Unpaid leave & continuous service

Service is the total amount of time an employee has been employed by their employer, but it doesn’t include some unpaid periods. Service is used to determine employee entitlements. It’s counted in different ways for different entitlements.

In some cases, such as some transfers of business, an employee’s service with an old employer can count as service with the new employer. When businesses change hands has more information on transfers of business.

Continuous service is an unbroken period of service.

Unpaid leave

Most unpaid leave doesn’t count towards an employee’s service, even if it has been agreed to by the employer.

This means most unpaid leave doesn’t count when calculating most accumulated entitlements such as paid leave. Some exceptions are outlined below.

Even though unpaid leave generally doesn’t count as service, it doesn’t break an employee’s period of continuous service.

Stand down is different to unpaid leave and shut down periods. See our Library article Difference between stand down, unpaid leave & shut down.

Exceptions for some types of unpaid leave

Unpaid community service leave counts as service. For more information, see our Community service leave and Jury Duty pages.

Unpaid pandemic leave counts as service. Unpaid pandemic leave in awards has more information about unpaid pandemic leave.

Exceptions when calculating service for some NES entitlements

Unpaid leave that has been agreed with an employer counts towards an employee’s continuous service for:

  • an employee’s right to request flexible working arrangements
  • unpaid parental leave and related entitlements
  • notice of termination or payment in lieu of notice.

For the purpose of these entitlements, the entire period of employment will count as service except for any periods of unauthorised absence.

Example

Bronte has been employed for 6 years. Her employer lets her take a year of unpaid leave to travel overseas.

During her unpaid leave, Bronte doesn’t accumulate annual or sick or carer’s leave.

When Bronte returns to work her service continues. This means that she doesn’t start a new period of service with her employer.

A year later, Bronte’s position is made redundant.

To work out Bronte’s redundancy pay, her employer doesn’t count the year that Bronte was on unpaid leave. The time before she went on unpaid leave and the time since she returned count as continuous service.

To work out Bronte’s notice period, her employer counts the whole time that she was employed, including the time before she went on unpaid leave, the year that she was on unpaid leave, and the time since she returned.

Other absences

Stand down

Stand down is different to unpaid leave. For information on the difference between stand down and unpaid leave, see our page Difference between stand down, unpaid leave & shut down.

For more information about stand down and continuous service, see our Library article Stand down of employees & continuous service.

Workers compensation

Absence from work while on workers compensation counts as service for some NES entitlements, but it’s treated differently in each state and territory for annual leave and sick and carer's leave.

See our library articles, Workers compensation & continuous service and Annual leave & sick leave during workers compensation.

Unauthorised absences

Unauthorised absences are times away from work without the employer’s approval. This is also known as unauthorised unpaid leave. Unauthorised absence includes things like periods of industrial action by employees and taking time off work without the employer’s permission.

Unauthorised absences don’t count as service.

View references

Fair Work Act 2009 - section 22 deals with continuous service.

What to do next

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