I won't copy paste the terms, but they say any employee can do what they like, as long as it doesn't utilise the resources of the business (which are defined as equipment, offices, money, time etc.).

And if it does, then the business operates a 'first-refusal' policy. In cases where the business has decided to utilise the side-project, this is normally combined with financial compensation in some form (a salary raise, a bonus, something like that).

FYI, I'm in the UK (midlands). I think this is quite a liberal approach compared to most. But it seems to motivate staff to think outside the box in the interests of the business.