Sabbaticals are periods of paid or unpaid time away from work which are agreed between the employer and employee. One of the key points to be agreed on is whether the employment contract remains in place during the sabbatical.

Historically sabbaticals have been a benefit for employees. They are agreed for a variety of reasons including rewarding long service, travel, research or acquiring new skills, voluntary work, alleviating stress and burn out or to take care of health. In current times the motivation behind sabbaticals may be more for the employer’s benefit to provide alternatives to redundancy.

Businesses that have not yet returned to previous activity levels due to COVID-19 may be contemplating redundancies and potential alternatives. Employers affected by the downturn can offer unpaid sabbaticals instead of redundancies. Employees may agree to take a sabbatical if the alternative is being made redundant, especially until the COVID-19 risks further reduce. Sabbaticals are one method of reducing salary overheads while preserving valued employees and overall morale.

Differences between unpaid leave and career breaks

Sabbaticals are sometimes referred to interchangeably with the terms career breaks or unpaid leave. The name used is only one factor to take into account when determining the legal position.

Unpaid leave is an umbrella term covering all types of leave without pay. This includes both authorised and unauthorised unpaid leave. The main scenarios include:

  • Sabbaticals
  • Career breaks
  • Time off for an emergency involving a dependant
  • Unpaid parental leave
  • Time off work for certain public duties
  • Jury service
  • Doctor’s or dentist’s appointments
  • Compassionate and bereavement leave
  • Lay-offs
  • Reservist duties (although some financial assistance may be available)

Unpaid leave generally applies to shorter periods of time than career breaks and, as with sabbaticals, the contract usually stays in place.

Career breaks describe longer periods of unpaid leave, during which the employment contract is usually discontinued. Like sabbaticals, the term 'career break' has no particular legal meaning. An example of a career break is a parent deciding not to return to work after maternity, paternity or adoption leave has ended, to continue caring for young children. Some employers may require employees to resign to begin a career break but may agree to re-employ them on their return. In other cases, continuity of employment will be preserved for example when an employer agrees a six month sabbatical to reward an employee for long service. Career break periods will not normally count towards years’ service under a pension scheme.

Sabbaticals are often for shorter periods and, unlike career breaks, the contract continues. They are often unpaid but can be fully or partly paid by agreeing a percentage of normal salary. For example, an employer may have a policy of allowing a six-month sabbatical on 30% of pay to reward long service of 10 years or more. Other employers may decide to offer unpaid sabbaticals as a means of reducing salary payments once the furlough scheme ends. After sabbaticals employees normally return to the same job or a similar one.

There is no statutory right to take a career break or sabbatical, but many larger employers or those in the public sector (for example education) may offer such breaks, at their discretion.


What the law says

There are no specific employment law rules governing sabbaticals in the UK, although the right to request flexible working may be used by employees to seek a variety of working arrangements including sabbaticals. In some other countries there are specific regulations, for example, guaranteeing sabbaticals after a number of years’ service. Due to the lack of regulation here, the legal position is mainly covered by the law of contract which in turn relies on what is agreed.

Flexible working requests for sabbaticals

All employees have a right to make a flexible working request if they have:

  • worked for the employer for at least 26 weeks; and have
  • not made any other flexible working request in the last 12 months.

The request process can cover a range of working arrangements, for example reducing or changing working hours, job sharing and longer career breaks or sabbaticals. In current times employers may be keen to agree to requests for unpaid sabbaticals due to the salary savings but employers can refuse flexible arrangements for a number of specified business needs.

Employers should consider requests fairly and follow the Acas Code of Practice on flexible working requests. For further information see our factsheet on flexible working practices and our Q&As on the right to request flexible working.


Status of employment contracts during sabbaticals

A key legal issue for HR to address is what happens to the employment contract (including employee benefits and continuity of service) during the sabbatical.

If the sabbatical is paid, usually the contract remains in force, which means that the employee's continuity of service is preserved.

During unpaid sabbatical leave the contract of employment often does not remain in force. However, the employee's continuity of service may be preserved provided the employer and employee agree that this is the case.

There are some benefits to the employer if the contract continues, for example the employee retains a duty of good faith and should not reveal confidential information. The employee should also not, without agreement, work for another employer. Where the employment contract continues, the ongoing contractual benefits will be negotiated between the parties. Some terms, for example payment of salary, benefits and overtime will be suspended or reduced.


HR’s role

Because there is no specific legislation covering sabbaticals, HR has a relatively free rein to set sabbatical policy and the terms of sabbatical agreements.

Some of the wider matters to be addressed include:

  • Criteria

Are sabbaticals offered to all employees or only to employees within a certain role, or with a certain length of service? The sabbatical option will often be discretionary; employers may be in favour of sabbaticals now but may not want a binding commitment to extended periods of leave in the future.

