The four-day week – will requests be on the rise for Employers?

The six-month pilot scheme of a four-day week on full pay has now concluded and the results are overwhelmingly positive: 56 of the 61 companies which took part in the trial which ran between June and December 2022 will continue the arrangement for employees and 18 companies have made the change to a four-day week permanent.

Although designed around a four-day week, in recognition of the different needs of organisations depending on their size and industry etc, organisations taking part in the trial were not required to rigidly deploy a particular type of working reduction or four-day week model.  The key requirement was that employees’ pay was maintained at 100% and they had a “meaningful” reduction in work time (i.e. it was up to them how they structured their four-day week).   

It is not surprising that this scheme has proven popular, with most employees being keen to enjoy the benefits of a three-day weekend, improved wellbeing and work-life balance. The results of the pilot indicate that employees reported feeling happier and healthier and that their productivity either increased or remained at the same level.

Will a four-day week become the new norm?

There is currently a Bill proposed by Labour MP Peter Dowd making its way through the House of Commons.  The Bill, if it becomes law, will amend the Working Time Regulations 1998 by reducing the maximum working week from 48 to 32 hours, with any time worked above that being paid at 1.5 times the employee’s hourly pay. Although the provision for compulsory overtime pay seems unlikely to be implemented, it will be interesting to see whether the proposed reduction in the maximum working week will progress given the results of the trial and the developing mood music around the concept of a four-day week.

With stable, or even increased, productivity there are certainly potential benefits to introducing this concept from an employer’s perspective. Four-day weeks may help with employee recruitment with a positive reputational impact in the market as employees seek greater flexibility to improve work-life balance following the COVID-19 pandemic. Similarly, retention may improve if staff are more engaged and energised. The trial found that the number of employees leaving the companies participating in the trial dropped by 57%.

The increased balance of work-life responsibilities during the trial saw the time male participants spent looking after children increasing by more than double that of participating women, highlighting the positive impacts a four-day week may have on gender equality.

Despite this, it is clear that the four-day week may not be feasible in some sectors, for example the NHS where around the clock care is required. Likewise, it is unclear if all client facing roles in financial and professional services firms can be adapted to a four-day week whilst maintaining service levels and meeting the expectations of clients.  Advocates suggest job-sharing or alternative four-day week structures could facilitate this.

There may also be concern for employers as to what aspects of the running of the business will need to be cut in order to facilitate a four-day week.  For example, the number or time spent at internal meetings, catch-ups or brainstorming sessions. Managing client and customer expectations will be important. Others query whether the four-day week will happen in practice and whether employees will be required to be available to work on the fifth day and work may spill over. There is also the risk that employees who try to fit five days’ work into four may experience increased stress and potentially burn-out resulting in diminishing returns. However, that does not seem to have happened in this trial as the findings state that 71% of employees had reduced levels of burnout and 39% were less stressed.

Finally, employers wishing to implement the four-day week will need to tread carefully in relation to the calculation of holiday pay and part-time workers. Employers may need to revise holiday pay policies as reduced working hours may impact employees’ holiday entitlement. Employers may struggle to differentiate between employees on a four-day week receiving full pay on the expectation of 100% productivity and existing part-time workers who work a four-day week for 20% less pay. There may also be a risk of potential discrimination claims if existing part-time workers are not offered an opportunity to take part in a new four-day week scheme implemented by the business, particularly given the fact that most of those already working part-time tend to be women with children or those with disabilities.

Regardless of whether there is a change in law on the maximum working week, we expect there to be an increase in flexible working requests by employees who wish to have a four-day week and feel emboldened by the findings of this trial.  Employers will need to consider such requests carefully in accordance with the relevant flexible working rules and in light of the impact such an arrangement may have on their business. Ultimately, consideration of a trial period (clearly indicating that it may not result in a permanent change) or a ‘get out clause’ in any agreed change to terms and conditions of employment to ensure employers can revert to a five-day week if needed, will be important.

This is an area of development for employment law and it will be interesting to see how far the four-day week campaign goes in changing employee attitudes and employers’ ways of working.

FURTHER INFORMATION

If you have any questions regarding the blog above, please contact our Employment team.