Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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When you run a small business, you’re balancing customer deadlines, cashflow, and a team that (quite reasonably) has a life outside work.
So when an employee asks: “can you take unpaid leave from work?”, it can feel like you’re being asked to solve a people problem and a legal problem at the same time.
The good news is that unpaid leave is a normal part of employing people in the UK. The tricky part is working out when it’s a legal entitlement, when it’s discretionary, and how to handle it fairly without disrupting your business.
This guide breaks down the key types of unpaid leave in the UK, what you need to do as an employer, and how to put the right policies and paperwork in place to protect your business from day one. This article is general information, not legal advice.
What Does “Unpaid Leave” Mean In Practice?
Unpaid leave is time away from work where the employee remains employed, but you don’t pay their usual wages for the time they’re absent.
It’s important not to confuse unpaid leave with:
- Annual leave (holiday): statutory holiday is paid, and employees are entitled to be paid for it.
- Sick leave: this may be paid (company sick pay) or statutory (SSP), and it can become unpaid if entitlement is exhausted or eligibility doesn’t apply.
- Unauthorised absence: where an employee simply doesn’t turn up (which can lead to disciplinary action).
- Flexible working: a permanent or semi-permanent change to working pattern, rather than a block of time off.
From an employer’s perspective, the key questions are usually:
- Is the employee legally entitled to take this time off?
- Do we have to agree to it?
- Do we have to keep paying them?
- How do we document it and keep things consistent across the team?
Those answers depend on the type of leave, the employee’s circumstances, and what’s written in your Employment Contract and policies.
When Do Employees Have A Legal Right To Unpaid Leave?
There are several situations where employees can have a statutory right to time off, and in many cases that time off is unpaid (or only partly paid, depending on the circumstances).
Below are some of the common categories small businesses deal with.
Time Off For Dependants (Usually Unpaid)
Employees are generally entitled to “time off for dependants” to deal with emergencies involving someone who depends on them (for example, a child falls ill, or care arrangements break down).
This time off is typically unpaid unless your contract or policy says otherwise.
It’s usually intended to cover the immediate emergency and allow the employee to put alternative arrangements in place, rather than providing extended leave.
In practice, if you don’t have a clear policy, this is where confusion (and frustration) can creep in. A well-drafted Workplace Policy can help set expectations about notification, evidence (if any), and what you treat as “reasonable” time off.
Parental Leave (Unpaid, With Eligibility Rules)
There is a statutory right to unpaid parental leave for eligible employees to look after a child’s welfare (this is different from maternity/paternity/adoption leave, which has its own rules and potential pay entitlements).
In broad terms, it’s available to employees with at least 1 year’s service who have parental responsibility for the child. There are limits on how much can be taken (including an overall cap per child and a yearly limit), notice requirements, and default rules on how it’s taken (for example, in blocks of a week in many cases).
Employers can only postpone parental leave in limited circumstances (it’s not a refusal), and you must follow the statutory process (including confirming the new dates). It can’t usually be postponed if it’s being taken immediately after the birth or adoption placement (or, for adoptive parents, immediately after the child’s arrival in the UK).
If you’re unsure, get advice before refusing or postponing parental leave, because mishandling it can trigger complaints or claims.
Jury Service (Time Off Required, Pay Not Always Required)
If an employee is called for jury service, you generally need to allow them time off.
Whether you pay them during that time depends on the employment contract and your approach as a business. Many employers do not pay full wages for the entire period, because the court provides an allowance (subject to rules and caps).
As a small business, it’s worth setting this out clearly in your contract or handbook so there are no surprises when it happens.
Medical Appointments (Often A Policy Issue, Not Always A Statutory Right)
One area that causes a lot of day-to-day questions is time off for medical appointments.
Some appointments have specific rights (for example, antenatal appointments for pregnant employees). For general medical appointments, the legal position can be more nuanced, and employers often handle this through policy and reasonable management rather than a blanket “yes” or “no”.
Having a clear process helps you stay consistent, especially if you’re balancing fairness with customer-facing rota needs. Your approach should also align with disability and reasonable adjustments where relevant.
It can help to sense-check your position against guidance on time off for medical appointments, particularly where the time off becomes frequent or impacts performance and attendance management.
Other Statutory Rights To Time Off
Depending on the situation, employees may also have statutory rights to time off relating to:
- public duties (for example, magistrate duties or local council roles)
- trade union activities (where applicable)
- health and safety responsibilities (for appointed representatives)
Not every type of statutory time off is automatically unpaid, and the rules vary by category. The safest approach is to confirm the category of leave first, then apply the correct rule set.
When Unpaid Leave Is Discretionary: What Can You Say “Yes” Or “No” To?
Not all unpaid leave is a legal entitlement. In many small businesses, unpaid leave comes up as a practical request, such as:
- a short break between jobs (for example, the employee wants an extra week off before starting a new project)
- a family event overseas
- a “trial” arrangement where the employee needs time to sort childcare
- a sabbatical request
- personal circumstances that don’t fall neatly into a statutory category
In these cases, you’re usually dealing with discretionary unpaid leave. That means the employee doesn’t automatically have a right to it, and you can decide whether to approve it based on business needs.
However, “discretionary” doesn’t mean “risk-free”. Two legal risk areas to watch are:
1) Consistency And Fairness
If you approve unpaid leave for one employee and refuse it for another, you should be able to explain the business reason for the difference (for example, staffing levels, notice given, or seasonal demand).
Inconsistent decision-making is one of the quickest ways to trigger grievances and morale issues, even when you’re technically within your rights.
2) Discrimination Risks
If the request relates to a protected characteristic (for example, disability, religion, pregnancy/maternity, or family circumstances that overlap with sex discrimination risks), you need to be especially careful.
