Leave and Absence Guide for Australian Employers

Employee leave and absence

Navigating the rules of employee leave in Australia can be confusing for business owners. The underpinning legislation that outlines entitlements is the National Employment Standards (NES). The NES establish minimum requirements for most types of leave, including annual leave, sick leave, compassionate leave and others.

It's important to note that your specific obligations towards your employees may extend beyond the NES. Things to consider are relevant industry awards, employment contracts, and even state or territory laws can outline more generous leave provisions in certain situations.

That's why having clear, easily accessible leave policies within your business is essential. Well defined leave policies promote transparency for your employees, reduce uncertainties and ensure consistency and fairness in dealing with leave requests.  In return, these policies create a smoother experience for both you and your team.

What is leave of absence?

A leave of absence (LOA) is an extended period of authorised time away from work granted to employees due to circumstances beyond their usual control. Unlike annual leave, it covers situations like childbirth, serious illness, family care responsibilities or bereavement. Australian employers are often legally obligated to approve leave of absence requests for these types of valid reasons.

Employees might request a leave of absence for a variety of reasons for why they need extended time away. Here are some of the most frequent reasons:

• Personal illness or injury - when an employee is facing a health condition, whether physical or mental, they may need a leave of absence to focus on treatment, recovery and rehabilitation.
• Caring for a sick or injured family member - caring for someone with a serious illness or injury can be demanding. A leave of absence supports employees managing requirements of their loved one's situation.
• Childbirth or adoption - becoming a parent, through either birth or adoption, calls for adjustments and bonding time. A leave of absence allows parents to fully embrace this special period in welcoming a new child into their family.
• Bereavement - losing a close family member brings significant emotional distress. Time for grieving and dealing with necessary arrangements becomes important. A leave of absence supports employees as they navigate this difficult time.
• Family and domestic violence - sadly, abuse or violence within relationships is a reality some employees face. A leave of absence prioritises the survivor's safety by providing them time to relocate, attend counseling, seek legal options and rebuild their lives.‍
• Other potential reasons - there might be other circumstances resulting in a leave of absence, including personal education or training opportunities, urgent household emergencies like major home repairs and serving on jury duty.
  

The National Employment Standards (NES) sets the minimum entitlements for different types of leave, including leave of absence in certain situations. Employers have a responsibility to understand and comply with the NES, as well as any additional provisions contained in relevant awards, registered agreements or employment contracts.

Types of leave in Australia

Australian employers have a legal responsibility to provide various types of leave to their employees. Let's unpack the main types of leave.

Annual leave, also referred to as holiday pay, gives employees paid time off work for rest, relaxation and taking breaks from the workplace. Under the National Employment Standards (NES), all employees except casuals are entitled to four weeks of annual leave per year (pro rata for part-time employees). It accumulates based on an employee's usual working hours, and if unused, it carries over from one year to the next.

Sick and carer's leave provides a safety net for employees. It combines an employee's right to take paid time off when they face their own illness or injury (sick leave) with the ability to care for a sick or injured family member (carer's leave). Full-time employees receive 10 days of paid sick and carer's leave per year under the NES (part-time employees get a pro-rata amount), while casual employees generally only have access to unpaid carer's leave. This entitlement accumulates year after year, with unused portions rolling over.

Compassionate and bereavement leave is designed to support employees dealing with the death of a close family member or a family member facing a life-threatening situation. Both permanent and casual employees are entitled to two days of compassionate leave for each eligible occasion. For permanent staff, this is paid leave, while casuals receive it unpaid.

Parental leave gives employees the right to an extended period of unpaid time away from work when welcoming a new child into their family through birth or adoption. To be eligible, employees must usually have served with their employer for a continuous period of at least 12 months. Each eligible employee can take up to 12 months of unpaid parental leave and can request up to a further 12 months, which you can refuse only on reasonable business grounds. Up to 100 days of the 12 months can be taken flexibly, so it doesn't all have to be taken in one block. Separately, eligible parents can get up to 26 weeks of Government-funded Parental Leave Pay for a child born or adopted on or after 1 July 2026 (see our guide to paid parental leave and super).

Family and domestic violence leave recognises the devastating impacts of family and domestic violence. It aims to provide victims with support and time to manage essential matters like securing their safety, arranging relocation or attending legal proceedings. All employees, including part-time and casual employees, are entitled to 10 days of paid family and domestic violence leave in each 12-month period. The full 10 days are available straight away, do not build up over time and do not carry over. This has applied to all employers, including small businesses, since 1 August 2023.

