The Employment team at DTM Legal have seen an increase in the number of employers considering the 4-day working week model for their businesses. The peak in interest for the 4-day working week comes after the positive results from the world’s largest pilot of the 4-day working week back in June 2022. Of the 60 companies who took part in the pilot, 92% are implementing 4-day working weeks permanently. So, what are the considerations for an employer when it comes to implementing a 4-day working week?
What is a 4-day Work Week?
There are a couple of different models of the 4-day working week:
- Model 1 – 5-day working week hours are reduced by 20% for the same level of pay, meaning a day off for employees.
- Model 2 – 5-day working week hours are compressed to fit within a 4-day structure, meaning longer days for employees but an additional day off.
The Benefits of a 4-day Week for Employers
The 4-day week has a number of great benefits for employers, including:
- Increased employee productivity,
- Improved employee morale,
- Reduced utilise costs,
- Higher attraction and retention of talent,
- Lower rates of sickness absence; and
- Reduced carbon footprint of employees and business.
The Disadvantages of a 4-day Working Week
Whilst the benefits of the 4-day work cannot be overlooked, the scheme will not work for all companies. Some employers have found several disadvantages of the model, including:
- Reduced customer satisfaction,
- Increased working hours, which could in turn lead to burnout for employees (when choosing to compress hours of a 5-day week into a 4-day week); and
- Reduced productivity (some employees could find fitting their workload into 4 days stressful and unmanageable leading to reduced productivity).
Employment Law Considerations
If you are thinking of implementing the 4-day working week, there are a number of employment law factors which you need to consider.
Changes to contracts of employment.
- If you decide to switch to a 4-day working week, this will involve contractual changes to employee’s contracts of employment.
- Contract of employment cannot be amended unilaterally unless there is an express contractual right to do so within the contract.
- It may be unlikely that an employee would disagree with the amendment, however employers should be mindful that this situation could arise.
Holiday entitlement.
- Changes to holiday pay will depend on which model an organisation implements.
- If employee’s hours are condensed from five days to four their holiday entitlement should remain the same as they are working the same number of hours per week.
- Alternatively, if the employee works 20% less hours per week, it is likely that employers will wish to amend the holiday allowances to reflect the reduction in hours.
- Any changes to holiday allowances will constitute a change of contract and (as discussed above) any changes cannot be made without the employee’s consent.
- An employer should discuss potential changes to holiday allowances during the consultation period with employees when proposing the 4-day working week.
Part-time workers.
- Where an employer introduces a 4-day working week, with a 20% reduction of hours but no reduction in pay (model 1), it is likely that issues will be raised by part-time employees who are working the 20% reduction of hours already but currently receiving 80% pay.
- Employers need to ensure that part-time employees are treated no less favourably than that of full-time employees. If an employer fails to make these considerations there is a risk of claims for less favourable treatment of part-time workers and/or indirect discrimination claims.
- When implementing model 1 of the 4-day week an employment could choose to offer part-time workers a 20% pro-rata deduction in hours on the same pay (same as offered to full-time employees) or part time employee’s pay could be increased to 100% of full-time salary employees to match the full-time employees.
- Part-time employees’ holiday entitlement will also need to be reviewed.
Speak with an Employment Law Solicitor
If you would like to discuss the 4-day working week further and/or are considering implementing a 4-day working week at your organisation, please get in touch with the Employment team at DTM Legal.
