Wish you were here: unlimited holiday

angelic hen

It looks too good to believe! Unlimited holiday – are you serious? Like everyone else who heard the news last week, I was as inspired as I was disbelieving. Surely there must be a catch?

If you haven’t guessed it already, I’m referring to Sir Richard Branson’s recent announcement offering Virgin staff unlimited holiday, with the time and date to be chosen at their discretion. There’s no need to ask for approval, nor say when the employee plans to return to work, as long as the absence would not damage the business. It’s employee engagement (or is that disengagement?) taken to the extreme. As long as the employee is productive and hitting targets, they can choose their own free time and manage their work/life balance at their will.

It is an audacious plan, no doubt. But one that is practiced by a number of innovative and successful companies (like Netflix). It’s creative and individual-centred approach is in keeping with the Virgin philosophy. And yet for all its benefits it appears somewhat opaque, perhaps – dare I say it – deliberately vague and hazy. Read between the lines and you see that, under this new plan, the onus on management and responsibility has shifted to the employee, perhaps putting them at a higher level of accountability than desired, because no matter how free and liberal the plans appear, when it comes to expectations most companies need clear rules before ambiguity turns to anarchy.

For this plan to work in reality, rather than on paper, it will all boil down to the employer (Virgin) trusting its employees, which is key to good employment relations. How this trust manifests is a balancing act: does the employer cast out its staff knowing they will be invigorated by the freedom, or does the employee enclose them within the company’s inner sanctum? A lot of employees can find micromanagement demoralising, which in turn can affect employee productivity. By giving employees more responsibility to manage their own holiday entitlement, it is a clear demonstration of trust on behalf of Virgin.

From a technical standpoint, regardless of the unlimited holiday dangling carrot, employers will have to meet their statutory requirement in ensuring employees are encouraged to take the statutory minimum leave (currently 28 days – pro rata for part time employees). Anything over and above statutory holiday would be an extension of entitlement, and it would be at the employee’s discretion whether some, all or none of this extension was paid leave – although I would be very surprised if employers offered unlimited paid holidays!

From an employment law perspective, if employers decide to move towards the ‘Virgin Way’, it would be prudent of them to design and deliver clear policies that address holiday entitlement and holiday pay. All employees would be aware of their rights and in full knowledge that any breach of these policies would result in disciplinary action being taken. This way, the employer can retain some control over its business and avoid any detrimental impacts or abuse that may arise from an ambiguous holiday policy. Furthermore, if employers decide to offer unlimited holiday leave, they should clarify how they intend to continue monitoring absence from work, or whether any attempts will prove ineffective and should be scrapped.

On the surface, Richard Branson’s unlimited holiday scheme looks a great offer that leaves the majority of non-Virgin employees drooling into their morning coffee. Yet scratch beneath the surface and things appear increasingly ambiguous, particularly surrounding implementation, performance management and accountability. As such, and often the case with liberal policies, I think more regulation will need to be added to ‘Virgin Way’ over time to avoid the inevitable complexities that arise when business and freedom collide.