With the world of work in a state of flux, a pilot programme is about to be launched by the 4 day week campaign. How viable is a four-day week and what are the employment law challenges?
The pandemic has shaken up the world of work leading to a range of new working patterns, locations and trends. However, post-covid, there remains little consensus as to the direction of travel, and ultimate landing point, of the future workplace.
The 4 day week campaign
One proposed new working model that bridges the demand for more leisure time while still accommodating some elements of the traditional working schedule is the four-day working week.
The 4 day week campaign is based on the principle that it is possible to achieve greater, or at least equivalent, productivity within shorter working hours. The campaign proposes an across-the-board reduction in working hours to 32 hours per week, with no reduction in pay.
Central to the campaign is the belief that pay should not be reduced because overall productivity will not be negatively impacted by working fewer hours. The campaign is about to launch a six-month, four-day week trial in which over 60 employers will participate, temporarily changing working hours for staff. Participants are from a range of different industries including marketing, recruitment, finance and education. The pilot scheme began on 1 June 2022, following four months of preparation.
Benefits and challenges
The potential benefits for employees of a four-day week are clear, with improved work-life balance, leading to better mental health and more time to spend with family and friends or to pursue hobbies. However, for employers the stakes are higher, with the risk of lower output and higher running costs.
Careful consideration of whether the model is suited to your business is critical. Smaller and more agile businesses may face fewer challenges; while large, client-facing corporates may find it more difficult to implement a shorter working week. (See Sinead Casey’s blog Could a four-day working week become the new norm for UK employees? for a discussion of the issues employers should consider to determine whether the model is right for their business.)
What are the employment law issues?
In addition, there are a number of employment law considerations for employers to address:
Changes to contracts: Contractual changes are unnecessary and inadvisable for a trial shift to a 4-day week. However, if a four-day week is to be adopted permanently, new contracts or contractual amendment letters, signed and accepted by employees, would be required.
Holiday entitlement: Holiday allowances should be reduced in proportion to the overall reduction in weekly working hours. Changes to entitlement (which will be most apparent for part-time employees whose entitlement is likely to be expressed in hours or days) should be comfortably offset by the additional leisure time from which employees will benefit. However, employers will need to consider what approach to take to bank holidays (particularly if Monday is selected as the non-working day), ensuring that employees are still afforded the minimum requirement of 5.6 weeks’ leave per year.
Part-time employees: Perhaps the thorniest area to address is what the shift to a four-day working week means for part-time employees, in particular, those who already work four days. It is critical that employers ensure that the treatment of such employees is no less favourable than that of full-time employees. That means not simply carrying across part-time arrangements on their current terms but applying an appropriate adjustment in hours or pay to ensure that part-time staff receive the same proportionate level of benefit as full-time employees. There are two main options open to employers:
- to increase the pay of part-time employees to reflect a 20% increase in daily rate; or
- to offer part-time employees a pro-rata reduction in hours in line with the 20% reduction for full-time staff.
Bonus: While salary will remain unchanged, employers should consider whether the operation of the bonus system might result in changes to bonus awards.
Benefits: It is unlikely that a reduction in working hours would give rise to a case for a proportionate reduction in any benefit entitlement. However, it may be worth reviewing benefits and other perks and considering whether there is a case for pro-rating entitlement.
Core working hours: One potential risk area is that a shorter working week gives rise to longer working days. Standard daily contractual working hours will be set out in the contract and should not be altered. However, it may be helpful to set clear expectations as to the length of the working day to ensure that the benefit of the additional day of leisure is not offset by an extended working day.
Overtime: It is also worth considering whether the way in which overtime is offered and administered should be revised as a result of the shorter working week. If overtime becomes available after a certain number of working hours per week, employers should review the threshold. A more general question may arise as to how overtime fits into the ethos of a four-day working week.
Hybrid working policy: Many hybrid working policies are expressed as percentage of time to be spent at home versus time spent in the office. Employers should consider how this translates when applied to a four-day working week. Do adjustments need to be made to ensure that adequate time is spent with face-to-face contact?
Countering stress and burnout
The four-day working week assumes that employees will be happy to receive an additional day of leisure time. But what about employees who are simply unable to get their work done in a four-day week? Some employees will feel that the reduction in hours simply makes their role and their objectives unachievable and places them under additional pressure to work more intensely during their working days. Any benefit to an additional day of leisure may be perceived as insufficient to compensate for the stress of trying to shoehorn their work into a shorter working week.
This issue is central to the success of the project. Before embarking on the project, employers should think about whether changes are required to:
- working practices and company culture, such as adopting new policies on holding shorter, fewer or more tightly-managed meetings;
- job descriptions, targets and objectives, to ensure that these are sufficiently focussed and accurately reflect the work that needs to be performed.
The experience of the Wellcome Trust (who scrapped plans to move to a four-day week having decided it was operationally too complex) is a cautionary tale about undertaking detailed assessments as to the viability of reducing working days at both organisational and individual levels.
For those employers who are tempted, but not yet ready to take the plunge, the 4-day week pilot scheme will be worth watching closely. However, the key question will be whether the new working pattern is right for your business or whether your business’s future workplace will take an alternative form.
For further information, please contact:
Louise Mason, Linklaters
louise.mason@linklaters.com
