While the results of the four-day working week UK pilot won’t be announced until next month (February), we’ve summarised what we know so far and considered the potential legal considerations for UK organisations if they decide to adopt a four-day working week.
From June to December 2022, more than 70 businesses around the UK, trialled a four-day working week with no loss in pay for the 3,300 employees taking part. The highly anticipated six-month pilot sought to shed some light on the impact a permanent three-day weekend could have on wellbeing, productivity, the environment and gender equality. While there were many sceptics, at the half-way point, 88% of the businesses involved in the trial stated it was working well, and nine in ten organisations said they would keep the new hours.
The pilot was part of a bigger global trial with countries such as New Zealand, Japan, Belgium and Iceland already successfully trialling the four-day working week. The findings were resoundingly positive. In Iceland over 1% of the working population took part in the trial which had a positive impact on workers’ health, wellbeing and work-life balance, and Belgium have introduced the right for workers to choose if they would like to work a full week in four days without a loss of salary.
Is a four-day working week the future?
A 2021 survey by recruitment company Reed found that more than 80% of people in the UK would prefer a four-day working week.
The advantages have been listed as increasing morale across the workforce, an increase in productivity and fewer employee absences. If staff are happier, they are more likely to become more focused in their roles and are less likely to suffer from burnout.
Additionally, a shorter working week is likely to aid recruitment – especially at a time when recruitment is reportedly likely to be one of the biggest challenges for HR professionals in 2023. A study we conducted in collaboration with our sister company, WorkNest, revealed that 55% of HR professionals said that recruitment would be a significant challenge for their organisation in 2023. An organisation offering four days’ work for five days’ pay will create a big draw for employees, potentially attracting a wider pool of talent and helping to retain talented professionals.
Despite the four-day working week being highly thought of, it does come with its pitfalls. Not all workers will want to work four days a week, for example, they may want the opportunity of working overtime or like the structure a five-day working week brings. Also, not all industries can facilitate a four-day working week as some professions require a 24/7 presence, which would make a shorter working week impractical.
What are the implementation considerations?
Organisations should consider the full impact of the decision before deciding if it is viable and worthwhile. HR teams should look at the organisation’s current contracts and benefits packages and consult with a legal adviser on which elements will need consideration before making any announcements or proposals.
Once this has been established, then discussion with full and part-time employees can follow to gauge their views. Discussing the possibility with employees too early carries the risk of them incorrectly assuming that it will definitely happen, rather than something that is just being considered, resulting in disappointed, disgruntled employees if it is not implemented.
Be prepared for questions
Understandably employees will have questions about how a four-day working week will work in practice, so full consideration of all factors should be given before implementing a trial or permanent change in an employee’s working hours. Some considerations:
- Are employees expected to condense their full-time hours over four working days, therefore working four longer days in return for a day off? If so, how is this going to affect those with certain protected characteristics, for example, those with disabilities or childcare responsibilities?
- If employees are able to work less hours over four days but receive the same pay as if they were working five days, how does this impact part-time workers?
- How is work going to be distributed?
- What is the impact going to be on the organisation’s productivity and finances?
Salaries and benefits
As well as helping with employee retention, a shorter working week can also make salaries (pro-rata) significantly more competitive than rival businesses, where working four days per week would result in a pay reduction. Offering a four-day working week would come at minimal cost to the employer as the salary rates are maintained, but employees pro-rata obtain more money for fewer hours, potentially improving mental wellbeing, reducing sickness absence and helping keep employees motivated and positive whilst at work.
On the downside, it may cause additional stress and pressure on workers to get the same amount of work done with shorter working hours. Or if an organisation opts to condense hours, trying to cram five days’ work into four, it may lead to issues surrounding childcare or other personal commitments and could lead to burnout, mental health issues – such as stress and anxiety – and poor employee retention.
A shorter working week may sound good in principle but when employees try it, they may find it harder to cope.
Change to terms of contract of employment
Once employees have been consulted and agree to a variation of their working hours, the change should be recorded in writing. If the change is for a trial period only, this should be made explicitly clear, stating when the trial begins and when it ends.
Holiday entitlement
How an organisation deals with holiday pay will largely depend on how they plan to implement the four-day working week. If employee’s hours are condensed from five days to four, so the same amount of hours worked, then the holiday entitlement should remain the same. However, if the employee works less hours, so a reduction of 20% of working time, then it is likely that organisations will want to amend the holiday allowances accordingly.
Any change to how holiday pay entitlement or how holiday pay is calculated will need to be agreed with employees. The effect on holiday pay should be considered and be included as part of the consultation with employees when proposing the four-day working week, so that employees are fully aware of the terms.
If an employee refuses the change, it is always best to seek specific advice from an employment lawyer.
Impact on part-time workers
If organisations introduce a four-day working week to employees without a reduction in pay, issues will likely be raised with part-time employees who are currently receiving 80% pay.
In terms of part-time workers, there may be an increased cost to the organisation. If an employee currently works three days per week, they receive 3/5 of the salary of a full-time worker working 5 days per week. If the organisation moves to a four-day week model, without a reduction in pay, the part-time worker’s salary would now need to be ¾ of the full-time person’s salary. Part-time workers would all receive a pay-rise therefore, or else there would be a risk of claims for less favourable treatment of part-time workers, and/or indirect discrimination claims.
If an organisation has a lot of part-time workers, this could be a significant additional cost in terms of wages.
When considering part time workers, the options are:
Reducing part-time workers working time by a proportionate amount to retain existing pay;
- Increase the pay of part-time employees to 100% of full-time salary to match the full-time employees who will now be working four days; or
- Adjusting the annual leave entitlement to recognise the large uplift created by a four-day working week.
Before deciding which option to take, the organisation will need to decide if it plans on condensing a five-day working week into four, or if working hours will be reduced.
It is important to ensure that part-time workers are not treated less favourably than full time workers unless it can be objectively justified.
What if an organisation is unable to adopt a four-day working week?
Due to the impact of the impending recession and the rising cost of living, it may not be feasible for some organisations to put the four-day working week in to practice but there are other options which could be considered.
Organisations could possibly consider more flexible working, which could include:
- Implementing a four-day week every fortnight (so, a nine-day fortnight as opposed to eight),
- Flexitime where an employee chooses when to start and end work (within agreed limits),
- Working from home,
- Annualised hours.
There are limitless alternatives to keeping employees engaged if a four-day working week is not possible for an organisation, however any changes will need to be consulted upon and agreed by employees – they cannot be imposed unilaterally.
Organisations are encouraged to work through the options and costs before implementing any changes, as once implemented they may struggle to make any amendments.
