A growing number of employers are introducing ‘life leave’ for employees. Should your organisation be doing the same?
We explore what is how, how it works and the potential benefits (and disadvantages) of introducing it into your workplace.
What is life leave?
Life leave is a broad type of leave that lets employees have time off simply to do non-work related things. This could be anything from being at home so that work can be done on your property, having a day off for your birthday or even just taking a mental health day.
Different types of life leave
There’s no single template available which means different employers implement it differently.
For instance, EY Australia introduced unpaid life leave for its employees in 2019, giving them between six and 12 weeks to ‘explore interests’ outside of work, such as travel or study. In contrast, in 2020, CBA introduced three days’ paid life leave for its employees.
CBA’s policy had its critics because, at the same time, some employees’ sick leave entitlements were reduced from 15 days to 12 days. CBA also only allowed employees to take the life leave entitlement if they’d used up their entire annual leave entitlement of previous 12 months and had less than a total 20 days’ accrued annual leave.
Still, an internal survey released by CBA showed an overwhelming majority of employees – as many as 80% – welcomed the move.
Why wouldn’t you just increase annual leave?
Annual leave is different from life leave because it is a statutory entitlement for all employees regulated by the National Employment Standards (NES).
That means the NES provide for the situations under which an employee is entitled to annual leave and outline the minimum employers must provide. Importantly, they also specify that it ‘accumulates’ – something which isn’t necessarily the case for life leave. Also, under many Awards and Agreements, employees are entitled to a leave loading when they take annual leave.
By introducing this new type of leave, employers have greater flexibility and can stipulate whether it accumulates, whether it’s paid or unpaid and whether leave loading applies.
The pros and cons
The advantages of introducing life leave into your workplace include the following.
- Employee motivation and retention. It can be used as an effective way to boost morale and productivity at a time when wages are rising.
- Flexibility. To some extent, you can control when and how employees take life leave, whereas other types of leave can be more regulated.
- Breadth of use. Employees often like alternate leave because they’re usually not constrained in how they can use it.
- Attracting new employees. In a time when the war for talent is intensifying, this can be a great way to stand out from the crowd.
- Millennial appeal. Studies show that millennials value flexibility and diversity, and this leave can be a good way to appeal to these newer employers.
- Cost effectiveness. Depending on your obligations, you may not have to pay leave loading or allow employees to accumulate leave.
There could, however, be some downsides to introducing life leave too.
- The cost. Regardless of any cost savings compared to annual leave, giving all your employees any form of extra leave can be a costly exercise.
- Workplace absences. If you’re a business that’s already ‘pushed to the limit’, giving staff extra time off may mean you’re less productive.
- Unnecessary. If employees already enjoy other perks, such as additional annual leave or sick leave, introducing even more leave may be of limited benefit.
What alternatives are there?
If it all seems a bridge too far for your workplace but you want some of its benefits, you could always introduce more paid – or unpaid – annual leave. Alternatively, a lot of workplaces we work with have perks such as a day off for a birthday, a day off for family commitments, an extra long weekend or two a year or flexible public holidays. Some even offer unlimited leave.
Should your workplace introduce life leave?
Whether or not you should introduce life leave at your workplace depends on a number of factors, not least of which is the type of work you do. After all, while life leave lends itself to service-based jobs – such as accounting or financial services – it would be a much trickier proposition in industries that require someone to be present – such as manufacturing or retail.
That said, the flexibility that comes with life leave – both from an employer and employee perspective – makes it an increasingly attractive proposition.
If you’d like to know more about introducing it into your workplace, get in touch.