Long service leave rewards employees for their dedication and loyalty to a company over an extended period. Unlike most leave types, it is not set by the NES or modern awards for most employees. It comes from the long service leave law of the state or territory where the employee works, so the qualifying period and amount depend on the state. A small number of employees get it from an older award or agreement preserved by the NES, and employment contracts can offer more.

Paid vs. unpaid leave

Australian leave entitlements create a balance of both paid and unpaid options. As we outlined earlier, types like annual leave, sick and carer's leave (for permanent employees), compassionate leave (for permanent employees) and family and domestic violence leave (for all employees) fall under paid leave entitlements. This means employees receive their normal wages when using these entitlements.

Some forms of leave, including carer's leave and compassionate leave for casuals, parental leave under the NES (apart from any Government-funded Parental Leave Pay) and most community service leave, remain unpaid. When employees have exhausted their paid leave entitlements or situations fall outside these categories, they can still request an unpaid leave of absence to address significant needs.

Importantly, while some unpaid leave is at an employer's discretion, others are legally mandated. Employers are obligated under law to provide access to unpaid leave types like unpaid carer's leave, unpaid parental leave, community service leave and compassionate leave for casual employees. These legally protected unpaid leave options ensure all Australian workers have basic rights when circumstances call for extended absence.

While the National Employment Standards set legal minimums, employers sometimes adopt a more generous approach beyond this. Offering additional paid leave options above what the NES requires can be  a powerful draw for skilled workers and helps boost your reputation as an employer. Increased access to paid forms of leave demonstrates employee support which promotes greater loyalty, commitment and overall staff retention.

Leave of absence applications

The specific steps involved in applying for a leave of absence may vary slightly between businesses. It's always best for employees to familiarise themselves with the leave policies outlined by their workplace. In general, the process usually involves submitting a written leave request to the employee's line manager or supervisor.

Leave requests should clearly outline the reason for the leave and the proposed dates of absence. For most types of leave, particularly sick leave or compassionate leave, employers can ask to provide supporting evidence. This could be in the form of a medical certificate or other relevant documentation.

Whenever possible, employees are encouraged to submit leave requests as early as possible. This proactive approach gives employers enough time to consider the request, potentially make any necessary work arrangements and minimise disruptions to business operations.

Managing leave as an employer

Effectively managing employee leave as a business owner contributes to smoother operations and more supportive employee relations. Here are some key tips for navigating leave within your business:

• Have clear policies in place. It's essential to have written policies regarding leave outlining entitlements, processes, requirements and expectations. Ensuring these policies are easily accessible to all employees fosters transparency and reduces confusion.
• Maintain accurate record-keeping. Maintaining accurate leave records is important, both for tracking absences and making fair decisions about future requests. Consider using software or digital platforms if the manual system becomes too complex.
• Track employee absence patterns. Tools for logging employee absences can provide you with insights into the reasons and any patterns that may emerge within your workplace. Such insights can aid in  improving future approaches to managing  leave.
• Facilitate return to work interviews. Following some extended absences, such as those related to health issues, having short return-to-work interviews can be helpful. These create a smooth reintegration, identify any necessary work adjustments and show commitment to supporting employees returning after being away. Remember, such discussions must be handled with sensitivity and with full cooperation from the employee.

If you need further advice on managing leave and your employer obligations, Employment Compass can provide assistance. Call our 24/7 HR advice line on 1300 144 002 for free initial advice.

What's the difference between annual leave and a leave of absence?‍

Annual leave is granted regularly for planned holidays while a leave of absence covers extended periods away from work due to specific, often unplanned circumstances.

Are employers legally obligated to grant leave of absence requests?‍

Australian employers must consider leave of absence requests in line with the National Employment Standards, awards and any contracts. Situations protected by law, like serious illness or compassionate reasons, generally require employers approving these types of leave.

Can employees be asked to provide evidence for leave requests?‍

It's common practice for employers to request reasonable evidence such as medical certificates, particularly with absence requests related to health reasons.

What are the benefits of offering paid leave benefits beyond the legal minimums?‍

Providing generous leave entitlements often demonstrates a commitment to employee wellbeing, which can foster loyalty, improve overall job satisfaction and make you an attractive employer to skilled workers.

Can unused leave like annual leave be 'cashed out' by employees?‍

Generally, employees are expected to take their accrued annual leave rather than receive a payout. However, certain awards or agreements may stipulate circumstances where some forms of accrued leave can be cashed out under specific conditions. Cashing out annual leave must leave the employee with at least 4 weeks of annual leave.