Time for change? The four-day working week

What’s meant by a “four-day working week”?

Take as an example, the notional full-time employee who traditionally works five eight-hour days a week. They would simply reduce their hours to work only four eight-hour days a week instead (totalling 32 hours), while still receiving their full-time, 40-hour week salary. The rationale is that employees working those hours will, so the hypothesis goes, give you the same level of output as an employee working a five-day week.

This shouldn’t be confused with compressed hours – where the usual 40-hour week is worked over four days.

Why now?

The idea isn’t new. Throughout the 20^th century, economists, psychologists, philosophers, politicians and other commentators debated a reduction in working hours. In fact, it was only at the beginning of the 20^th century that the UK waved goodbye to the six-day working week.

The pandemic was a catalyst for accelerated changes to the world of work, causing both employers and workers to reflect on what they value most. For many, removing the commute and spending more time with family and pursuing hobbies and interests resulted in a paradigm shift towards more flexible ways of working; remote, hybrid, flexible, part-time, and so on. The four-day working week is, perhaps, an obvious next step.

In the second half of 2022, a trial of the concept was organised by campaigning group ‘4 Day Week Global’. Of the 61 participating companies, 56 (92%) have decided to continue with their four-day working week for the time being, including 18 that have made the change permanent.

What’s in it for businesses and employees?

Supporters suggest a wide range of benefits, including:

• Improved staff health and wellbeing

• No loss in productivity – or even an increase in productivity

• Significantly improved staff retention rates

• Attracting the best talent

• Lower rates of sickness absence

• Promoting equality – as women and those with care responsibilities are more likely to remain in full-time employment

• Reducing the carbon footprint of the workforce and business

The results of the trial support a number of these. Participating companies were satisfied with productivity and business performance; sick days fell by about two-thirds; and 57% fewer staff left the companies taking part, compared with the same period a year earlier.

Checklist – what do you need to consider?

If your business is considering moving to a four-day working week, what practical and legal issues should you be thinking about?

The type of four-day working week you want to adopt

It’s easy to fall into the trap of thinking that a four-day working week simply means ‘Fridays off’. But that policy won’t suit every industry, departmental structures, company culture, and so on. Alternatives include:

• A ‘staggered’ model. Everyone works four days a week, but people take their new day off on different days each week, making sure the company’s still operative over the usual five working days.

• A ‘decentralised’ model. In larger organisations, it may be more appropriate to devolve the decision to department heads, who decide what works best for their team. But the company will have to make sure it’s able to justify differences, as departments seen to have more flexible policies are likely to create friction.

• An ‘annualised’ model. Staff work an average number of hours a week equivalent to four working days a week, annualised across the year. This is likely more appropriate for seasonal businesses with peaks and troughs in workload throughout the year.

The contractual position

Do your employment contracts allow for a change to a four-day working week? It’s tempting to think that everyone will be fine with the change. But it would be sensible to get express agreement and amend contracts; particularly where, as already noted, there are a number of ways to implement a four-day working week model and so opinions may differ. As discussed below, you may also wish to remove or reduce certain benefits to reflect the reduction in working hours; a broadly positive change to employment terms can still amount to a breach of contract.

Trial period

It seems sensible to trial the four-day working week to begin with, to check it works for the business and your workforce. To try to avoid an employee relations disaster should you decide to move back to a five-day model at the end of the trial period, set out clear, transparent, measurable and appropriate objectives you will need to meet to justify keeping the model. Care should be taken not to tie the business into making the four-day model a permanent fixture, even if the objectives are met.

Overtime

Employers will need to think about their overtime arrangements and how the shift to a four-day working week affects them; particularly to cover the risk of employees essentially just working their previous ‘fifth’ working day through overtime (which could be more costly) at the end of each working day on their new four-day pattern. Depending on your business model, if employees regularly receive overtime, the move to a four-day working week may not be appropriate.

Part-time employees

For staff who already work four days a week, would they now become full-time staff with the accompanying benefits, or would they reduce their hours further? What about other part-time staff? This is an area where employers will need to be particularly careful because of the obligation not to treat part-time workers less favourably.

Annual leave

Will entitlement be reduced to reflect the change? Will employees receive a day in lieu if a now normal day off falls on a bank holiday? Tight drafting will be crucial here.

Policies

Undertake a thorough policy review to identify any clash between policies/benefits and the change to a four-day week. For example, companies often commit to acting, providing a response or making a decision by reference to a number of weeks running from the date of receiving an expenses form, complaint, application, and so on.

How we can help

At Walker Morris we pride ourselves on being innovative and flexible whilst remaining commercially focussed. If you’re considering alternative working arrangements, our highly experienced Employment lawyers will be happy to discuss this with you. Please contact Lucy, Charlotte or Adam.