A UK unpaid leave policy should explain when discretionary unpaid leave may be approved, how requests are made, who decides, what happens to pay and records, and how it differs from statutory rights such as dependants leave, carer leave and unpaid parental leave.
What unpaid leave means
Unpaid leave is authorised time away from work where the employee is not paid for the time they are absent. It can be useful when someone has a genuine need for time off but either does not want to use annual leave, has already used their annual leave, or is asking for a type of time off that the employer does not normally pay.
The important point is that unpaid leave is not one single legal right. It is a category that can include several different situations:
| Type of unpaid time off | Typical position | Where to link it |
|---|---|---|
| Discretionary unpaid leave | Usually up to the employer unless the contract or handbook gives a specific right. | This policy page |
| Time off for dependants | A statutory right to reasonable unpaid emergency time off for employees. | Time off for dependants guide |
| Carer's leave | A day-one statutory right to up to one working week of unpaid leave in a 12-month period. | Carer's leave policy template |
| Unpaid parental leave | 18 weeks per child up to their 18th birthday, subject to the statutory rules. | Unpaid parental leave guide |
| Compassionate or bereavement leave | May be paid or unpaid depending on the employer's policy, contract or handbook. | Compassionate leave guide |
Do not use one vague unpaid leave rule for everything. Separate ordinary discretionary requests from statutory leave rights, emergencies, sickness absence and compassionate situations.
When unpaid leave is appropriate
A worker can ask for unpaid leave if they have run out of holiday or do not want to use their holiday entitlement. ACAS says it is up to the employer whether to agree to that kind of unpaid leave, and the worker and employer should try to agree it together.
In practice, an unpaid leave policy is useful for situations such as:
Personal appointments
Where the employee needs time away from work but annual leave, flexible working or a statutory right does not fit neatly.
Family circumstances
Where the situation is not an emergency but the employee needs extra time beyond normal leave options.
Extended travel or life events
Where the employer is willing to approve extra unpaid time off without treating it as holiday.
Short-term arrangements
Where a temporary unpaid period is better than resignation, absence without permission or an informal arrangement.
The policy should also say when unpaid leave is not the right route. For example, sickness should normally be handled through the sickness absence policy, emergency dependant situations should be handled under time off for dependants, and planned childcare needs may fall under unpaid parental leave.
Statutory unpaid leave rights to separate in the policy
Your discretionary unpaid leave policy should not accidentally water down statutory rights. The easiest way to avoid that is to name the related rights clearly and send employees to the right process.
| Right | Core rule | Policy note |
|---|---|---|
| Time off for dependants | Reasonable unpaid time off to deal with an emergency involving a dependant. | Do not require advance notice if the situation is genuinely unexpected. |
| Unpaid parental leave | 18 weeks per child or adopted child, up to their 18th birthday. | Usually taken in whole weeks and subject to notice rules. |
| Carer's leave | Up to one working week in a 12-month period for eligible caring responsibilities. | Cannot normally be refused, although it can be delayed in limited circumstances. |
| Compassionate leave | May be paid or unpaid depending on the employer's policy. | Use sensitive wording and manager discretion. |
| Family statutory leave | Maternity, paternity, adoption, shared parental and neonatal care leave have their own rules. | Keep separate policies rather than folding everything into unpaid leave. |
If an employee has a statutory right to time off, handle it under the correct statutory policy. Do not treat it as ordinary discretionary unpaid leave just because it is unpaid.
Approval rules for discretionary unpaid leave
For discretionary unpaid leave, the policy should give managers enough structure to be consistent without promising that every request will be approved. A simple approval test works well for smaller employers.
Copy-and-paste unpaid leave policy template
Use this as a starting point and adapt it to your contracts, handbook and working arrangements. It is deliberately plain-English so a small business can actually use it. Prefer to edit it in Word? Download the same policy as an editable document below.
Unpaid leave policy template (UK)
The full discretionary unpaid leave policy as an editable Word document. Drop your details into the bracketed fields, read the drafting notes, then delete them before issuing.
