At the time of asking staff whether they have enjoyed their time off work, it is not uncommon for the phrase “I need a holiday just to get over my holiday” to be uttered. It is a common gripe for many workers that they do not get enough time off work or, when they do take holiday, the benefits are often lost far too quickly on their return to work. Trying to fit all personal pursuits and commitments within their holiday allowance can create feelings of imbalance in their personal life.

To provide staff with better leave benefits, more businesses are turning to the concept of unlimited holiday. Perhaps the most well-known business currently offering unlimited leave is Virgin Management, although these policies have been around since the 1990s. Generally, more common in technology companies, LinkedIn, Netflix and Glassdoor have joined the list of those that offer unrestricted leave entitlements. Seemingly thought of as a “quick win” for current staff and those new employees being brought into the business, does an unlimited policy create management hell or heaven?

The law

Under the Working Time Regulations 1998, workers are entitled to receive 5.6 weeks’ paid leave. For a full-time worker working five days a week, this works out as 28 days’ holiday in each leave year.

This amount of holiday is a minimum entitlement and there is no specified maximum, therefore, organisations can choose to provide their staff with more holiday. Usually, an increased amount of leave will be offered to all staff members, although certain companies will offer greater holiday leave once an employee meets a certain length of service, subject to age discrimination rules.

Unlimited holiday leave is a new concept which provides no maximum limit on holiday leave, with employees being placed in a position to decide how much holiday they take.

Management heaven?

On the face of it, offering unlimited holiday leave as an employee benefit within your organisation is likely to lead to advantages across a number of areas, including improving recruitment success, retaining current staff members and increasing productivity. After all, happier employees are well known to be better workers. This scheme also shows the trust and value that an employer has in its staff, in turn increasing employees’ feelings of loyalty and engagement in the company.

Unrestricted leave entitlements can also save management time as there is a reduction in the administrative process surrounding holidays. Where there is a strict holiday leave entitlement in place, managers will need to review every holiday request submitted to ensure the particular employee has enough leave remaining to take this. If they don’t, then the request will be declined which is likely, in most cases, to be followed by another request where the same process has to be undertaken. Managers will also need to give proactive reminders to employees about their level of outstanding leave during the holiday year to encourage them to use this up. With unlimited leave policies, it is likely that this administrative time is either reduced significantly or removed in totality, as leave is simply taken without restriction.

Managers can use certain rules to ensure their team’s objectives are being met and employees continue to spend an appropriate amount of time at work. Measures include implementing specific targets or minimum periods that the employee has to complete before unlimited leave kicks in. This ensures all employees are working towards the same standard and makes sure that workloads are being managed alongside the leave benefit.

Management hell?

With any unlimited entitlement where employees are put in charge of their own leave, there is the potential for some to take advantage. Certain employees can exploit the system and overtake leave which leaves their colleagues with an unfair proportion of the workload. This can cause colleagues to become overburdened and stressed; the opposite impact than was intended by this initiative. An increasing number of disputes and internal conflict may arise, with management time being used to resolve matters or handle formal grievances.

An employee can also become overwhelmed by their own workload if they have failed to manage this successfully around their unlimited leave. Employees who are currently on holiday may extend their leave in order to avoid returning to work at a difficult time, or sickness absence following holiday periods may increase as staff’s physical and mental health is impacted by their impending return.

There is an alternative argument that an unlimited leave policy actually leads to employees failing to take sufficient time off work. This is because the decision of when to take leave, and how much leave to take, is solely left to the employee so they are reluctant to book holiday if they have a lot of tasks outstanding, in the run up to projects or even because they think it makes them look less committed to the role. This creates a “guilt” connotation that can lead to employees becoming overworked and burnt out. A risk that employees are failing to have the statutory minimum of time off work is also created.

Introducing unlimited leave

The clearest way to introduce an unrestricted scheme is to set this out in writing, ensuring a policy contains any rules relating to the scheme and how this will work in practice. It will be key that the policy reminds staff that they should be taking at least 5.6 working weeks of holiday in each leave year and set out any booking requirements.

Managers will then be responsible for monitoring the amount of leave staff are taking, ensuring workloads are being met and encouraging employees to take their leave. Reminders are likely to be required with managers acting proactively towards the end of the leave year to ensure that employees have taken at least their legal minimum. Having such a perk also allows managers to focus on real staffing issues that they need to handle in a timely manner, rather than spending time dealing with complaints from employees who feel they are not being provided with sufficient holiday benefits.

Last reviewed 10 April 2019