Lucy Gordon
Walker Morris, Leeds
lucy.gordon@walkermorris.co.uk

The world's largest trial of a four-day working week to date, organised by 4 Day Week Global, took place in the UK between 2022 and 2023. Sixty-four companies participated in the trial, with around 2,900 workers. The participants were deliberately sourced from diverse sectors and had employee populations ranging from fewer than ten employees to more than 100 employees.

Initial results

The initial results from the trial look incredibly promising. After six months, 92 per cent of participants decided to continue with the model, including 18 businesses that decided to adopt the pattern permanently. Participants recorded reductions in sickness absence by two thirds, and 57 per cent fewer staff left their employers compared to the previous year. Thirty per cent of employees reported that they felt less stressed and 71 per cent reported reduced levels of burnout (although this was post-pandemic). Fifty-four per cent of employees reported an improvement in work–life balance. While the initial results have sparked excitement for employment professionals and for those companies looking to become early adopters of the concept, there are still some unanswered questions that warrant consideration.

It sounds simple, but culturally, this is a huge shift – it was only at the beginning of the 20th century that the UK ended the six-day working week. What caused this recent shift? The concept of a four-day week has been touted by economists and psychologists for decades, but it was undoubtedly the Covid-19 pandemic that changed perceptions about flexible working and paved the possibility for such a radical change, together with the current economic climate and the ‘cost of living crisis’ in the UK. 4 Day Week Global estimates that a parent with two children could save on average £3,232.40 per year on childcare costs by working a four-day week, which may make it easier for some parents (typically women) to return to, or remain in, employment after having children.

At present, there are no firm plans in the UK to legislate for a four-day working week, unlike in some European jurisdictions, so adoption of the pattern is purely at the discretion of employers. However, in mid-October 2022, the first ever parliamentary debate relating to the concept of a four-day working week was held to discuss the proposal for implementing the concept in the UK, suggesting a wider societal inclination for adoption than seen before.

For businesses contemplating the move, what do they need to consider?

The typical assumption in the UK is that a four-day week means working Monday to Thursday, with Fridays off. However, there are no restrictions on what can be offered, and the UK trial did not dictate a specific pattern, so long as employees were entitled to 100 per cent of their pay and had a 'meaningful' reduction in work time (meaning that weekly hours had to average out at 32 hours per week over a year). Understandably, an employer may be apprehensive about introducing a four-day working week, due to the uncertainty it could bring for employees, production, targets, profits and customer experience.

The UK trial did not implement a 'one-size-fits-all' approach; instead, it allowed each participant to design a policy tailored to its operational needs, organisation, departmental structure and culture. These included fifth-day stoppages, where a specific week day is suspended; staggered patterns, where employees take different days off to ensure continued production/service; de-centralised models, where teams can decide their own patterns; annualised models, where staff work on average hours equivalent to four days per week but can allow for seasonal peaks and troughs; or conditional models, where staff entitlement is tied to ongoing performance monitoring.

A sensible solution to any uncertainty is, of course, to run a trial period to understand whether the model suits the business and the workforce. Should the employer need to retain the option to revert to a five-day model, to avoid an employee relations disaster it must set clear, transparent and measured objectives from the outset, outlining that these will need to be met to justify a permanent transition to the four-day week.

Other issues

The conundrum of dealing with part-time workers was approached in a variety of ways by the pilot companies that took part in the study, especially in relation to pay and time off. There is a risk that part-time workers could suffer a detriment compared to their full-time counterparts if working time is reduced for full-time workers, but pay is not. Some of the solutions for part-time workers included a pro-rata working time reduction; a pro rata pay rise to match the new pay rate of their full-time (four-day week) colleagues; or a small increase in bookable annual leave.

Interestingly, one of the pilot companies canvassed opinions on the effects of the four-day week on its part-time workers, requesting input from a union representative. As a result of the interaction, the decision was made that the working time reduction for part-time staff would be calculated on the scale of a month, as opposed to a week. This enabled part-time workers to have a regular additional full day off. By involving the workforce in the decision, an employer may not only increase engagement with the concept, but also discover innovative solutions that are advocated for by the workers who will be able to enjoy them.

Decisions relating to annual leave and how the four-day working week affected entitlements were left to pilot companies, as is the case for traditional annual leave entitlement. Of course, a worker must be entitled to take the statutory minimum, but any entitlement above this level is at the discretion of the company. Some pilot companies decided to retain the full entitlement previously offered on a five-day working week, while others implemented a pro rata reduction in entitlement. In any case, a worker on a four-day working week was entitled to a significant increase in ‘time off’ in comparison to the five-day model.

A company interested in trialling the four-day week may be questioning the potential impact on overtime arrangements that have traditionally been in place. It's interesting to note that while almost half of the pilot companies recorded no change in the amount of overtime hours their workers completed, the frequency of overtime fell by more than 30 per cent.

The UK trial has not, however, provided answers to all the questions that employers interested in implementing a reduction of hours are likely to have. While further information may come from a more long-term study, there is a need to understand how a four-day working week will impact contractual benefits entitlements for workers and any additional or time off in lieu arrangements that may have been agreed between the employer and employee (or a trade union). There also remain outstanding questions related to the long-term viability of a four-day working scheme, and whether the excitement for a reduction in working hours can be sustained (or if indeed, a company may need to renege on such an agreement in the future after adoption, and how that may result in liability from breach of contract claims from employees).

Exclusivity

One of the key issues for employers to consider is whether employees can perform other work on the non-working day. Given the current cost of living crisis in the UK and soaring interest rates, some employees may want to take up a second employment. Do exclusivity clauses and/or conflict of interest provisions need to be amended? If second employment is permitted, the employer will need to ensure that it obtains sufficient information from the employee to enable it to monitor working hours in accordance with the Working Time Regulations 1998.

Financial implications

Revenue of the participating companies during the trial rose 1.4 per cent on average. When compared to a similar period from the previous year, reported revenue increased 35 per cent on average. The financial benefits of the four-day working week are apparent in the short term (even accounting for Covid-19), but there is still work to be done to show that the long-term financial prosperity of the employer wouldn't suffer. This highlights a shortfall of the UK trial, in that the six-month period for which the trial was held is unlikely to be indicative of the longer term.

Conclusion

Those looking to move to shorter working weeks now have access to a growing base of organisations already ‘ironing out’ the four-day week in practice, by adapting different models and structures to the demands of their own size and sector and building up a toolkit of tips and tactics to be drawn upon by others. The UK trial has proven to be ground-breaking for work culture in the UK and whether or not other employers adopt the model, it is certainly making businesses reconsider the traditional norms.