- 9 clauses with statutory leave carve-outs built in
- Sample wording for every section
- Blue placeholders show where to add your details
- Drafting notes explain the choices only you can make
- Document control panel and disclaimer included
| Clause | Suggested wording |
|---|---|
| Purpose | This policy explains how employees may request unpaid leave and how the Company will consider discretionary unpaid leave requests. |
| Scope | This policy applies to discretionary unpaid leave. It does not replace statutory rights such as time off for dependants, carer's leave, unpaid parental leave, maternity leave, paternity leave, adoption leave, shared parental leave, neonatal care leave, sickness absence or parental bereavement leave. |
| Request process | Employees should request unpaid leave in writing as early as possible, giving the reason, requested dates and whether any alternatives have been considered, such as annual leave or flexible working. |
| Approval | All unpaid leave requests must be approved by the employee's manager before the leave is taken. The Company will consider the reason for the request, business needs, staffing levels, previous requests and the need to apply this policy consistently. |
| Pay | Approved unpaid leave will not be paid. The Company will confirm the payroll deduction method before the leave starts where reasonably possible. |
| Annual leave and benefits | The Company will explain how any approved unpaid leave affects annual leave, benefits, pension contributions and other contractual terms before or when the leave is approved. |
| Unauthorised absence | If an employee takes time off without approval, or does not follow the relevant absence reporting process, the absence may be treated as unauthorised absence and may be handled under the disciplinary procedure. |
| Record keeping | The Company will record approved unpaid leave, refused requests and payroll instructions in the employee's absence record. |
| Review | This policy will be reviewed periodically and may be updated to reflect changes in employment law, ACAS guidance, business needs or Company procedures. |
Keep the wording simple, but do not skip the carve-outs for statutory rights. That is the difference between a useful unpaid leave policy and a risky catch-all clause.
Records, payroll and holiday entitlement
Unpaid leave is not just a manager decision. It affects the absence record, payroll instruction and sometimes the employee's wider terms. Your process should make three things clear before the leave starts:
- the exact dates or half-days being approved;
- the amount of pay that will be deducted, or how payroll will calculate it;
- whether the absence affects benefits, pension contributions, bonus arrangements or other contractual terms.
Be careful with annual leave. Some statutory family leave rights protect employment terms and holiday accrual. For ordinary discretionary unpaid leave, the position may depend on the contract, policy wording and length of absence. The safe operational rule is simple: do not leave this implied. Explain it in the policy and confirm it in the approval note.
Book Time Off is useful here because approved unpaid leave can be recorded as its own leave type, separate from annual leave, sickness, compassionate leave, bereavement leave and dependants leave. That keeps the team calendar clean and avoids silently deducting unpaid time from holiday allowance.
Manager checklist
Before approving unpaid leave, ask these questions:
Is it the right policy?
Check whether the request should sit under annual leave, sickness, dependants, carer, parental, compassionate or bereavement leave instead.
Can the team cover it?
Check staffing levels, deadlines, holiday clashes and customer impact before saying yes.
Is the decision consistent?
Compare similar previous requests and record the reason if this decision is different.
Has payroll been told?
Confirm dates, pay deduction and leave type before the payroll cut-off.
Related policy and absence guides
Employee time-off policy templates · Absence management guide · Time off for dependants · Unpaid parental leave · Compassionate leave
Sources
| Source | What it supports |
|---|---|
| ACAS · Asking for and taking holiday | Unpaid leave requests where a worker has run out of holiday or does not want to use holiday. |
| GOV.UK · Time off for family and dependants | Reasonable unpaid emergency time off and compassionate leave context. |
| GOV.UK · Unpaid parental leave entitlement | 18 weeks unpaid parental leave per child and the 4-week annual cap. |
| GOV.UK · Carer's leave | One working week of unpaid carer leave in a 12-month period. |
| ACAS · Unauthorised absence | Distinction between authorised unpaid leave and absence without permission. |
| GOV.UK · Employee rights when on statutory leave | Rights and terms during maternity and other statutory family leave. |
FAQs
Does an employer have to agree to unpaid leave in the UK?
Usually no. Outside specific statutory rights such as unpaid parental leave, carer leave and time off for dependants, unpaid leave is normally a matter for the employment contract, handbook or employer discretion. A clear policy should explain how requests are made, who approves them and when the business may refuse.
Can unpaid leave be used when someone has run out of holiday?
Yes, a worker can ask for unpaid leave if they have run out of holiday or do not want to use holiday entitlement, but it is generally up to the employer whether to agree. The employer should apply the policy consistently and record the decision.
Does unpaid leave affect holiday entitlement?
It depends on the type of leave and the contract. Statutory family leave rights usually protect employment rights, including holiday accrual. For discretionary unpaid leave, employers should explain in the policy how holiday, benefits, pension and length of service are treated and take advice for complex cases.
Should unpaid leave be paid as holiday instead?
Not automatically. If the employee wants paid annual leave, the normal holiday request rules apply. If they ask for unpaid leave, the employer can agree unpaid leave, suggest annual leave, or refuse if there is no legal right and the absence would cause problems.
What should an unpaid leave policy include?
A good unpaid leave policy should explain eligibility, the request process, notice, approval factors, whether the leave is paid or unpaid, evidence, maximum periods, record keeping, payroll treatment, annual leave impact and links to statutory rights such as dependants, carer and parental leave.
Can unpaid leave become unauthorised absence?
Yes. If an employee takes time off without permission, or does not follow the reporting process, the employer may treat it as unauthorised absence. A good policy should separate authorised unpaid leave from emergency leave, sickness absence and absence without permission.
This guide is general information for UK employers. Employment law can depend on contracts, facts and timing. If you are dealing with a dispute, dismissal risk or complex leave request, contact ACAS or take professional advice.