Understanding Unpaid Leave in New Zealand
Unpaid leave refers to a period of time an employee takes off work for which they do not receive pay. In New Zealand, an employee's entitlement to unpaid leave is not generally an automatic right unless it is specifically provided for by legislation or through an agreement with their employer.
Statutory Entitlements to Unpaid Leave
Certain types of unpaid leave are mandated by New Zealand law, providing employees with a right to take time off without pay under specific circumstances.
Parental Leave
The most significant statutory provision for unpaid leave is parental leave, which is governed by the Parental Leave and Employment Protection Act 1987. This Act provides for various types of leave related to the birth or adoption of a child:
- Maternity Leave: An eligible employee who is pregnant is entitled to a period of unpaid maternity leave in addition to any paid parental leave. The total period of parental leave (paid and unpaid combined) an employee can take depends on their circumstances but can extend up to 52 weeks [Source: Parental Leave and Employment Protection Act 1987, s 2(1) (definition of parental leave), s 26].
- Partner's Leave: A partner of an eligible employee may be entitled to unpaid leave to care for the child, generally for up to 1 or 2 weeks depending on their length of service [Source: Parental Leave and Employment Protection Act 1987, s 27].
- Extended Parental Leave: Employees may also be entitled to extended parental leave (unpaid) to prolong their total period of leave up to 52 weeks, or even an additional 26 weeks in specific situations [Source: Parental Leave and Employment Protection Act 1987, s 29].
- Notice Requirements: Specific notice periods and procedures must be followed when applying for parental leave [Source: Parental Leave and Employment Protection Act 1987, ss 31, 32].
- Protection of Employment: An employee's position is generally protected during parental leave, with a right to return to their job [Source: Parental Leave and Employment Protection Act 1987, s 36].
Jury Service and Witness Duties
Employees summoned for jury service have a legal right to attend. Employers are not legally required to pay an employee for time spent on jury service, though jurors do receive a payment from the Ministry of Justice for attendance [Source: Juries Act 1981, s 61]. Similarly, while an employee has a right to attend court when legally required as a witness, payment for this time by the employer is not mandated by legislation and typically depends on the employment agreement.
Unpaid Leave by Agreement
Beyond statutory entitlements, unpaid leave can also be granted through an agreement between an employer and an employee.
Individual and Collective Employment Agreements
An employment agreement is a legally binding contract between an employer and an employee, outlining the terms and conditions of employment. Both Individual Employment Agreements (IEAs) and Collective Employment Agreements (CEAs) may contain specific provisions for unpaid leave, such as sabbaticals, extended personal leave for study, or other purposes [Source: Employment Relations Act 2000, s 59, s 64]. These provisions form part of the agreed terms of employment.
Ad-Hoc Unpaid Leave
Employers and employees can mutually agree to a period of unpaid leave for reasons not covered by statutory entitlements or existing employment agreements. This often occurs when an employee has exhausted other leave entitlements (e.g., paid sick leave or annual leave) or requires time off for personal reasons. Any such agreement should ideally be put in writing to ensure clarity for both parties. Variations to an employment agreement must be agreed to by both parties [Source: Employment Relations Act 2000, s 63A].
The Role of Good Faith
Under New Zealand employment law, employers and employees must deal with each other in good faith [Source: Employment Relations Act 2000, s 4]. Good faith involves being active and constructive in establishing and maintaining a productive employment relationship, being responsive and communicative, and not acting in a way that misleads or deceives. This obligation applies when discussing requests for unpaid leave, negotiating the terms of such leave, and managing the employee's return to work. While good faith does not compel an employer to grant unpaid leave (unless there is a legal entitlement or prior agreement), it does require them to genuinely consider requests and communicate decisions clearly and respectfully.
Impact on Other Employment Entitlements
Taking unpaid leave, particularly for extended periods, can affect other employment entitlements:
- Accrual of Annual Leave and Sick Leave: Generally, an employee does not accrue annual leave or sick leave entitlements during periods of unpaid leave, as these are typically based on days worked or hours paid. However, specific rules apply to parental leave, where an employee's continuous service is generally deemed unbroken for the purpose of calculating entitlements upon their return [Source: Parental Leave and Employment Protection Act 1987, s 35]. For other forms of unpaid leave, the impact depends on the employment agreement or the specific arrangement made.
- Public Holidays: If a public holiday falls during a period of unpaid leave, the employee is generally not entitled to payment for that public holiday, as they would not otherwise have worked on that day and would not have been paid for it [Source: Holidays Act 2003, s 49 (regarding public holidays and otherwise working days)].
- Superannuation/KiwiSaver: Contributions to superannuation schemes or KiwiSaver may be affected, as these are often tied to earnings. This would depend on the terms of the specific scheme and any agreement with the employer.
Employer Considerations
Employers considering requests for unpaid leave typically weigh factors such as operational requirements, the reason for the leave, the requested length of leave, and the employee's work history. Employers must also consider their good faith obligations under the Employment Relations Act 2000 and ensure any decisions are made fairly and consistently.
When to Seek Independent Legal Advice
Individuals and organisations seeking specific guidance on employment matters, including unpaid leave entitlements, obligations, or disputes, should consult with a qualified legal professional. The Ministry of Business, Innovation and Employment (MBIE) provides information and guidance, and free advice is available from Community Law Centres.