As reported by the BBC a city firm has announced that it is offering unlimited holidays to its employees. This might seem a bit too generous or even foolish by the employer or perhaps an amazing offer for the employee, but is it as good as it sounds?
The concept of unlimited holidays was probably first seen in the mid-90s
with high tech firms in the US including IBM, Glassdoor, and LinkedIn. Richard Branson introduced a similar policy in 2014 for his office staff at Virgin Management.
Some businesses have claimed this approach to holidays helped their employees to create a better work-life balance, making employees happier and more productive. However, others have had a far worse outcome with anxiety over the expectation of number of days to be taken being an issue, as well as pitting employee against employee in promotion battles, where the winner tended to have taken fewer days off and worked “harder”.
In 2018 a business, CharlieHR, abandoned this approach saying that their employees had been too anxious about not knowing the limit, with people saying that they’d love to know where the line is. Would it be OK to take 35 days or 25 days? They wanted to understand the expectation. With this feedback they ended up cancelling the perk in favour of alternative benefits such as more flexible working hours.
The recent reports from from the BBC, about the city firm Finncapp, says that employees will have to take at least four weeks leave perhaps preventing some of this anxiety issue.
Apart from the expectation of a productivity increase, another employer benefit could be that businesses do not need to account for holidays they would previously have owed to employees. Employees may stand to lose them if they leave the business as they will not be paid for unused holidays. This is also perhaps especially poignant, and more relevant for the majority of workers, after last years’ temporary adjustment to the rules on carrying over untaken holiday from year to year. This allowed workers to carry over leave they have been unable to take due to the Coronavirus outbreak into the next two leave years.
The history of paid leave entitlement in the UK is relatively short. Trade unions began to campaign for a paid holiday for workers in 1911 but not until 1938 was the statutory right to holidays gradually introduced for workers, whose minimum rates of wages were fixed by trade boards. This initially was the right to one weeks’ holiday per year! In 1993 the EU Working Time Directive gave workers the right to paid annual leave of at least four weeks, this was put into law in 1998 with the UK government increasing the entitlement to 28 days, for a full-time worker, or 5.6 weeks equivalent. The increase being probably due to employer confusion over the inclusion of eight Bank Holidays. Many employers give an enhanced entitlement in employees' contracts.
So how does this entitlement compare around the world?
There are many intricacies and adjustments for length of service in different countries but the basic entitlement for a snapshot of countries around the world is seen below
As can be seen the EU is very low down the list, however most member states have a higher legal entitlement than this, seen by a number of countries higher up in the list.
The UK is mid table and perhaps the most surprising aspect in this table is the position of the USA. It being the only developed nation that does not have a statutory requirement and all leave is effectively treated as a perk.
Typically, American businesses may give between 5 and 15 salaried days off a year. Research has shown that one in four private sector workers does not receive any paid vacation time in the US.