A couple of weeks ago, my company, Inventium, announced to staff that they would now have unlimited, uncapped, paid, annual leave.
I made this decision because of the unfairness inherent in typical Australian employment contracts. In Australia, by law, people are entitled to four weeks paid annual leave, yet employment contracts state that a full-time employee works a 38-hour week. At Inventium (as with many workplaces), this is generally not the case. Working hours tend to be longer than 38 hours which, for us, is what happens when you have an incredibly dedicated team who truly care about what they do and the clients they look after.
This situation – the inequity between what workplaces in Australia are legally obliged to do and what happens in reality – really felt wrong. Annual leave was capped, yet working hours were not.
Top Comments
Good on her.
It's a good idea, but it has several problems.
According to one source 58% of workers do not take their full entitlement of annual leave, so giving extra is kind of useless for them.
Some people use banked annual leave as a buffer if they ever have to leave their job, so they'd get paid out all the unused portion. That disappears with unlimited leave.
There is a level of competition between employees in many places, so it might cause problems with people unofficially competing for who can take the most, or the least, amount of leave. Neither option is good.
One article by Bri Williams found that people took less leave, in part due to feeling guilty because they thought the leave was no longer 'theirs'.
And of course it comes down to money. When the company starts an unlimited annual leave policy they no longer have to set an amount of money aside to cover the current annual leave system.
We looked at unlimited leave for our company and our lawyer advised that we would still need to provide the regular four weeks annual leave, and then the unlimited leave would be added on top - his interpretation was that you can't take away the regular leave entitlements that are required by law in Australia, but you can add to them. I think that the studies you're referring to were for US businesses where the labour laws are different, and perhaps these same circumstances (ie removing the benefit of 'banked' leave, reducing the cash burden of annual leave on the company, taking less leave) wouldn't be allowed to occur under Australian laws? That's the advice I received.