Unpaid Leave and Work Entitlements

Service refers to the cumulative duration of an employee’s tenure with their employer, excluding certain unpaid intervals. It serves as the basis for determining employee entitlements and varies in calculation methods based on specific entitlements.

In certain scenarios, such as during business transfers, an employee’s service with a previous employer may carry over to the new employer. Further details on business transfers are available.

Continuous service denotes an uninterrupted span of employment.

Unpaid leave:
The majority of unpaid leave typically does not contribute to an employee’s service, even if it’s mutually agreed upon with the employer. Consequently, most unpaid leave does not factor into calculations for accrued entitlements like paid leave, with some exceptions outlined below.

While unpaid leave generally does not constitute service, it does not disrupt an employee’s continuous service period.

Stand down differs from unpaid leave and shutdown periods. Refer to our Library article “Difference between stand down, unpaid leave, and shutdown” for further clarification.

Exceptions for certain types of unpaid leave:
Unpaid community service leave and unpaid pandemic leave are exceptions where such leave does count toward an employee’s service. For detailed information, please see our Community service leave and Jury Duty pages, as well as our resource on unpaid pandemic leave.

Exceptions in calculating service for specific NES entitlements:
Agreed-upon unpaid leave with an employer contributes to an employee’s continuous service for various entitlements, including the right to request flexible working arrangements, unpaid parental leave, and associated entitlements, as well as notice of termination or payment in lieu of notice.

Source – Fair Work Ombudsman

Written by Ross Ahmadzai

25 Feb, 2024

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