Unlimited annual leave – a backpacker in a chocolate shop?

It’s Safe Work Month and I’m proud to be part of the generation which recognised the importance of safety at work to both employer and employee alike.  It’s initiatives like this that remind us that it’s people who make businesses successful – business owners, employees, customers and others – all of whom will view a business’ safety record and culture as important in making up their own minds about a business.

I’ve recently been intrigued by the movement by high profile companies such as Virgin and Netflix toward allowing employees unlimited annual leave and how this might impact on health and safety in the workplace.  Although the number of companies with such policies (or “non-policies” as Sir Richard Branson puts it) is small, this represents a fundamental shift in thinking by these companies who recognise that, through the increasing use of technology, there seems to be few limits on the actual (albeit unofficial) hours worked by employees who are electronically connected to the workplace (this topic was discussed by my colleague Christina Willcox in her blog “Connectivity – an emerging WH&S Risk”), sometimes on a 24/7 basis.  By responding with unlimited annual leave, employers are effectively compensating employees for all of that additional unpaid work they do as a result of that increased connectivity.

These schemes seem to work on something akin to an honour system where employees take the time off when they need to, provided they feel that the company or their colleagues won’t suffer because of unfinished work or unmet deadlines as a result.  At Virgin, there is no need to account for the time off or to pre-arrange it.  The scheme appears to rely upon social norms and pressures and employee-held notions of fairness as the only constraint on the amount of time taken.

This reminds me very much of my time as a backpacker in London when I worked in a handmade Swiss chocolate shop.  I was told at the outset that I could eat as much as I liked.  Needless to say, I got stuck straight in and, I must say, was pretty popular with my 6 Australian flatmates who very much enjoyed their break from 2 minute noodles to enjoy the sweet delights I brought home.  Of course, it wasn’t very long before I could think of nothing worse than eating chocolate and to this day I’m still not that keen on the stuff!  But I digress…

On the face of it, unlimited annual leave is surely a great way to provide for a safer and healthier workplace.  That is, employees are likely to feel more able to take time off when stressed or fatigued which should, in theory at least, decrease the chances of workplace injuries (both physical and psychological).  Whilst some companies with unlimited annual leave (such as Netflix) have reported higher morale and greater productivity as a result, it would be interesting to measure the impact of unlimited annual leave on workplace health and safety.

On the flipside, though, there is always the situation where a disgruntled employee or simply someone with little regard for social norms or notions of fairness will take advantage and this is the very situation which will lead to some employees being left to deal with an increased workload as a result.  Again, it’s not hard to see how that would have a detrimental impact on the health and safety of those workers.

And then there’s the increased stress and anxiety management and those trying to maintain employee records would experience!

Perhaps there is less chance of the system being abused in companies such as Virgin and Netflix which are very selective in their recruitment practices and so are able to determine at the outset whether someone would be likely to abuse such as system?  Perhaps it is that larger organisations like these can absorb the impact of rogue employees who abuse the system?

Whatever the answer, it’s unlikely that a widespread adoption of “non-policies” like this will occur, particularly in smaller businesses which simply couldn’t bear the costs or administrative burden of having employees not show up for work (and still expect to get paid!), let alone the Fair Work record-keeping compliance issues this raises!  However, it’s certainly an interesting social experiment and I, for one, would be very keen to see any data on the impact which this has on health and safety in the workplace.

At HR Business Direction we can assist with employee entitlements that fit your business and culture.  Contact us here.

Melissa Fitzpatrick LLB (Hons); B.Int.Bus; IRSQ
Industrial & Employment Relations Specialist
melissa.fitzpatrick@hrbd.com.au
07 3890 2066
www.hrbd.com.au