Four-day week: what are the legal considerations for HR?
At the start of June, more than 70 companies embarked on a trial of working a four-day week. The pilot will last for six months and employees involved will receive 100% of their usual pay, just working 80% of the time.
It's clear that the pandemic made many employers realise the benefits of offering workers greater flexibility of how, where and when they work, and support for a potential four-day week is growing here in the UK.
A survey last October found that almost two-thirds of workers would like to work a four-day week and would opt for this benefit over gym membership or other popular benefits. Public sector workers in Scotland are to be offered a four-day week arrangement, albeit for a pay cut.
If the pilot is successful, we could see an increasing number of companies looking to four-day weeks as a way to attract and retain staff. But what are the legal considerations of moving to this working model?
Proposing a four-day week benefit sounds like a great catch-all benefit for employees, but what about staff who already work part time? In any business it's likely there will be a portion of workers who work three- or four-day weeks already, receiving a pro-rata wage.
"One of the major considerations for employers looking to move to a four day week but pay employees for five, is that they probably have some part-time employees who already work four days and who are paid for four days and not five," says Beverley Sunderland, managing director at Crossland Employment Solicitors.
One aspect of moving to a four-day week organisations will be keen to monitor is whether a similar level of productivity is maintained over the shorter week. How will managers be able to evidence that those who are receiving full pay but working fewer hours are working any differently to those who are on existing pro-rata contracts, Sunderland asks?
"Although those who work part-time do have additional rights to bring claims that they are being treated less favourably than their full-time equivalents, the defence that employers have is that if those already on part-time hours want to increase their productivity to five days then they will be paid for five days - but it will not be without its complications."
Kathryn Clapp, employment expert at law firm Taylor Wessing, adds that a further risk could be a claim of sex discrimination. "People who currently work part time could bring claims for sex discrimination if an employer does not offer to 'match' the offer of fewer hours for the same pay for them," she says. "Decide whether the new shift to the new working pattern will apply to all or just some staff, and whether it will be a new informal working arrangement or a contractual change.
"If staff have the choice to sign up, what happens if the employer later decides either to make the change permanent, or revert back to five days a week working? Clarity at the outset will avoid potentially costly disputes later."
Sticking to Working Time Regulations
While a four-day week means employees can spend more time with their families or doing non-work activities for an extra day, it could mean they're busier during the four days they are engaged with work.
Simon McMenemy, managing partner at employment law firm Ogletree Deakins, advises employers to be mindful of working time regulations during the four days at work. "As long as employers ensure workers have sufficient daily rest breaks in accordance with the Working Time Regulations, we won't see any employment law issues arise."
Trying to get five days' work done in four could leave employees vulnerable to higher stress levels too, adds Marcin Duriak, managing partner at IMD Solicitors. Managers should not assume fewer hours will automatically equal a better work-life balance, he advises.
"Instead, employers should be thinking about the extra pressures it might place on employees, and how to mitigate these. For example, employees could find their client relationships are impacted if they adopt a four-day week while their client is still working - and accustomed to them being contactable - for the full five days," he says.
Getting the same amount of work done in a shorter period of time means employers must be mindful of their duty of care to employees - overburdening them with work could lead to physical or mental health issues.
Duriak adds: "If business is still operating as usual, for the full five days a week (or more), staff may have to work harder to cover for their colleagues. These issues should be preempted and the necessary measures implemented to deal with them if they come up."
What happens on the other day?
If organisations are intending to operate for customers and clients on a five-day basis, they need to establish clarity on whether employees are contactable on their 'off-days' or their work is covered by a rota or shift system.
"[The four-day week] does leave a number of unanswered questions - for example, what does the provision that all your work must be completed mean, and in what circumstances would someone be expected to work the extra day?" asks McMenemy. He advises employers to 'war game' potential scenarios for what they will do in these scenarios, and produce some policy guidance before they launch any four-day week proposals.
A study by think tank Autonomy - one of the organisations involved in the current four-day week pilot - found that the pandemic caused a "hidden epidemic of overtime" among employees because the boundaries between work and home had become so blurred when offices were closed. It wants the government to consider granting employees a legal right to disconnect - something that already exists in France and Spain.
Hannah Ford, a partner and employment expert at Stevens & Bolton, says: "Unlike in some other countries, there is currently no legal right in the UK to disconnect during non-working time. It may well be a condition of the employee working a four-day week that they remain contactable during their non-working day, for business continuity and to ensure adequate supervision of juniors, and to avoid unduly burdening other members of staff."
People who currently work part time could bring claims for sex discrimination if an employer does not offer to 'match' the offer of fewer hours for the same pay for them.
Kathryn Clapp, Taylor Wessing
However, she warns that businesses should ensure that contact during non-working time is not excessive, as this could breach trust and confidence. "It could also undermine a key rationale for a four-day week, to provide more rest and leisure time in order to increase productivity and employee wellbeing," she adds.
Potential conflicts of interest
If employees are working a four-day week, there's a small chance they might decide to work for another employer on the other day, even if they're receiving full pay. Equally, some employees may use the extra day to build their own business. Ford says a second role should not pose any legal issues, but with a few caveats.
"Most contracts of employment include a 'whole time and attention' provision, requiring the employee to devote their full time to their duties during working hours," she says. "However, an employee is largely free to pursue their own interests during their non-working time, provided their endeavours do not negatively impact on their duties for their employer or result in unfair competition."
That said, all employees are under an implied duty not to compete with their employer, she adds. "Many contracts of employment include an express obligation to report conflicts of interest where they arise and this is also an implied fiduciary duty, owed by directors and other senior employees.
"Businesses should also be alert to employees using their employer's resources, such as tech, office equipment or goodwill, to further their side enterprise. To avoid employees taking advantage, businesses should have clear policies on personal use of their equipment and resources, and also accessible guidelines on using social media to prevent employees blurring their outside interests with their work."
What if it doesn't work out?
The 'official' UK pilot of four-day week working is set to last until the end of 2022. If employers decide they want to see if it can work for them, is it also advisable to do an initial trial? Kirstie Beattie, senior employment solicitor at employment law and support company WorkNest, advises businesses to proceed with caution.
"The introduction of the four-day week would be a permanent measure unless the employer very carefully drafts its contractual provisions to the contrary," she says. "Even if the employer built in discretion to amend or revoke the new way of working, that discretion would have to be utilised reasonably to avoid employees resigning and claiming constructive dismissal."
If the trial was not a success, an employer might need to embark on a consultation process to seek the agreement of the employees to revert back to a five-day week, which could be challenging.
She adds: "If they don't get agreement, the employer would have to consider termination and re-engagement on the old terms which carries with it unfair dismissal risks. This would be particularly problematic if the employer dismisses a large number of employees."
Not everyone works in an office
"While many of those companies doing a four-day week trial are traditional office-based companies, we do also need to consider what it means for essential services, shift workers and public sector roles," Beattie adds.
"If your business has a combination of office based, nine to five, workers and seven-day-week shift workers, and you reduce the office workers' hours to four days, then it's likely to create unrest and tension amongst employees and could result in resignations and high staff turnover."
But while there may be issues to iron out from an employment law perspective - and precedents yet to be set - she urges organisations to remember the positive impacts working a shorter week could have.
"It's likely to be beneficial to employee mental health and morale as you're promoting a healthy work life balance and it will boost your reputation and attractiveness as an employer which will support recruitment," adds Beattie. "It's also been found to actually boost productivity so it will be interesting to see what the outcomes of the trial are in this area for the productivity of the UK workforce specifically."