Allowing employees to work flexibly has become almost an expectation post Covid, but a new Bill that has been introduced in the UK may be taking this too far. The UK parliament is currently considering legislation that would give employees the right to demand a 4 day working week. Whilst the Bill is not due to be published until mid-October, the UK Labour party’s pre-election plan suggests that employers would only be able to refuse a request where such working arrangements are “not reasonably feasible”.
Under the scheme employees could receive their full pay whilst working 80% of their current hours. A “compressed” hours arrangement has also been mooted whereby employees could work their usual number of hours, but within a reduced number of days, for example 4 ten-hour days.
Joe Ryle, Director of the 4 Day Week Campaign said that “The 9-5, 5 day working week is outdated and no longer fit for purpose”, and that a move to a shorter week would make people “much happier”. He also noted that a 4-day week would compensate employees for below inflation pay increases. Another justification for the arrangement that has been advanced is that employees lack bargaining power.
The Bill follows a trial of a 4 day working week by 61 businesses in the UK, of which it has been reported that 54 intended to continue the arrangement beyond the expiry. During the trial employees agreed to deliver 100 percent of their output in 80 percent of the time. However, some organisations reported a drop in productivity after the 4-day week was formalised.
In New Zealand there have been similar trials, notably at Unilever and Perpetual Guardian Trust. Whilst some employees reported feeling increased pressure to complete work within a shorter timeframe, particularly around deadlines, the majority of staff said they felt more engaged, with absenteeism and stress levels dropping. Overall, the trials were deemed a success and both companies continued the 4 day week beyond the initial trial period.
Despite the enthusiasm of some businesses and their willingness to embrace a shorter working week, the reality is that this will not suit all employers. In particular, professional services firms, hospitality and retail need to be able to service their customers as and when they require. Whilst this can be dealt with to some extent by staggering the days that employees take off, this potentially impacts collegiality and the ability to supervise and support junior staff. Firms that invoice clients for time will also likely suffer from a drop in productivity and revenue.
More problematic, however, is the lack of employer choice presented by the UK proposition. An “employment agreement” requires the consent of the parties to terms and conditions of employment. Hours of work is a fundamental part of this. Therefore, the notion that the parties can agree on hours of work arrangements at the beginning of the relationship, only to have the employee then demand to unilaterally change these, undermines the basis upon which our system is constructed.
Surely the time and place to discuss and agree hours of work is at the time the employment agreement is entered into. It may be true in some instances that employees have less bargaining power in this context but creating a system where employees can agree to one thing, and then demand something different, is arguably lacking in good faith. From an employer’s perspective they are not getting what they bargained for.
The likelihood that the UK legislation will contain something along the lines of a “not reasonably feasible” exception, may not be enough to placate employers. The Courts typically apply a high threshold for reliance on such tests, and employers will be on the back foot in having to justify their position.
Changing social expectations around work – life balance and competition for good staff will force employers to consider requests for flexible working arrangements, and New Zealand already has legislation which requires employers to consider such requests in good faith and provide reasons if they refuse. However, imposing a 4 day week may be setting a dangerous precedent and any proposal to introduce it here is likely to be met with strong resistance by many employers and business groups.
This article was originally published in The Post.