For example, if someone requests unpaid leave linked to a medical condition, it may be more appropriate to consider sick leave routes, reasonable adjustments, or flexible working options rather than a simple refusal.
If you’re in doubt, get legal advice before you refuse.
Sabbaticals And Career Breaks
Sabbaticals aren’t a standard statutory right for most employees. If you offer them, they’re usually contractual or policy-based.
If you’re considering a sabbatical policy, you’ll want to define:
- eligibility (length of service, performance standards)
- maximum duration
- whether benefits continue (for example, pension contributions)
- whether the role is guaranteed on return, or whether you only guarantee a similar role
- rules on working elsewhere during the break
This is a classic “get it in writing” area, because it affects workforce planning and expectations on both sides.
How Should Employers Handle Unpaid Leave Requests (Step-By-Step)?
Even if you’re confident you know the answer, the way you handle the request matters. A simple, consistent process can prevent misunderstandings and protect you if the decision is later challenged.
Step 1: Work Out What Type Of Leave It Is
Start by clarifying whether the request is:
- a statutory right to time off (often unpaid)
- a contractual entitlement (check the contract and policies)
- a discretionary request
Don’t guess. Ask the employee what the leave is for, how long they need, and whether it’s an emergency or planned.
Step 2: Check Your Contract And Policies
Your Employment Contract should cover core rules around absence, pay, and notification.
Your handbook and policies often fill in the “how we do things here” details (like who approves leave, the notice period, and whether you require evidence in certain circumstances). If you’re building your HR foundations, a Staff Handbook is often the easiest way to keep these rules clear and consistent across the team.
Step 3: Consider Operational Impact And Alternatives
For discretionary leave requests, consider whether there’s a workable alternative, such as:
- taking annual leave instead (paid)
- adjusting shifts temporarily
- a short-term flexible working arrangement
- staggering the leave dates
It can be helpful to have a “default position” for your business (for example, “we consider unpaid leave where annual leave is exhausted and adequate notice is given”), but stay open to the facts of each situation.
Step 4: Put The Agreement In Writing
Once you approve unpaid leave, confirm it in writing. This doesn’t need to be overly legalistic, but it should clearly cover:
- the dates and whether it’s full days or part days
- confirmation that it is unpaid
- how benefits will be treated (if relevant)
- whether the employee is expected to be contactable
- any return-to-work arrangements
Written confirmation helps avoid disputes later like “I thought it would be paid” or “I didn’t realise my commission would be affected”.
Step 5: Keep Records (And Think About Data Protection)
Keep a basic record of the request and your decision. If the request includes sensitive medical information, be careful about who has access and how it’s stored.
Good record-keeping supports consistency and helps you respond properly if the employee raises a grievance or later disputes pay.
Unpaid Leave, Pay, And Working Time: The Compliance Points Small Businesses Miss
Unpaid leave can have a flow-on effect into other areas of compliance, particularly around pay and working time.
Minimum Wage And Salary Deductions
If an employee is hourly paid, unpaid leave usually just means fewer paid hours for that pay period.
If an employee is salaried, be careful: you generally can’t simply “dock” salary unless there’s a clear contractual right to do so, or the employee has agreed (in writing) to an unpaid absence or a temporary variation. Otherwise, you can risk an unlawful deduction from wages claim.
Make sure payroll understands what has been agreed and that the employee’s payslip reflects it accurately.
Holiday Accrual During Unpaid Leave
Holiday accrual during unpaid leave depends on what kind of leave it is.
Some types of statutory leave have specific rules on holiday (and in many cases annual leave continues to accrue). Other absences, including certain discretionary unpaid leave arrangements, can be more contractual and fact-specific.
Because the details can vary (and the wrong approach can create backpay liabilities), it’s worth getting advice and setting out your approach clearly in writing when you approve discretionary unpaid leave.
Rest Breaks And Working Time Rules
Unpaid leave requests sometimes come bundled with “compressed hours” or changes to working patterns.
If you agree to longer shifts or different patterns to accommodate time off, you still need to comply with the Working Time Regulations (for example, rest breaks and weekly rest requirements), unless an exemption applies.
If your team works variable hours or you’re relying on opt-outs, it’s worth checking your setup against the Working Time Regulations so you don’t accidentally create compliance issues while trying to be flexible.
Probation, Eligibility, And “New Starter” Requests
It’s common for newer employees to request unpaid leave before they’ve built up much annual leave, or during probation.
There’s no automatic rule that says “no unpaid leave during probation”, but you can set expectations, and you can take business impact into account when making your decision.
Just be consistent and clear, particularly if probation outcomes are linked to attendance and reliability. If you need to tighten your documents, it may help to align your approach with your probation clauses and processes in line with probation periods.
Key Takeaways
- When employees ask “can you take unpaid leave from work”, the first step is identifying whether it’s a statutory right, contractual entitlement, or a discretionary request.
- Common statutory unpaid leave categories include time off for dependants and parental leave (subject to eligibility rules, limits and notice requirements).
- Discretionary unpaid leave (like sabbaticals or personal travel) can be approved or refused, but you should apply a consistent, fair process to reduce dispute and discrimination risks.
- Always confirm unpaid leave arrangements in writing, including dates, pay treatment, and any return-to-work expectations.
- Be mindful of related compliance issues like unlawful deductions, holiday accrual rules, and working time requirements when adjusting rosters or pay.
- Clear documentation in your Employment Contract and policies (often supported by a Staff Handbook) makes unpaid leave requests much easier to manage in a small business.
If you’d like help reviewing your leave policies, updating your contracts, or handling a tricky unpaid leave request, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.
