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Leave without pay, how does it work?

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What is it about?

In principle, an employee is entitled to a number of statutory days off depending on the number of days actually worked and/or assimilated in the previous calendar year. In Belgium, the number of statutory holidays is 20 (proportionally reduced for part-time employees).

Is the employee "entitled" to leave without pay?

No. Leave without pay is not a right that is acquired by the employee, but this is an agreement between the employer and the employee. Indeed, the absence is only justified in case of incapacity for work or illness, on public holidays, during the annual vacation and for time credit.

However, the employee can always request holidays without pay from his/her employer.

In that case, the employee and the employer must agree on the days of unpaid leave (i.e. a temporary suspension of the employment contract) and neither party is obliged to agree to the other's request.

Leave of absence without pay means the absence of the worker without pay, due to the suspension of the execution of his employment contract, agreed by mutual consent between the employer and the worker.

Always check if there is already a practice (habit) or a regulatory provision (employment contract, work rules, CLA) within your company which regulates the issue of unpaid leave.

In concrete terms?

The agreement between the parties

When the parties agree on unpaid leave, they must in principle also agree on all the modalities of this leave.

However, the law does not regulate the unpaid leave so that a verbal agreement is sufficient.

However, it is highly recommended to lay down the agreed terms in an agreement between employer and employee in order to avoid possible discussions and disputes. The terms that must be set out in this agreement are as follows: the number of days of unpaid leave, the start and end dates, whether they are half days or full days, the retention of a benefit in kind and any financial contribution by the employee, ...

Consequences for the employee

Leave without pay is not without consequences for the employee!

As the name indicates, leave without pay means that the employer does not have to pay the salary during the suspension of the employment contract.

The absence of work and pay has concrete consequences for the situation of the employee:

  • He/she is not entitled to the fringe benefits linked to the effective exercise of his/her profession: mobile phone, meal vouchers, company car, etc. Unless the employer decides otherwise, these items must be returned during the leave without pay. Attention : if the employee keeps his extralegal benefits, these are no longer a consideration for his work and can be considered as salary.
  • End of year bonus: in case of a leave without salary, the employee will have worked less days during the year than foreseen in the contract, which can have an impact on his possible end of year bonus.
  • Social security : since no salary is paid, the employee no longer pays contributions, which inevitably affects his social rights (health insurance, pension insurance, right to unemployment benefits, right to annual leave). Remark : the employee can choose to contribute himself through a "continued insurance", for a maximum period of 3 months per year.
  • Protection against dismissal: during the leave without pay, the employment contract of the employee is suspended and he/she does not benefit from any protection against dismissal. In case of dismissal during this period, the employee is entitled to his/her notice period, which starts as from the end of his/her unpaid leave.
  • Annual leave: a day of leave without pay is not assimilated to a working day and can therefore influence the employee's holiday pay.

Carrying out another activity during unpaid leave?

Yes, the worker has the right to exercise another (temporary) employment during his/her unpaid leave.

He can thus be bound to several employers, but must refrain from any act of unfair competition.

Conclusion

Leave without pay must be mutually discussed: the employee and the employer must come to an agreement.

Also, remember to properly inform your employees. As explained above, unpaid leave does have consequences for the employee and he is not always aware of it.

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Heidi Vergauwe

Dedicated and meticulous Payroll & HR Advisor, always willing to go for the extra (s)mile!