Unpaid leave—an escape from work when life calls, but is it a door worth opening? For those facing urgent personal matters, it can seem like a welcome relief; time to reset, handle pressing issues, or pursue unique opportunities without sacrificing job security.
But what does it entail?
Kevin Kadipo, a Human Resource practitioner says that unpaid leave is basically taking time off work without being on payroll actively.
Often, it’s the option left when an employee has exhausted all other leave types—emergency, study, sick, compassionate, maternity, paternity and more.
How long is it?
“Mostly it is between 60 days (two months) to three years though it is not a provision of the Employment Act. There are those who give up to one year so that after that they either come back or resign.”
The hidden costs of unpaid leave
In every company’s policy, there is a guide of what constitutes unpaid leave. Mr Kadipo says one of the provisions most polices put a condition to is that the head of the department must ensure there is continuity.
“There is no impact to company in terms of finances or cost of workload. Work has to continue. You are going to not make the company fall,” emphasises Mr Kadipo.
However, one of the disadvantages of taking unpaid leave is that there is no salary increment during this period.
“Say you have gone for a year or two and the company conducts annual increments every year, you will miss out on this because you are not in their active payroll,” he adds.
Secondly, Mr Kadipo says, there are no promotions during your unpaid leave. “So, if you left when you were an assistant manager, you will come back in that position even though your colleagues may have been promoted to maybe manager or senior manager.”
Additionally, some employers minimise the costs associated with employees on unpaid leave, hence withdrawing medical insurance coverage during this period.
Nonetheless, Mr Kadipo says that most policies or provisions on unpaid leave provide that when one wants to resign, they don’t need to serve notice because already they are away. “So you just resign in writing.”
“The only time you can sue your employer is when you are fired while under unpaid leave,”advise Mr Kadipo.
Dos and don’ts while on unpaid leave
Beverly Khasiala, a talent manager at Ceriops Environmental Research Organisation, says the information employees give their employers about their unpaid leave is dependent on the relationship with them.
Secondly, she notes that an employee needs to weigh their options before taking unpaid leave.
“Is it good to forego working for your employer so that you can get experience elsewhere? What are the benefits for going compared to staying behind?”
Additionally, an employee should maintain secrecy and confidentiality as unpaid leave is usually reviewed on case-by-case basis.
On the other hand, Ms Khasiala cautions employees against lying about the reason for the unpaid leave.
“Do not take unpaid leave to test whether the grass is greener in another company especially if that employer is in direct conflict with your organisation, because now you have violated the non-compete clause in your contract,” she says.
Even though unpaid leave guarantees job security, employees should not engage in activities that are contrary.
Ms Khasiala says, “I’ve seen some employees abuse that unpaid leave. Say it’s for studying for three years, they study for a less period and then the remaining months or years engage in business.”
Should you hire an employee who is on unpaid leave?
“Yes. If at all the conditions in which this person is under unpaid leave are within the legal parameters. While at it you will need to remit their statutory deductions, including pension because during the time they are on unpaid leave, the employer is not remitting for them,” says Ms Khasiala.
According to the Public Service Commission HR Handbook, an employee who may seek employment elsewhere is one with urgent private affairs of an exceptional nature, for a period not exceeding 60 calendar days.
“Officers whose spouses are posted to foreign missions for the duration of their service, or officers appointed to international organisations where they cannot transfer their service or be on secondment for a period not exceeding three years, may be granted unpaid leave for a maximum, non-renewable period of one year,” it reads.
