Moving staff to a 4-day working week: Legal considerations for employers

Between June and December 2022, a pilot study was undertaken in the UK in which 61 UK based companies with more than 3,300 employees trialled a four-day working week based on the 100:80:100 model. Workers received 100% of their pay for working 80% of their previous hours in exchange for a commitment to maintain 100% productivity.

The study was run by researchers at Cambridge and Oxford universities and Boston College, as well as groups including the four-day week UK Campaign and the UK think tank Autonomy. 92% of the companies that took part in the trial decided to continue with the four-day week policy, the majority as an ongoing trial and 29% implementing it as a permanent change.

According to the study, staff productivity levels were maintained; there were improvements in staff retention and wellbeing; a reduction in sick days, and lower levels of burnout.

Would this model work for all employers? 

In this article, we consider some of the legal issues that employers should bear in mind before implementing such a policy.

Is it suitable for all workers?

A four-day working week is not going to be practical for a sector that requires a seven-day presence. In order to plug gaps created by the shorter working week, companies may have to pay more overtime or draft in more staff. And some staff may have to work harder to cover for their colleagues.

If the business has a mix of office-based roles - for example where some employees work a standard nine to five for five days and others work seven-day shifts – it’s not hard to imagine that morale may be damaged by a policy that appears to treat some workers more favourably than others. The key for the business will be to strike a balance between staff well-being and productivity as, at the end of the day, any such policy must make financial sense for the business if it is to be commercially viable moving forward. It can be a challenge to determine exactly where that balance lies.

What are the contractual implications?

Before considering any changes to contracts of employment, it is advisable to consult with staff. If a trial of the four-day week is agreed upon, then it should be a non-contractual arrangement to ensure that there is maximum flexibility. The employer will need time in which to carefully assess if the policy is going to be commercially viable and beneficial for its entire staff. Even in non-contractual trials, employers should be clear as to exactly how long the trial will last and how the success or failure of the trial will be measured, and ideally, these issues should be determined in consultation with staff before the trial commences.

Assuming the trial is successful, and the employer would like to make changes to the employees’ contracts of employment to introduce such a policy, careful consultation is needed. Employers cannot impose unilateral contractual changes without the consent of its employees or it run the risk of claims, such as constructive unfair dismissal.

If everyone is happy and the employees’ contracts are changed, a ‘section 4 statement’ detailing the changes should be given to the employee within one month of the changes taking effect. 

Pay implications for part-time staff

These changes will, of course, impact part-time workers. Employers must ensure that they are not subject to any detriment compared to their full-time colleagues whose working week has decreased. The employer will need to decide whether it is practical to require part-time workers to also reduce their hours, or if those part-time workers are now going to be required to work a four-day week and become ‘full time’ with a consequent increase in pay? These are all issues that must be considered before any trial commences.

How will productivity be measured?

During the trial period and beyond it will be important to monitor productivity as objectively as possible to ensure that 100% of productivity is being maintained. This will involve questions such as:

• How will managers be able to evidence that those who are receiving full pay but working fewer hours are working any differently to those on existing pro-rata contracts?
• What does the requirement that ‘all work must be completed’ actually mean, and in what circumstances would someone be expected to work the extra day?
• Will it be a condition of the employee working a four-day week to remain contactable during their non-working day? Would that be a necessity for business continuity and to ensure adequate supervision for junior staff, or to avoid unduly burdening other members of staff? Employers will need to be careful not to contact employees excessively during non-working time as this could be a breach of the implied duty of trust and confidence.

Sex discrimination

Women are three times more likely to work part-time than men and nearly four times more likely to work term-time only than men. As such, it is important that any differences in how workers are treated does not disproportionately affect women, unless the employer is able to justify any difference in treatment as a proportionate means of achieving a legitimate aim.

Working Time Regulations 1998

All employers are required to abide by the requirements of the Working Time Regulations 1998. Within the Regulations, there is a stipulation that workers must be given sufficient work breaks. If the overriding objective is to generate 100% productivity, there may be a temptation for workers to skip breaks or work excessive hours over their four days.

The Regulations also state that employees should not work more than 48 hours per week on average unless the employee decides to ‘opt out’, which must be recorded in writing. Daily rest breaks of twenty minutes need to be provided for those who work more than six hours during the day and between working days 11 hours’ rest needs to be provided between finishing work and re-starting. Weekly rest - namely an uninterrupted 24 hours without any work each week and an uninterrupted 48 hours without any work each fortnight - also needs to be provided.

Employees working a five-day working week are entitled to 28 days holiday, assuming a full holiday year is worked. If the employee works a four-day week, the statutory holiday entitlement may change. Employers need to consider whether to retain their existing holiday allowances or reduce them by 20% in light of the reduction in working days. This may not be popular with staff, especially among those who find themselves working longer hours during their four days. Employers would also need to consider the terms of their employment contracts, as any contractual changes should be made with the consent of the employees affected.

Stress and safeguarding the health and well-being of your staff

Trying to get five days’ work done in four could leave employees vulnerable to higher levels of stress.

Full-time employees will be working very long days if they are to achieve the same productivity in four days as they had previously achieved in five.

The duty of care that employers have to their staff includes safeguarding their health and wellbeing - and that means not overwhelming them with work.

Conflicts of interest

If employees are working a four-day week they may decide to work for someone else on their non-working day. This is a real possibility for those hit hard by the cost of living crisis. Or maybe some employees will use their ‘free’ day to build their own business.

Most contracts of employment include a ‘whole time and attention’ obligation that requires the employee to devote their full time to their duties during working hours. An employee is, however, largely free to pursue their own interests during their non-working time provided that their endeavours do not negatively impact on their duties for their employer or result in unfair competition.

Most employees are under an implied duty not to compete with their employer but employers may want to protect the position further. This can be done by including an express obligation in the employment contract for the employee to report conflicts of interest should they arise.

A further issue surrounds policies that relate to personal use of business equipment and resources on the employee’s ‘free’ day.

Finally, it is advisable for all employers to have clear social media guidelines, whether their employees work two or seven days a week. These will help ensure that work for the employer does not become blurred - or be in conflict - with the employee’s outside interests.

If you have questions about this article or would like support in understanding the full implications of implementing a four-day working week and the appropriate, fit-for-your-business policies you’ll need, please get in touch with the BLHR & Employment Team. We will be happy to discuss how we can help. We offer a fixed fee BLHR service.