I was with a multinational company for a very long time being the senior technical leader for one of its subsidiaries. I have dealt with the problem you describe on behalf of the company in a large number of occasions.
From my experience, all IP developed by you belongs to the company.
My involvement normally was to assess that the technology the employee wanted to develop on his own was not in anyway linked to any technology the company was involved with or had interest in. If this was the case, then the employee will be allowed to develop it on his own. Under the legal department advice, the employee will write a letter stating that after having conversed with legal and the pertinent technical authority on such and such date, and determined that there was no conflict, he/she would proceed with his development and/or IPR pursue.
Yet, the company never gave any written consent to the employee.
So the solution in our case was kind of "grey" yetI do not recall a case where this was put to a reality test.