  • Staffing

Sabbaticals must be offered whilst ensuring adequate cover. Employers may need less staff now, but needs can increase, so employers may wish to be able to recall employees when the situation changes.

However, HR must also carefully consider the content of sabbatical agreements and policies.


Content of sabbatical agreements and policies

As well as a specific sabbatical agreement with the employee, employers should have a written sabbatical policy. HR can decide not to have an overall policy and simply rely on the more ad hoc system of individual agreements, although this is usually inadvisable. A written policy prevents misunderstandings and can protect against discrimination and other claims later on. The policy will explain the organisation's approach to sabbaticals and reduce the risk of expensive and time-consuming disputes. For example, problems may arise if one employee is approached about a sabbatical and another is not. Part-time employees must be given the same consideration as their full-time counterparts and any selection criteria used should not create an imbalance for those with other protected characteristics such as age and disability.

Regardless of whether there is an overall policy, employers should always discuss and set out in writing the terms and conditions that will apply for each employee during the sabbatical. Guarantees of re-employment, if any, must be clearly communicated to avoid any later disagreement.

HR should address the following either in the individual agreement or the policy or in both.

Agreements:

  • Continuity

The employee’s continuity of service can be preserved so that they remain an employee. Continuity governs matters such as whether the employee would qualify to bring an unfair dismissal claim. If the sabbatical is unpaid, the contract may be terminated with an offer to re-employ after the sabbatical.

  • Return 

The employer must decide upon the arrangements and date for the employee’s return to the workplace. HR must address the extent to which any right to return is guaranteed, what kind of job role will be offered and on what terms. The return to work date needs to be agreed up front. Options when an employee returns from sabbatical include: 

  • reinstatement to the same role, effectively guaranteeing the old job back
  • a job of equivalent status and on terms no less favourable than before
  • re-employment in a suitable position without the same job or an equivalent being guaranteed.

You should address what happens if there is no longer a role for the employee, as well as  whether the sabbatical can be prolonged or shortened by either party and on what notice. Obligations to return to work for short periods for training or keeping in touch may also be included.

By way of example, sabbatical leave is available in the NHS for anyone with 12 months’ service with a minimum sabbatical length of three months and a maximum of five years. For sabbaticals of under a year the employee returns to the same job, and for sabbaticals longer than a year NHS workers return to a similar one.

  • Limitations  
Agreements should confirm any limitation on working for competitors during sabbatical. Whether the employee remains subject to confidentiality and good faith obligations and any restrictive covenants should be confirmed.
  • Annual Leave  
Paid annual leave will accrue if the contract continues during the sabbatical. To accommodate holiday accrual, employees can take their holidays at the beginning or end of the sabbatical. An unpaid sabbatical agreement where the contract continues should still include payment for the statutory minimum leave period.
  • Pay 

Some payments, such as a percentage of normal pay, may continue during the sabbatical. Some employers link sabbaticals with career growth and will pay something like 30% of salary for employees who do volunteer work or undergo professional training. Claw back provisions can provide for repayment of money received during the employee’s absence if he or she does not return or remain at the organisation after their return for a specified period. Even for unpaid sabbaticals the applicable rate of pay on return will need to be agreed.

  • Benefits

Sabbatical agreements may confirm suspension of or contractual provision for pensions and other benefits, including car allowances or private medical insurance. Policies should specify if sabbatical leave counts towards qualification for service-related benefits.

Policy:

  • Annual pay increments or reviews

Staff on sabbatical may not receive their annual increment. However, issues of indirect sex discrimination may arise, as women are more likely to take a sabbatical. There could also be a breach of the implied contractual term of trust and confidence, so providing for a review while the employee is absent or on their return is a safer course of action in a similar way to those on maternity leave. For example, HR could decide that increments will accrue only for sabbaticals of up to six months.

  • Bonuses and commission

Bonuses which retrospectively cover periods of performance at work must still be payable. Depending on the sabbatical length it may be appropriate to pro-rata payments and performance targets. Discretionary bonuses may be payable during sabbaticals depending on how the scheme is worded and operates in practice. Some payments can be refused for employees on sabbatical if the bonus or commission is payable to employees in active service. Employers should not automatically ignore employees on sabbatical just because the payment falls due during the sabbatical.

  • Promotion 

If employees on sabbatical are ignored for promotion during their absence this could amount to indirect discrimination so HR should ensure that absent employees are also considered in a round of promotions.

  • Further sabbaticals 

The policy should confirm whether more than one period of sabbatical leave will be available and that sabbaticals are at the employer’s discretion, not an automatic entitlement. It should be explained that continuance of a sabbatical or agreeing a further one is dependent on the employer's operational requirements at the relevant time.

