In 1956, then US Vice President Richard Nixon promised Americans that they would only have to work four days a week “in the not too distant future”. Is this prospect any closer in 2023, and could this option work for your business?
Earlier this year the results were published of a six-month trial involving around 2,900 workers who had moved to a four-day working week. The organisers of the UK trial, the non-profit organisation 4 Day Week Global heralded it as a success for both employers and employees.
The trial was organised by campaigners and researchers, who offer consulting to companies who wish to implement a four-day working week. The experiment was based on the 100-80-100 model; workers receive 100% pay for working 80% of their previous hours and commit to maintaining 100% productivity. This is in contrast with the concept of compressed hours where employees work their usual full-time hours but compressed over four days.
There were 61 organisations which volunteered to take part and while some organisations closed one day a week, participating employers adopted different models. Organisations that needed to maintain five-day coverage used staggered days off, or employees ‘buddied up’ with a colleague with similar skills and covered each other’s day off.
Businesses with strong seasonal demand opted for annualised hours. Others adopted a ‘decentralised’ approach, allowing each department to work out the best model for its needs. Others made continuation of the scheme for specific divisions of the business conditional on that division meeting its key performance indicators (KPIs).
After the trial ended, 92% of the organisations continued with the arrangement, many to assess its impact over a longer period. By publication of the report, 18 had adopted it permanently. This outcome however needs to be considered in the context that the participating organisations were self-selecting volunteers who received support to implement the change in their business.
The report on the trial noted an improvement in employee wellbeing with 39% of employees saying that they felt less stressed at the end of the trial and 71% reporting reduced levels of burn-out. They also reported significant decreases in employees leaving and absence rates.
Only 23 of the participating organisations provided data on changes to revenue, reporting an average 1.4% increase in productivity over the six-month trial period.
Four day working in the public sector
Some local authorities have recently introduced four day working for administrative staff, refuse collection operatives and others, viewing this option as a solution for acute recruitment and retention difficulties and in the process reducing their reliance on agency staff.
However this has met with a backlash from some MPs and others. Last month the Local Government Minister wrote to South Cambridgeshire District Council, which was the first local authority to trial four day working, requiring the Council to end its experiment out of concerns that the four-day model was unlikely to demonstrate value for money for its taxpayers and residents. The Council however intends to press ahead with its trial, asserting its right to determine its own employment policies. It maintains that the four-day week has improved recruitment and retention, reduced agency staff costs, and delivered performance improvement in a range of areas. Cambridge City Council has more recently approved a four-day working week trial for its waste collection service.
International trends towards four day working
This trial by UK businesses forms part of a global campaign towards the adoption of four day working as a cultural norm, which is increasingly gaining traction in Europe and worldwide. For example, in 2019 Microsoft Japan conducted a trial four-day working week with a particular focus on reducing time spent by employees in attending meetings. In 2021 the Japanese government recommended that companies allow their staff to opt for a four-day work week, as part of an initiative aimed at improving work-life balance.
The Portuguese Government has funded a similar pilot scheme to the UK trial, also based on the 100-80-100 model and involving 39 companies. Belgium has gone further with the introduction in 2022 of a legal entitlement for employees to request a four-day work week, through the compression of their 38 hours, with the stated goals of giving people and companies more freedom to arrange their work time and improving work-life balance.
What are the downsides of four day working?
This may not be a realistic option for many businesses, for example it may not be affordable to recruit more staff or pay more overtime, which increases the wage bill to facilitate the time off. Businesses which need to ensure continual cover to meet customer requirements may have particular difficulty, particularly once absences due to annual leave and sickness are taken into account. Managing working hours and sufficient cover, as well as monitoring performance or other KPIs, is likely to use up management time and create administrative challenges. The impact of four day working on performance and quality of delivery to clients may also be uncertain. For example, the recent UK trial did not consider customer satisfaction.
These arrangements may not achieve one of the desired outcomes of improved employee wellbeing, in fact they could have the opposite effect for some people. Although the principle is that employees will work more efficiently, for instance by jettisoning unnecessary meetings, those with intense workloads may struggle to get everything done in reduced hours.
Some employers may find that the four-day week works in some parts of the organisation but not others. This presents a difficult decision in weighing up the benefits in some parts of the business against the likely overall damage to morale and cohesion among the workforce.
There are a number of legal issues to consider when introducing the four-day week, whether as a trial or permanently.
Contracts of employment will need to allow for the new working arrangements. Flexibility clauses may allow the employer to make the changes, but these still need to be brought about in a reasonable way. If there is no flexibility in the contract, employers need to agree changes to working hours and patterns with the employees, whether on a temporary basis or as permanent changes. Some employers may need to introduce a requirement for employees to work shifts or work overtime to provide cover for colleagues. Employers need to factor in the time and resources to consult with staff to seek their agreement. Changing working hours and patterns could affect childcare arrangements or arrangements staff have in place to help accommodate a disability. Care needs to be taken when introducing changes to address individual circumstances. Failure to do so could be discriminatory.
Employers looking to run a trial should make it clear to employees that this is just a temporary measure. They will need to ensure that the contractual changes give them the option to change back to the previous working hours at the end of the trial.
Part-time workers are protected from less favourable treatment compared to full-time employees. To ensure that they are fairly treated, options are available such as reducing their hours pro rata or increasing their pay. Otherwise you could risk an employment tribunal claim.
Faced with the cost-of-living crisis, some employees may use their day off to take on a second job. This could lead to fatigue, particularly if the pace of their main job has increased since the four day-week was introduced, which could potentially reduce the individual’s productivity. In some settings, such as healthcare and construction, tiredness can present a danger to the health and safety of the worker and others. When checking for compliance with the rules on working time and rest breaks, employers must take into account work done with other employers.
We can check if your contracts address this situation and discuss how to introduce provisions to, at the very least, require employees to tell you about a second job. For some roles, the contract should address conflicts of interest and confidentiality issues that could arise.
Employers may wish to reduce the total number of days annual holiday allowance to reflect the reduced number of working days. This contractual change would need to be agreed as part of the package of changes. Where employees work different days of the week, such as on a staggered arrangement, we can work through with you how to take account of public holidays.
How we can help
If you are considering piloting a four-day week or restructuring your working arrangements, we can help you to evaluate the different options for your business.
Once you have selected a model, we can help you to work through the implications of the new arrangements and a trial to ensure fairness for all staff, providing clarity and a smooth transition, as well as giving you the option to reverse the decision.
Contact Senior Associate, Patrick Glencross, in Furley Page employment team for further information on 01227 763939 or email email@example.com
Please note: This article is for general information only and does not constitute legal or professional advice.