Handling a leave without pay request as an Australian employer

An employee has come to you asking for time off you don't have to give them. Their paid annual leave is exhausted (or close to it), they have a reason — a sick parent overseas, a partner posted interstate for six months, a study commitment, a long-planned trip they'd already booked — and they want to know whether they can still have the time. What they're asking for is leave without pay (LWOP), and the question lands on your desk because there is no form for it, no portal, and no statutory entitlement most of the time. The decision is yours.

What you'll end up with at the end of a properly run LWOP process is a short written approval (or refusal) that records the dates, makes the unpaid status explicit, sets out the effect on accruals, public holidays and superannuation, and locks in a return date. There is no register to lodge anything on and no government acknowledgment to wait for — the artefact is internal, and its job is to make the arrangement defensible if a dispute arises later. One thing readers commonly assume: that approving LWOP automatically pauses every entitlement and obligation in a clean line. It doesn't. Some things keep accruing or counting; some don't; some depend on the modern award or enterprise agreement sitting over the employment.

Prerequisites before you decide

• A written request from the employee with dates, reason, and (where reasonable) supporting evidence. Verbal hallway requests are the single biggest source of later disputes.
• The employment contract on screen so you can see whether it deals with unpaid leave at all and what discretion it reserves.
• The applicable modern award or enterprise agreement identified. This is where employers trip up most often — they apply general principles when the instrument actually sets specific rules on unpaid leave, accruals, or service.
• Your workplace policy on LWOP, if you have one. If you don't, this request is a prompt to write one before the next.
• A view on operational impact: who covers the work, for how long, and at what cost.
• A check on whether the request actually engages a statutory unpaid leave entitlement instead — unpaid parental leave or the 2 days of unpaid carer's leave per occasion available to casuals and others who've used their paid carer's balance. If a statutory right applies, this isn't a discretionary LWOP decision at all.

Confirm what the employee is actually asking for

Start by separating LWOP from things that look like LWOP but aren't. LWOP is a discretionary, unpaid absence — there is no general right to it under the National Employment Standards (NES). The categories that are easy to confuse:

• Unpaid parental leave — a statutory entitlement under the NES for eligible employees (12 months' continuous service), giving up to 12 months' unpaid leave, extendable by request to a total of 24 months. Not discretionary.
• Unpaid carer's leave — 2 days per occasion under the NES, available where paid sick and carer's leave isn't available (typically casuals, or permanent staff who've used their paid balance).
• Paid family and domestic violence leave — 10 days per year, paid, available upfront from the first day of employment. This is a paid entitlement under the NES; it is not LWOP and should never be recorded as unpaid.
• Long service leave — set by state and territory legislation; rules on absence and continuity vary.

If the request fits one of these categories, your job is to administer the statutory entitlement, not to decide whether to grant unpaid leave. Get this characterisation right before anything else.

Check the contract, the instrument, and your policy

With the request characterised as genuine LWOP, work through the documents in this order:

• The employment contract — does it reserve discretion to approve unpaid leave? Does it set conditions (notice, evidence, maximum duration)?
• The modern award or enterprise agreement — does it deal with unpaid leave at all? Some instruments are silent; some give specific rights or set caps.
• Your policy — does it set eligibility (e.g. minimum tenure), a maximum length, evidence requirements, or rules on what happens to accruals and superannuation?

Where any of these documents speak, follow them. Where they're silent, your decision is at large but still has to be exercised consistently and lawfully.

Run a fair and consistent decision

Before you decide, work through the discretion you actually have. The relevant factors are operational (can the role be covered, at what cost, for how long), historical (how have you handled similar requests from comparable employees), and legal (does the request engage a protected attribute or workplace right under the Fair Work Act's general protections or anti-discrimination law).

Pay particular attention to:

• Requests linked to pregnancy, disability, age, family or carer responsibilities, race, religion or other protected attributes — refusal can become unlawful discrimination even where the LWOP framing is neutral.
• Requests that follow a complaint, a workers compensation claim, or any exercise of a workplace right — adverse-action exposure under Part 3-1 of the Fair Work Act 2009 (Cth) is high here, and refusal needs a clear operational reason untainted by the protected conduct.
• Inconsistency with prior decisions — if you approved six months for one employee for travel and now refuse three months for another in similar circumstances, you need to be able to explain the difference.

If any of these flags are present, take advice before refusing.

Common points where employers get held up at the decision stage:

• Refusing without recording the reason. Six months later, in a dispute, no one can reconstruct why the decision was made. Capture a short written reason at the time, even for verbal communications.
• Treating "we're busy" as automatic refusal grounds. Operational impact is a legitimate factor, but it has to be specific (this role, this period, this coverage gap), not a general assertion.
• Forgetting the protected-attribute check. A request that looks like a lifestyle choice on the surface (extended overseas travel) may turn out to be linked to a family member's illness.
• Not asking whether paid leave was considered first. If the employee has annual leave or long service leave available, that's usually a better option for them and a cleaner outcome for you.