  • Maternity, paternity and adoption pay 

Parents on sabbatical may not have entitlement to all the different forms of parental pay if the contract is suspended, for example there may be no entitlement to statutory maternity pay without employee status although maternity allowance may be payable. If the contract continues, the eligibility requirements for these statutory rights may be met.

  • Property 

Company property may need to be returned or retained for the duration of the sabbatical, such as laptops, mobiles, cars or security passes.

Common issues 

  • Can employers refuse to extend a sabbatical? 
Provided the sabbatical return date was clearly agreed, employers can refuse an employee’s extension request. Employers should clarify if the employee’s request for an extension is being made under the flexible working legislation. If so, employers should follow the Acas Code of Practice on flexible working requests and in any event should consider the request properly. Traditional reasons for refusing employees’ requests include:
  • poor performance
  • disciplinary warnings
  • increased demand for work
  • inability to find cover.

However, if the flexible working legislation is used, employers must identify specific business-related reasons for refusing the sabbatical extension.

  • What should employers do if an employee decides not to return from their sabbatical? 

If employees fail to return, the employer can simply accept this or treat it as an unauthorised absence in line with the disciplinary policy. In practice, there is little employers can do to force a reluctant employee to return. Some sabbatical agreements and policies incorporate claw back provisions, making any payments during the sabbatical repayable if the employee doesn’t return. HR management systems may be able to generate automatic reports to show when employees are scheduled to return to prompt HR into contacting the employee to manage the process.

  • Can an employee be made redundant whilst on sabbatical?

Employees on sabbatical who are still employed by the company can be included for selection for redundancy.

The terms of sabbatical agreements and any policy are critical. If continuity of employment has ended, then the employee is no longer employed and will not be entitled to redundancy.

If employment continues during sabbatical, then the same redundancy risks and obligations apply as to the rest of the workforce. Employers must consult with those on sabbatical in the usual way and consider all stages of the process including:

  • further sabbaticals
  • voluntary redundancies
  • seeking alternative employment
  • full pay during the notice period.

Employers must always consider alternatives to redundancies, because seeking to minimise or avoid them is an essential part of the redundancy process. Redundancy payments should take into account continuity of employment during the sabbatical.

Most employees on sabbatical are likely to have  worked for the employer for a minimum of two years so will be protected against unfair dismissal, for example if they are unfairly selected for redundancy

Four key points for HR to remember on sabbatical policies and managing the process

  • Put systems and records in place
HR may need to establish new systems and liaise with payroll to generate accurate data and keep the employee records active in the system. All arrangements, especially about continuity and return, should be recorded carefully and addressed in the documentation which will include:
  • a comprehensive policy
  • sabbatical agreement
  • emails or other documents recording discussions.

Systems should address:

  • departure and return dates
  • payroll data
  • bonuses
  • holiday entitlements
  • continuity of employment.

Promotion or pay reviews should be remembered for those on sabbatical. Set up a system (like an HR portal) to make it easy to share sabbatical policy documents with employees, and to keep in touch with employees during their absence.

  • Have a well written policy and agreements 

HR must think carefully about the terms on which sabbaticals are offered and ensure that these are clearly set out in writing to prevent later misunderstandings. Correctly drafted, these will protect against discrimination and other claims. Even with a written policy, employers should always set out comprehensive terms and conditions that will apply for each employee, including written agreement to returning on the specified date.

  • Think creatively 

As part of the process of seeking to avoid redundancies and reducing salary overheads, employers can protect talent and maintaining employee relations. Offering voluntary sabbaticals can avoid redundancy dismissals. See our post-furlough guide for additional alternatives to redundancy.

  • Keep in Touch 

HR will have an important role regarding the requirements for staying in touch. Employees who are on sabbatical for several months may become disengaged. HR should help employees to feel more involved so that their return is easier. The sabbatical policy and agreement can contain an obligation to stay in touch. Design a process to share information such as company updates and news may, or send regular email notifications to encourage engagement. The employee can be encouraged to return to the workplace during sabbaticals for occasional team meetings as well as for training.

HR will need to initiate discussions about reintegration into the workplace. These discussions need to take place before the employees return and  there will need to be catch up appointments afterwards, to check how the return is going. Training needs should also be discussed and agreed, especially for longer sabbaticals.

DISCLAIMER: The materials in this guidance are provided for general information purposes and do not constitute legal or other professional advice. While the information is considered to be true and correct at the date of publication, changes in circumstances may impact the accuracy and validity of the information. The CIPD is not responsible for any errors or omissions, or for any action or decision taken as a result of using the guidance. You should consult a professional adviser for legal or other advice where appropriate.

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