 26 weeks of service and work for an organisation with over 250 employees. If you do decide to grant time off for study or training it can be paid or unpaid, and you can choose to pay for the training itself, to contribute to it, or to pay nothing at all.
Unpaid parental leave
In order to apply for unpaid parental leave, an employee must have been employed by you for at least one year and be the child’s parent or have parental responsibility. Agency workers and contractors do not have the right to apply for parental leave.
The employee’s right is to 18 weeks of unpaid leave for each child up to the age of 18. The right is connected to the child and does not restart when an employee starts a new job.
For example, if an employee took eight weeks of parental leave in their previous job, they have ten weeks remaining to take in their current or future role.
A parent can take a maximum of four weeks of leave per year, in one or two week blocks, although the employer may agree to vary these amounts if it wishes.
The employee must give you 21 days’ notice of the intended start date of their parental leave, and also tell you when the date that the parental leave will end.
It is possible for you to delay the start date of the parental leave, but you cannot change the length of the leave requested by your employee. If you do wish to delay the start date, you must suggest a new start date which must be within six months of the original start date, and reply to your employee within seven days of receiving the request.
You cannot postpone the employee’s parental leave if it would take them beyond their child’s eighteenth birthday and result in them losing their entitlement. Nor can an employer postpone the parental leave if they do not have a ‘significant reason’ for doing so, and if the request is made by a father or partner immediately after the birth of their child.
In the case of all applications for unpaid leave, the process can be complicated. Therefore, it is highly recommended to have a policy in place setting out the employees’ rights in your organisation. This should prevent employees from misunderstanding their entitlements, whilst appreciating the flexibility that you show as an employer.
If you are concerned about the use of unpaid leave, whether asking your workers to take time off work unpaid or if an employee has submitted a request, we can help if you need guidance on the rules and implications for your business. Our team of employment lawyers are on hand to answer your questions.
Unpaid leave FAQs
Can an employee take unpaid leave from work?
It depends on the reason for taking leave. In some cases, such as jury duty, the employer has to allow a worker to take unpaid leave. However, in other cases, such as time off to go travelling, the employer has the right to decide.
How do you calculate unpaid leave?
The calculation of unpaid leave depends on the reason it is being asked for. The company's staff handbook should contain details of when employees can take unpaid leave and for how long.
How many days unpaid leave is an employee entitled to UK?
There is no set number of days of unpaid leave to which an employee is entitled in the UK; it depends on why an employee wants the time off. For example, if the employee has to take time off to deal with a family emergency, they are entitled to a reasonable amount of time, which is usually classed as 1-2 days.
Last updated: 23 March 2020