Four-Day Working Week | Benefits for an employer

When 61 companies in the UK entered the four-day working week trial for six months, the outcome was unclear. But recent research shows that the movement to shorten the working week is gaining support from both employees and employers. 

Of the 61 that initially entered the trial period, 56 employers have decided to extend the four day week policy and 18 of those have already made it a permanent part of their company culture. 

It was expected that the change would suit and be liked by employees but, does a four-day week have any benefits for the employers too?

• Workplace equality – a four-day week allows those with dependents and other responsibilities more time to manage them around their work life.
• Social impact – it allows employees the opportunity to spend their additional day off doing good for their local community be that volunteering or other charitable/social pursuits.
• Environmental and costs benefits – less commuting and not having to run an office for an additional day helps employers and employees to reduce their carbon footprint, in turn saving money.
• Retention of employees – following Covid, many employees began to consider a good work life balance as being more important that the financial incentives a job might offer.

What are the practical and legal aspects of a four-day working week?

Is it realistic?

A shortened working week will simply not fit every sector, every business, or every role within those businesses. But can employers expect the same productivity in four days instead of five? 

The trial concluded that 95% of companies that participated saw productivity stay the same or even improved. But this cannot be expected of businesses that charge for services rather than a product, for example a nail technician, or where productivity is outside of the businesses control, for example some retail roles. 

It may be that for your business as an employer you decide that improving efficiency would be a better option instead of making five days work fit into four.

Do I need consent?

Moving to a four-day week requires consent from your employees due to it being a change to the terms of their contracts. If you’re moving from a five-day week to a four-day week but leaving your employees on the same pay, then getting consent from your employees is likely to be reasonably easy. 

However, employers should consider whether the change is on a trial basis and thus how the situation will work when the change is revoked.

Impacts on other employee terms

There will be many parts of the employment contract that you will have to consider, such as whether their annual holiday allowance will be prorated in line with their new working hours. Other policies such as overtime and time off in lieu will need looking into and possibly altering. 

Employers will also need to consider whether or not the changes are allowed under flexibility clauses in employee contracts.

Equalities

Employers may need to audit their workforce to check whether a four-day week would have a negative impact on workers with ‘protected characteristics’ under the Equality Act 2010. 

For example, if you are swapping five standard days to 4 longer working hours days, this may cause some staff problems with childcare or cause difficulties for employees with certain disabilities.

Expectations of the non-working day

Clear communication of the expectations of employees is key in the transition from a five-day to a four-day week. If as an employer you have expectations about what your employee does with their day off, for example if they are able to work another paying job etc. These all need to be reflected in your policies and in the exclusivity and conflict of interest clauses in your employment contracts.

Part time contracts

One concern that is being raised is if full time workers move down to four days but still get paid the same, what happens to part time workers who already work four days or less? Part time workers have statutory protection against discrimination due to their contract type so the logical solution is to either decrease their hours for the same pay or increase pay for the same hours. These cases need to be dealt with carefully as it can open up employers to discrimination claims especially considering a majority of part time workers in the UK are women. 

Employees that shift to part time hours will trigger the same statutory protections under the Part Time Workers Regulations 2000, so this must be kept in mind so as to not bring any claims of unfairness against yourself and your business.

What if changing to a four-day working week cannot be made under employee contracts and an agreement cannot be reached?

One way of breaking the deadlock is to dismiss and then reengage an employee, also known as fire and rehire. This involves ending the contract of employment with an employee, and then immediately offering them the same job but with changes to the contract terms e.g. now four days rather than five in their working week. 

The government recently published a draft Code of Practice on dismissal and re-engagement which states that fire and rehire tactics can only be used if they have a strong business case behind them to justify the process for one or more of your employees.

Is there likely to be a legal change in the UK?

In short, it’s unlikely to be enforced in the UK anytime soon despite it recently being made an employee’s legal right to request a four-day week in Belgium. 

Labour’s recent bill proposed that there be a reduction in the working week from 40 hours to 32 hours. However, this is not supported by the current conservative government with one MP saying that the proposal was like a “hand grenade being thrown into the economy”. 

Support generally for a four-day working week is growing steadily and is something that employees are now starting to look for in their jobs. Employers are having to find creative ways to maintain staff retention as well as attracted new talent to their companies and it could be that in the future offering a four-day week is the way to achieve this.

How can Hegarty Solicitors help?

If you have any questions or concerns, or if you need your employment contract reviewed following any changes you may be thinking of making, please contact Katie Bowen Nicholas.