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Published: 10 August 2017
Area of Law: Employment

Unlimited holidays – how to make it work?

Flexible working is on the rise in the UK and companies are joining the trend by implementing policies such as unlimited holiday to attract and retain talent. Offering unlimited leave can be extremely positive in terms of employee engagement and loyalty, as well as being appealing to new recruits. However, the culture of a business is key in determining whether or not an unlimited holiday policy would be successful, as it is only likely to work in organisations where there is a considerable level of flexible working already, and where employees are responsible for their own workloads.

If that is not the case, such a policy could potentially result in an empty office, and for some employers an entirely absent workforce could never be an option, for instance, this would be impractical for production-based manufacturing businesses. Therefore, employers that wish to offer an unlimited holiday arrangement must ensure they set guidelines and procedures to be followed, such as:

  • Requiring staff to gain authorisation for proposed holiday dates in advance so that office coverage can be planned;
  • Putting measures in place to assess performance outcomes, for example by holding regular face-to-face performance reviews, in order to ensure employees are still meeting objectives and achieving results;
  • Establishing strong lines of communication internally to ensure the absence of key employees or teams does not have a detrimental impact on other individuals’ workloads and priorities. 

How to ensure employees do take time off

Employers should also be aware that implementing unlimited holiday policies can, in fact, result in employees not taking enough holiday, as they may no longer view holiday as an integral part of their compensation. Employers must keep a record of the holidays taken to avoid falling foul of the Working Time Regulations if they cannot evidence that employees have taken their statutory minimum holiday entitlement of 28 days. Failure to keep records is not only problematic in terms of the legal right to holidays, but will also make it difficult for employers to review statistical information to ensure the scheme is effective.

Without the clarity and guidelines for how holiday leave usually works, employers could see the opposite effect. Employees could end up spending longer at work, resulting in decreased productivity and overall wellbeing.

For such a scheme to work, besides having processes and procedures in place, an employer must trust its workforce and its employees must be sufficiently autonomous and self-motivated. Whether an employer’s workforce could be considered such, will no doubt dictate whether the implementation of this type of scheme would work.

"This is exactly why we like to work with people who understand the industry and can identify potential issues and create solutions."

Jon Saltinstall, Senior HealthCare Banking Consultant, Lloyds Bank