Understanding Unpaid Leave And Sabbaticals

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Introduction

Interest in taking unpaid leave has been steadily rising over the last 15 years.

Screen-Shot-2017-10-11-at-17.19.11

Source: Google Trends

In August 2017, companies using CharlieHR requested and approved 47 days worth of unpaid leave.

The term ‘sabbatical’ is searched 18,000 times a month, presumably by employees itching for a longer break than the standard two weeks in Mallorca.

The Legal Stuff

Career Breaks / Sabbaticals

First things first, there are no legal entitlements to a career break or sabbatical.

This is something that is worked out between the employer and the team member. Because of this, the employee taking the break doesn’t have any legal protection to ensure that their role will still be available on their return.

Unpaid Leave

In this context, we’re not looking at unpaid leave in relation to parental leave or compassionate leave, both of which have a few different complexities around them.

You're able to read more about that in our How To Create First Time Maternity And Paternity Leave Policies resource.

Here we’re discussing unpaid leave in relation to annual leave.

Much like sabbaticals or career breaks, there is no specific legislation that grants rights for unpaid leave to be taken as holiday.

Beyond The Legalities

Why Offer Unpaid Leave?

As there are very few legal requirements around sabbaticals and unpaid leave. You are not obliged to allow your team to take this type of time off.

The question then becomes: is there any reason to offer unpaid leave / sabbaticals as an option for your team? Are you able to turn the provision into a competitive advantage when it comes to recruitment? Or is just an unnecessary burden?

One London company that treats unpaid leave as a positive team benefit is UK challenger bank Monzo. The fact that it's being done by a company in a competitive space for talent speaks to companies' ability to offer this as perk to potential team members.

Another positive for companies is that - because there is no legal requirement - the unpaid leave policy can be on their own terms. It means that within the policy (ideally laid out in an employee handbook) a company has control over:

  • Eligibility & notice periods
  • How a team member applies for the leave and how long is permitted
  • If the employment contract is affected at all (for example, qualifying for pay rises as a result of time worked at the company, etc).

CharlieHR

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