Why you need a leave policy

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When an employee takes time off work, having a leave policy provides clarity between the employer and employee and outlines the guidelines and expectations of the business.

A leave policy is a document that helps an employer define the guidelines and regulations related to various types of leaves that are available to an employee. It contains the types of leave, entitlements, and eligibility criteria for employees.

Minimum leave entitlements for employees come from the National Employment Standards (NES). An award, registered agreement, or contract of employment can provide for other leave entitlements but they can’t be less than what’s in the NES.    

Employees have a range of entitlements in relation to certain types of leave.

This can include: 

annual leave
personal and carer’s leave
compassionate & bereavement leave  
maternity and parental leave 
family and domestic violence leave
long service leave , and
community service leave. 
Every leave policy will be different and can depend on the business or its circumstances. 

Having a clear and well-communicated policy is important as it avoids ambiguities and disagreements about requests for leave that can quickly escalate to become broader HR issues, or create a negative workplace environment.

A policy protects employees and employers, and can include:

Who is eligible for leave?
Entitlements (length of time, whether leave is unpaid or paid)
Whether employees can cash out a leave
What happens if an employee has an excessive leave balance etc.
Having a leave policy also allows employees to have options when a need for a personal emergency leave arises. 

Without one, this can easily cause fear, anxiety, and stress for employees contemplating a leave of absence – all of which are detrimental to employee productivity, engagement, and retention.

Andrew Ross, associate director, Australian Business Lawyers & Advisors (ABLA), said there were multiple reasons to have a leave policy in place. 
“An up-to-date leave policy protects employers and employees by setting out the expectations and guidelines for requesting, approving, and denying a request for a leave,” he said.
“Policies and procedures about leave need to reflect legal requirements and guide the employer and employee on expectations for taking leave and act as a mechanism for holding employees and their supervisors accountable. ”

If you don’t, for example, have a policy about leave without pay or parental leave, then you’re left only with a “grey area” of what’s appropriate or available for a leave of absence or parental leave and what’s not, according to Mr Ross.

That can, and has, led to compensation claims (e.g. Scullin v Coffey Projects [Australia] Pty Ltd), which highlights the importance of carefully drafting policies.
“A well-prepared, up-to-date leave policy allows you to treat all employees equally, ensuring uniformity and consistency in decision-making and operational procedures, and therefore best avoid general protection claims with ‘uncapped’ damages available,” Mr Ross said.

“From a cultural point of view, a well-prepared and regularly revised leave policy says that an organisation values its employees.”

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