Oliver Tuscarny
14 Feb 2025
A one size fits all policy may be bad for employers and the economy.
A major shake-up of workers' rights is on its way in the 2024/25 Employment Rights Bill introduced in the House of Commons on 10 October 2024.
The Bill covers reforms to several areas of employment law, including unfair dismissal, flexible working, statutory sick pay, family leave, protections against harassment, fire and rehire, collective bargaining in the education and adult social care sectors, trade union law and enforcement of labour market rules.
The bill is still subject to full review by Parliament, and we will see additional amendments before its full implementation.
In early 2025, a number of MPs have proposed an amendment to the Employment Rights Bill, urging the Government to explore reducing the standard working week to 32 hours.
As it stands, the Employment Rights Bill makes no specific mention of the four-day week. However, it does include a reform to make flexible working “the default,” with employees having the right from day one to request flexible working arrangements which could include a four-day week through compressed hours.
Whether the government should legislate a four-day workweek is a complex issue with strong arguments on both sides.
The idea of a four-day workweek sounds appealing, but in practice, it presents serious challenges that could outweigh the benefits. Here are a few key reasons why a four-day workweek could be a terrible idea:
Reduced Productivity in Certain Sectors
While some office jobs might handle the shift well, many industries such as healthcare, manufacturing, and retail require consistent staffing. A four-day workweek could lead to staffing shortages, forcing companies to hire more workers or pay expensive overtime.
A mandated blanket policy change may be impractical for all sectors.
Increased Workload and Stress
If businesses expect employees to maintain the same output in fewer days, it could lead to longer work hours, increased stress, and burnout. A compressed schedule (e.g., four 10-hour days) may be more exhausting than a traditional five-day setup.
Negative Impact on Customer Service
Businesses that operate on a standard five-day (or seven-day) schedule might struggle to maintain customer service levels. Delays in response times, difficulty scheduling meetings, and inconsistent availability could frustrate clients and customers.
Higher Costs for Businesses and Consumers
Small businesses might find it difficult to adjust. If they need to stay open five or more days a week, they may have to hire additional staff, increasing payroll costs rather than reducing them.
If businesses pass costs onto consumers, it could contribute to inflation or economic instability.
Reduced Economic Activity
With fewer workdays, there could be a decline in economic activity, especially in service industries like restaurants, transport, and entertainment, which depend on the flow of workers throughout the week.
Not Suitable for All Jobs
While knowledge-based jobs might adapt, professions that rely on in-person presence (teachers, healthcare workers, emergency responders, etc.) might find a four-day model unworkable.
Reduced Wages
If a four-day week means fewer hours, some employees might see pay cuts unless productivity significantly increases.
Legislation that insists on a four day week with no wage loss will significantly increase payroll costs. It would effectively grant a 20% pay rise for all employees.
Whilst great in theory for the employees, the financial strain to business could lead to redundancies and business closures. It may also add to inflation pressures as prices rise to cover the additional payroll costs.
International Competitiveness Issues
In a globalized economy, businesses that operate on a four-day schedule might fall behind competitors in countries that maintain a five-day (or longer) workweek, potentially leading to economic disadvantages.
Arguments for Legislation
Improved Work-Life Balance
A shorter workweek could reduce stress, improve mental health, and enhance overall well-being.
Higher Productivity
Studies in some countries (e.g., Iceland, UK pilot programs) suggest that a four-day week can lead to the same or even increased productivity.
Environmental Benefits
Fewer commuting days could reduce carbon emissions and congestion.
Job Creation
If companies need to maintain output, they might hire more workers, potentially reducing unemployment.
Alternative Approaches
Instead of mandating a four-day week, the government could incentivize it through tax breaks, pilot programs, or allowing businesses to experiment with flexible schedules.
A four-day workweek may work in specific cases, but as a broad policy, it comes with major challenges that could outweigh its advantages.
Should the government legislate it, or should it be left to employers and employees to decide?