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03rd October 2014

Unlimited Holiday – is it Sensible?

Unlimited holiday – is it sensibleBackground

It is a far cry from the 1960s when “Time and motion” was very much the order of the day. All activity was carefully timed and “rates” included a ”relaxation allowance” of 3% for men and 5% for women. That ran into the sand in 1975 when the Sex Discrimination Act determined that the allowance for men had equal to that of women. That extra 2% allowance may not sound very much but in tightly controlled repetitive processes it was seen as eroding the margin.

As for holiday, well there was no legal entitlement.

Only in 1998 when the Working Time Regulations were introduced was there a statutory entitlement to holiday and to legally required working time breaks.

That statutory right was to 4 weeks of paid holidays. The right that was increased in 2009 to allow for a minimum of 5.6 weeks holiday.

In legal terms holiday leave has proved problematic ever since, partly because the 4 weeks originates from European legislation (and therefore is subject to decisions made in European Courts) whereas the additional 1.6 weeks originates from UK legislation. Employers can add additional holiday in the contract if they wish and, often, this is service dependent. Holiday issues give rise to more queries than any other single aspect of employment legislation.

Now Sir Richard Branson has hit the headlines for offering “unlimited holiday” to his employees. At least that might reduce the number of queries about holidays that his HR department receives.

But there is a caveat: "The assumption being that they are only going to do it when they feel 100% comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business - or, for that matter, their careers!" When were you last 100% comfortable that you were up-to-date with your work? Virgin employees may also find it difficult to take a “gap year” without damaging their careers.

Benefits of holidays and breaks

Nevertheless the evidence is mounting that holidays and break boost productivity. The Germans (who pre-empted us on statutory holidays) take longer holidays than the Americans (where even taking a two week break could damage your career). Yet no-one would claim the former are less productive.

When Edward Heath introduced the three day week in the 1970’s industrial production remained much the same. Perhaps the change should have been made permanent?

A recent survey claims the top 10 per cent of productive employees work an average 52 minutes before taking a 17-minute break.

There are some valuable actions to consider.

  • Encourage holidays. This is often as much a factor of your own attitude towards them, whether you believe in their benefits, and perhaps whether you remind employees in good time before the holiday year end.
  • Make taking holiday contractual. It sounds drastic, but interesting things are sometimes discovered when employees are on holiday.
  • Don’t allow “roll-over” of untaken holidays to the next holiday year. So far as statutory holidays are concerned this is not lawful, but it also discourages employees from taking their entitlement in good time and it can become an administrative nightmare.
  • Reinstate the lunch hour. The French take two hours!
  • Ensure breaks are scheduled in during the working day. It may not be essential to schedule them, so long as there is opportunity for them to happen.
  • Make your environment conducive to taking a break.
  • Take breaks yourself.

Sir Richard Branson , again: "We should focus on what people get done, not on how many hours or days worked”.

There must be something in this. But those of us of moderate ability find it difficult to get a good degree, start a business, or enhance our careers without putting the hours in. So on the one hand I think Branson is right, but, on the other, I wonder.

And, traditionally, almost all of us get paid by the hour.

Malcolm Martin of Employer Solutions – QCS HR Expert contributor.

Topics: Human Resources

Sarah Riley

Senior Customer Care Executive

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