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Flexible working conditions becoming more of a reality

22 October 2014


As the typical 9-5 working day becomes increasingly dated in modern times, many employers have found they need to adopt a more fluid approach to managing how their employees work.

Virgin Group founder Billionaire Richard Branson has been praised for “leading the way for generation Y” after giving his salaried employees unlimited, untracked vacation time. While alarm bells of unreasonableness and inevitable abuse of this scheme sound immediately in one’s head, Branson’s plan may be a stroke of genius which could be directly transferrable to conditions in New Zealand.

In his book ‘The Virgin Way’, Branson has written, “Flexible working has revolutionised how, where and when we all do our jobs. So if working nine to five no longer applies, then why should strict annual leave policies?” The new “non-policy” is premised on the assumption that employees will only take leave when they are one hundred percent comfortable that their absence will not damage the business, the team or their careers.

Despite its undeniable novelty, Branson is not the first to roll out such a scheme. Having done his homework, Branson says companies who have experimented with such policies have “apparently experienced a marked upward spike in everything – morale, creativity, and productivity have all gone through the roof”. 

Whilst readers would expect increased productivity to be the primary benefit of the scheme, the real genius lies elsewhere. MIT Professor Lotte Bailyn says that employees are likely to take less time off because they are not sure whether the scheme is really a commitment to them or more of a PR stunt.

According to Bailyn a measurable change in leave taken is unlikely to result, as without any guidelines or structures people don’t know what to do and fall back on expectations formed in previous terms. 

How would this work in NZ?

This scheme will only apply to Virgin’s main offices in New York, London, Geneva, and Sydney, but could be adopted by employers in New Zealand. If employers are of the mind to roll out something similar, here is what must be considered:

Holidays Act 2003

  • Section 16 of this act stipulates that employees must take a minimum of 4 weeks annual leave
  • An employer cannot contract out of this or pay cash for this leave (an employee can request one weeks leave to be paid in cash though)
  • If employees take less they will not lose their entitlement i.e. if they only take 1 week annual leave over 4 years, they are still entitled to 15 weeks annual leave

Employment Relations (Amendment) Bill

The changes under this Bill are likely to pass later this year and in themselves move New Zealand closer to modern conceptions of flexibility. 

  • The right to request flexible working arrangements will be extended to all employees at the start of their employment rather than just to those with caring responsibilities
  • The limit of one application for flexible working arrangements per 12 months will be removed
  • The period of time that an employer has to consider requests for flexible working arrangements will be reduced from 3 months to 1 month
  • Although the amended Act will allow employees to negotiate a break time that works for both parties, where agreement cannot be reached, employers, having regard to the employees’ interests, will be able to determine reasonable times and durations according to the needs of the business.

Practicalities

Employers who are considering implementing such a policy also need to be mindful of the practical realities they face. For example, Branson has not extended the offer to any of Virgin’s flight or cabin crew. The policy would likely be harmful to the success of the company if it was extended too widely, such as to lower-level employees who are more likely to abuse the privilege or to scenarios where fixed rosters are essential to the operation of the company. 

It is undeniable that working arrangements are generally becoming increasingly flexible and Richard Branson’s example is just one novel approach that an employer has used to address this challenge. Undoubtedly it provides food for thought and should encourage readers to think about what changes they might be able to make. Despite the initially apparent insanity of this scheme, let’s not forget that insanity itself is doing the same thing over and over again and expecting different results.

Cullen - The Employment Law Firm is one of only eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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