As the festive season approaches, many businesses see a rise in requests for unpaid leave, especially from employees without enough paid leave entitlements to cover Christmas closures. While it’s natural to want to support your team, it’s important to handle these requests carefully and consistently to manage risk, retain goodwill, and maintain operational continuity.
What leave is legally entitled vs discretionary?
Unpaid leave isn’t a guaranteed entitlement in most cases. Under the National Employment Standards, some unpaid leave types must be granted, such as:
- Community service leave (e.g. jury duty)
- Unpaid parental leave
- Compassionate or carer’s leave
Other requests, like those for extended travel or study, are typically at the employer’s discretion.
Still, even when an employer is legally within their rights to decline, inconsistent or unclear decisions can trigger complaints. A recent Fair Work Commission case highlights the potential for these decisions to escalate into claims of unfair treatment if not handled well.
A Fair and Balanced Approach
When assessing unpaid leave requests:
- Understand the reason – Is it tied to genuine personal, family, or professional needs?
- Assess operational impact – Can the role be covered without disrupting business operations?
- Consider employee wellbeing and retention – Could granting the leave prevent burnout or support engagement?
- Set clear expectations – Confirm return dates and any other implications for the employee.
A consistent case-by-case approach to assessing unpaid leave requests helps ensure fairness, especially during busy periods.
Communicating is Critical
If you approve unpaid leave, be upfront about impacts:
- No salary during the unpaid leave
- Pause in super contributions (unless you choose otherwise)
- No accrual of annual or personal leave
- Possible long service leave implications (varies by state)
Transparent communication helps avoid confusion, future disputes and helps employees make informed decisions about proceeding with unpaid leave.
When you Need to say No
If a request can’t be accommodated:
- Be clear and respectful in your response
- Offer context without comparison – remember each request should be assessed on its own merits
Saying no, when necessary, is part of fair leadership, especially when done with clarity and respect, supporting your team and protecting your business operations.
Protect Fairness and Confidentiality
Approach each request individually, without comparing employees’ personal circumstances. Use messaging like:
“We assess each unpaid leave request individually, considering personal circumstances and operational requirements.”
This reduces the risk of perceived unfairness or claims of inconsistent treatment, whilst maintaining confidentiality.
Is a Formal Policy Required?
A formal unpaid leave policy isn’t essential, but a clear internal process or checklist helps ensure decisions are fair, consistent and well documented.
Final Thought: Balance is Key
With the holiday period fast approaching, now is the time to:
- Review your internal processes
- Communicate clearly with your team
- Be prepared to assess unpaid leave requests with consistency, care and clarity.