The pandemic has changed the working world and influenced working practices. This month, the UK’s largest four-day working week trial commenced, with more than 3,300 workers from 70 companies taking part. Unlike part-time working, where employees work less hours for reduced pay, the ‘4 Day Week Campaign’ will see employees work 80% of their usual hours for the same pay, with an expectation to maintain the same productivity and output levels that would be achieved over five days.
Whilst at first glance a four-day working week may seem like an attractive proposition, there a number of issues that employers will need to consider before implementing such a change.
It is important for employers to be clear as to what they mean by a four-day working week proposal, whether it be in the form of the ‘4 Day Week Campaign’, where employees work less hours for the same pay, a reduction in working hours with reduced pay or a compressed working week i.e. working the same full-time hours but over four longer days instead of five.
Another key consideration will be how a four-day week is implemented. One possible option would be for a business to reduce its operating days, only providing a service Monday to Thursday for example. In reality, however, this may prove problematic for businesses’ who currently provide a Monday to Friday service for customers/clients. A more workable option would be for the operating days to remain the same, with employees working different four-day schedules to ensure business continuity. Some businesses may need to recruit additional staff to ensure they have sufficient resource to maintain their service/output, which could be a barrier to introducing a four-day week as it would increase overheads and squeeze profit margins.
Contracts of employment
Reducing an employee’s hours of work or working days will amount to an amendment to the employee’s terms of conditions of employment and will therefore need to be agreed by the employee. Whilst consent can sometimes be difficult to obtain when amending an employee’s contract, reducing working hours without a reduction in salary should not present a problem as this will more than likely be agreed by the employee. Nevertheless, consent will still need to be obtained.
Annual leave entitlement
Employees who work five days a week are legally entitled to 28 days holiday per year (inclusive of bank holidays). This is prorated for part-time employees, so an individual working four days a week would be entitled to a minimum of 22.4 days a year (inclusive of bank holidays). The ‘4 Day Week Campaign’ suggests reducing holiday entitlement in line with the reduction in working hours. Whilst employees may initially be disgruntled by this, a reduction to annual leave entitlement may be considered a reasonable compromise given the additional day off employees will receive each week.
In most cases, part-time employees work less hours for less pay. If full-time employees begin to work four days a week but continue to receive full pay, this is likely to cause an issue with part-time employees. The ‘4 Day Week Campaign’ proposes four options to address this:
- Increase the pay of part-time workers to adjust for hourly increases in pay arising from the reduction in working time;
- Reduce the hours of people working part-time (without a reduction in pay) in line with reductions of other employees;
- Adjust annual leave entitlement to recognise the large uplift created by a four-day working week; or
- A combination of the above.
A four-day week would undoubtedly be a positive step towards flexible working and improved employee wellbeing. There are many advantages that an employer seeks to gain from such a change, including increased productivity, the ability to attract and retain talent and a reduced carbon footprint.
Ultimately, employers must consider what is right for their business. Each business will have different operative needs and implementing a four-day working week could be challenging. Trialling a four-day week on a temporary basis may be a sensible option to help employers assess whether such an approach is suitable and how it could be implemented.
For more information, please contact a member of the Employment Team.