How To Handle Unpaid Leave Requests Without Losing Your Mind (Or Your Team)
Balancing empathy for your employees with the operational realities of running your business can make it challenging to handle unpaid leave requests effectively. Use our free Unpaid Leave Requests Checklist to navigate this process with confidence and consistency.
Let’s face it, unpaid leave requests can be a bit of a minefield.
On one hand, you want to support your people. Life happens, study opportunities arise, family needs change, and sometimes, employees just need a break. On the other hand, you’ve got a business to run. You can’t always afford to have someone off the roster for weeks or even months at a time.
So how do you strike the right balance between compassion and operational needs?
It’s a question many HR professionals and business leaders grapple with. And while there’s no one-size-fits-all answer, there are some key legal and practical considerations that can help you navigate these requests with confidence, and fairness.
Let’s dive into four of the most common questions employers ask when it comes to unpaid leave, and how to handle them without creating confusion, resentment, or legal risk.
Are We Legally Required to Approve This Leave?
This is usually the first question that comes up, and for good reason. The answer? It depends.
Some types of unpaid leave are protected under the National Employment Standards (NES). These include:
- Community service leave (e.g. jury duty—usually unpaid).
- Unpaid parental leave (up to 12 months, with a possible extension to 24 months if agreed).
- Carer’s leave (if paid leave is exhausted).
- Compassionate leave (in some cases, this can be unpaid).
If an employee meets the eligibility criteria for these types of leave, you’re legally required to approve them.
But what about other types of unpaid leave like taking time off to study, travel, or pursue personal goals? That’s where things get discretionary. You’re not legally obligated to say yes, but you do need to consider the request fairly.
A recent case before the Fair Work Commission (FWC) highlights this perfectly. A long-serving federal government employee, fresh off 18 months of study leave, asked for another two to three years of unpaid leave to pursue a degree in emergency management. She also suggested part-time work or voluntary redundancy as alternatives.
Her employer declined all options. She resigned, citing a lack of support, and later filed a general protections claim. But the FWC sided with the employer, stating the refusal was a “reasonable management decision.”
The takeaway? You’re not always required to approve unpaid leave, but you do need to be reasonable and consistent in how you handle requests.
Do We Need a Formal Policy Handle Unpaid Leave Requests?
Not necessarily. But having a clear internal process is essential. If your organisation wants to encourage unpaid leave for example, to support professional development or wellbeing, it might be worth creating a formal policy. But even without one, a simple internal checklist can go a long way in guiding decisions and ensuring consistency.
Here are a few questions to ask when assessing a request:
- What’s the purpose of the leave?
- Does it make sense in the context of the employee’s role and circumstances?
- Will the leave benefit the employee’s wellbeing or professional growth?
- Can the business manage the absence without major disruption?
- Is the leave period clearly defined?
- Is there a clear expectation that the employee will return?
If the answers to most of these are “yes,” you’re probably in a good position to approve the request. If not, you may have reasonable grounds to decline. The key is to avoid arbitrary or inconsistent decisions. That’s what can get you into trouble, not the refusal itself, but how it’s handled.
How Will This Affect the Employee’s Entitlements?
This is a big one, and is often overlooked.
When someone takes unpaid leave, it’s not just their salary that pauses. Other entitlements may be affected too, including:
- Superannuation: Generally, employers aren’t required to make super contributions during unpaid leave (unless otherwise agreed).
- Annual and personal leave: These usually stop accruing during unpaid leave.
- Long service leave: This varies by state and territory, some jurisdictions count unpaid leave towards accrual, others don’t.
It’s crucial to communicate these impacts clearly before approving the leave. Employees may not realise how their entitlements will be affected, and misunderstandings can lead to frustration or even disputes.
Also, think about the bigger picture. If someone takes unpaid study leave and returns with new skills, they might expect a pay rise or promotion. Be prepared to have that conversation and manage expectations early.
How Do We Stay Consistent Without Setting a Precedent?
This is where things can get really tricky, and we’ve created a checklist to help!
Let’s say you approve one person’s request for unpaid leave but deny another’s. What happens if the second employee cries foul? You could be facing claims of unfair treatment, or worse, discrimination.
To avoid this, you need to:
- Document your decisions: Keep a record of why a request was approved or denied.
- Communicate clearly: Explain your reasoning to the employee, ideally in person or via video, followed by a written summary.
- Avoid comparisons: If an employee asks why their colleague’s request was approved, don’t go into detail. Emphasise confidentiality and explain that each case is assessed individually.
- Use consistent language: In your written response, include a line like: “Please note that we assess each unpaid leave request on a case-by-case basis.”
This helps protect your business and reinforces that decisions are made fairly and thoughtfully.
AKYRA’s Wrap-Up
Unpaid leave requests can be challenging, but they’re also an opportunity. Handled well, they can strengthen trust, boost engagement, and show your team that you genuinely care about their wellbeing and development. Handled poorly, they can lead to resentment, disengagement, or even legal action.
The key is to approach each request with empathy, consistency, and a clear understanding of your obligations. Ask the right questions. Document your decisions. Communicate openly.
And remember: it’s not just about saying “yes” or “no.” It’s about how you say it, and how you support your people through the process.
If you need some advice or guidance, why not just give us a call on 07 3204 8830
Download our
Handling Unpaid Leave Request Checklist
This simple to use document enabled HR professionals and managers to guide themselves with fair, consistent, and legally sound decisions.
Use this checklist to assess and respond to employee requests for unpaid leave. It helps ensure decisions are made fairly, consistently, and with appropriate documentation.
Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice concerning your specific situation.
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