The length of branch indicate time in years (or whatever standard objective unit of time). It would make little sense (although one could argue that it'd be interesting to look at) to build a tree of life where time is in generation as the generation time varies so greatly among lineages.
It is important to not confuse the mean of estimating the length of a branch to the length of the branch itself. For this I will just give you two technics used to estimate such branch length.
Number of substitutions
Now, we estimate this time based on a number of method. One of them is the number of substitution at neutral sites. The number of substitution at neutral sites over $n$ generations is equal to the mutation rate $\mu \cdot t$. That's a classic result, it is due to the fact the there are $2 N \mu$ mutations at each generation, each of them having probability $\frac{1}{2N}$ to fix (given they are neutral) and therefore the neutral substitution rate is $\frac{2N\mu}{2N}=\mu$.
So, using substitution rate we can estimate the number of generations and by estimating the generation time, we can estimate real time (in years).
Most of the time the length of the branches are simply the number of observed substitutions but as not all phylogenetic trees are made from such data, one must consider the branch length in phylogenetic trees in general as being measure of time.
Fossil data
Other methods exist to estimate the length of branches such as fossil datation for example. Here we directly estimate the time in years, not in generation first.
It is important not to confound the mean of estimation of time with