Unlimited holiday allowance for employees has become a badge of honour amongst companies in Silicon Valley in recent years, with businesses such as Netflix and Virgin first establishing this novel concept.
The concept has been associated with the tech and advertising industries however, recent times have seen a small but steady increase in UK-based employers choosing to add this “perk” in order to attract new talent and reward loyal employees, even in more mainstream businesses. This represents a shift in the value exchange between employers and employees – employers today are not always able to give employees the same financial rewards as they once were and have to be more creative with the packages offered to employees.
What would be the legal implications of such an approach in Northern Ireland?
Whilst it may be some time before such a practice becomes commonplace in Northern Ireland, we have set out some of the key legal considerations for employees and employers alike:-
- Under the Working Time Regulations (NI) 1998, full-time employees are entitled to a minimum of 5.6 weeks annual leave – 28 days. Part time employees are entitled to the pro-rata equivalent. It has been suggested that the introduction of an “unlimited holiday policy” might lead to staff taking fewer holidays. Beware of information from the USA, (where “unlimited holiday” originated) as it is the only major advanced economy in the world that does not guarantee workers paid holidays. Bear in mind that in Northern Ireland, there is a statutory minimum holiday entitlement and employees must take their leave entitlement. Employees, even if they prefer, should not be paid for holiday rather than taking it if it means less than statutory leave, as this is a breach of the Working Time Regulations (NI) 1998.
- Undoubtedly, for unlimited holiday leave to be an effective approach in NI, employers should carefully consider drawing up a policy and procedure, setting out the obligations and expectations on employees and employers when applying the “unlimited holiday” policy as they should with a range of work place practices. Reference should be made to the applicable law in any such policies and careful consideration should be given so that a fair, balanced and non- discriminatory approach is taken.