Unpaid leave

Learn more about unpaid leave and the different types available.

On this page:

Unpaid leave under the National Employment Standards

Unpaid leave is when an employee is absent from work without pay.

Some types of unpaid leave are an entitlement under the National Employment Standards (NES). They include:

Employees taking unpaid community service leave for jury duty may be entitled to payment from their employer for the first 10 days.

An employee can take unpaid leave under the NES if their employer agrees.

The type of evidence required may differ depending on the type of unpaid leave taken.

Other unpaid leave

An employee may ask to take unpaid leave for reasons not provided by the NES.

Unpaid leave is often taken because the employee has no paid leave left.

Example: Employee taking unpaid leave due to insufficient personal leave

Chas is a full-time employee working for a carpentry business.

They’ve only been working for their employer for a month when they get sick. Their doctor tells them they need to have 2 weeks off work while they recover. Chas provides evidence to their employer to support this.

Since Chas has only been working for their employer for a short time, they don’t have enough personal leave to cover this period.

Chas’ employer approves the 2 weeks leave. Chas will first use up the personal leave they have accrued and will then take unpaid leave for the remaining time.

An employee can agree with their employer to take unpaid leave during a shutdown if they don’t have enough annual leave. For more information, visit the Direction to take annual leave during a shutdown page.

Unauthorised absences

Unauthorised absences are times away from work without the employer’s approval. This is also known as unauthorised unpaid leave.

Examples of unauthorised absences include periods of unauthorised industrial action by employees and taking time off work without the employer’s permission. For more information, visit Payment during industrial action.

Unauthorised absences don’t count as service.

Unpaid leave and continuous service

Service is the total length of time that an employee has been working for an employer. Service that isn’t broken by periods of unpaid leave is continuous service.

Aside from unpaid community service leave, other periods of unpaid leave don’t count towards an employee’s length of service. This means that the period of unpaid leave won’t count when calculating most accumulated entitlements such as paid leave.

Exceptions to unpaid leave and service

Unpaid leave under the NES that has been approved by an employer counts towards an employee’s continuous service for:

  • an employee’s right to request flexible working arrangements
  • unpaid parental leave and related entitlements
  • notice of termination or payment in lieu of notice.

For these entitlements, the entire period of employment will count as service except for any periods of unauthorised absence.

Example: Unpaid leave and service

Bronte has been employed for 6 years. She takes a year of unpaid parental leave.

During her unpaid leave, Bronte doesn’t accumulate annual or sick and carer’s leave.

When Bronte returns to work, her service continues. This means that she doesn’t start a new period of service with her employer.

A year later, Bronte’s position is made redundant.

To work out Bronte’s redundancy pay, her employer doesn’t count the year that Bronte was on unpaid leave. The time before she went on unpaid leave and the time since she returned count as continuous service.

To work out Bronte’s notice period, her employer counts the whole time that she was employed, including the time before she went on unpaid leave, the year that she was on unpaid leave, and the time since she returned.

Source reference: Fair Work Act s.22

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