Confirm the approval in writing

If you approve, the written confirmation does the heavy lifting for the rest of the arrangement. It should cover:

• Start date, end date (or maximum period), and the process for requesting an extension.
• An express statement that the period is unpaid.
• The effect on accruals — that paid annual leave and personal/carer's leave generally pause during LWOP, unless the relevant instrument says otherwise.
• The treatment of public holidays falling within the period (generally unpaid, because the employee isn't otherwise being paid).
• The position on superannuation — generally not payable, because there are no ordinary time earnings on which to calculate the superannuation guarantee.
• The effect on continuity of service for long service leave purposes — varies by state and the length of absence; spell out what applies in the relevant jurisdiction.
• Any conditions: contactability, handover steps, return of company property, periodic check-ins.

If you refuse, a short letter with the reason is enough. Be specific but brief — long justifications give the employee something to argue with later.

Update payroll, HR systems, and the calendar

The administrative step where errors compound. The actions:

• Set the LWOP dates in the HRIS with a code that distinguishes LWOP from other unpaid categories (parental leave, workers compensation absence, suspension). Generic "unpaid" coding causes accrual and reporting errors.
• Pause accruals correctly. Most payroll systems can be configured to do this automatically by leave code; check that yours is set up that way for LWOP specifically.
• Suppress superannuation guarantee contributions for the period. There are no ordinary time earnings, so there is nothing to calculate super on.
• Diarise the return date and a check-in two weeks before. Without a calendar entry, return dates drift.

Where this goes wrong:

• Accruals keep ticking over. The payroll team treats LWOP like paid leave because the system wasn't configured. Audit the configuration on the first LWOP you approve, not the tenth.
• Public holiday payments process automatically. Standard rules pay permanent employees for public holidays they would otherwise have worked; the LWOP exclusion needs to be applied manually or by leave-code suppression.
• Super is paid anyway. If the employee has any earnings in the period (e.g. a partial week before LWOP starts), the super calculation needs to be limited to the worked portion only.

Manage the absence and the return

For LWOP periods longer than a few weeks, agree on a light-touch communication plan upfront. A monthly check-in by email and a confirmation call two weeks out from the return date is usually enough. The point is to flag drift early — extensions, changes of plan, or non-returns — not to manage the employee through the leave.

As the return approaches, confirm the start date, the role, any roster or team changes that have happened during the absence, and whether refresher training or new system access is needed. A 30-minute re-onboarding conversation on day one prevents most of the friction.

If the employee asks to extend, treat the extension as a fresh decision — same factors, same documentation discipline. If the employee doesn't return on the agreed date and doesn't contact you, follow your usual unauthorised-absence process; LWOP doesn't suspend it.

Where Artificer Legal can help

For a one-off LWOP request that fits cleanly within an existing policy, you don't need a lawyer. For the cases where it's worth getting help:

• Drafting or refreshing the LWOP clause in your employment contract and the workplace policy that sits behind it, so future requests run on rails.
• Working through a request that engages protected attributes or workplace rights, where a refusal could expose you to a general protections claim or discrimination complaint.
• Structuring an extended LWOP arrangement (six months or longer) where continuity of service, long service leave accrual, and the return-to-work position need to be set out carefully.
• Handling the messy ones — an employee who doesn't return, an extension request that arrives mid-absence, an interaction with a workers compensation claim or restructure.

We draft the approval letter or the policy update, advise on the discretion and the risk, and stay with the matter through any complaint or claim that follows.

The step that decides whether this lands cleanly

The factor that determines whether an LWOP arrangement runs smoothly is the written confirmation at approval. Almost every dispute about LWOP — accruals, super, return date, what was conditional — is a dispute about what was agreed at the start. If the letter is short, specific, and signed back by the employee, the rest of the process is administration. If it's a Slack message or a verbal nod, you'll be reconstructing the arrangement from memory the first time something goes wrong.

LWOP isn't an NES entitlement in its own right — most of the time, approval is your call, guided by the contract, the applicable award or agreement, and your policy. The categories that look like LWOP but are actually statutory entitlements (unpaid parental leave, the 2-day unpaid carer's leave, paid family and domestic violence leave) need to be identified before you treat anything as discretionary. Once approved, paid leave accruals generally pause, public holidays in the period are usually unpaid, and superannuation isn't payable because there are no ordinary time earnings. Document the decision, configure payroll correctly, and plan the return — and the arrangement will hold up if anyone asks how it was managed.