The concept of a four-day work week has gained considerable traction in recent years, following successful trials in Europe, the United States, Canada, New Zealand, and now Australia. Advocates claim it can lead to improved productivity, increased employee well-being and a better work-life balance.
Most four-day work week trials in Australia have adopted the “100:80:100” model, whereby workers receive 100% of their pay, while only working 80% of the time, as long as they maintain 100% productivity.
Implementing a four-day work week is not without its challenges for employers.
Consultation requirements
Modern awards and enterprise agreements generally require employers to consult with employees when a definite decision has been made to introduce a major workplace change, particularly if it affects employees’ rosters or hours of work.
Employers must ensure that they carefully follow any consultation requirements under the relevant industrial instrument/s before moving to a four-day work week.
This usually involves:
- providing employees with information (other than confidential information) about the proposed change; for example, information about the nature of the change and its anticipated commencement date
- encouraging employees to express their perspectives on how the proposed change might affect them, encompassing any potential implications for their family or caregiving commitments; and
- genuinely considering employees’ views before implementing the change.
Employers who fail to follow the relevant consultation requirements above, may breach the Fair Work Act 2009 and potentially be liable for significant financial penalties imposed by the Court.
Enterprise bargaining
Employers could consider implementing a four-day work week via an enterprise agreement (EA). Subject to passing the “Better Off Overall Test” and procedural requirements, EAs can simplify employment conditions set by a modern award.
However, drafting, interpreting, and negotiating enterprise agreements can be complex and overwhelming. The bargaining process can be long and take critical resources away from your business.
We recommend employers carefully consider how to best implement and intergrade a four-day work week within their organisation and seek professional advice and assistance when drafting and negotiating EAs.
Workload management
One of the primary challenges faced by employers is effectively managing workloads with a reduced work schedule. While most four-day work week trials have not reported a decrease in productivity, employers may find that reducing the work week by one day could potentially lead to a decrease in overall productivity. This may require employers to manage underperformance, which can be a challenging process.
Employers need to carefully assess their staffing requirements and consider hiring additional personnel to ensure operations are not adversely affected, especially in customer-oriented businesses that need to remain accessible to clients throughout the week. It may also be impractical for employers in certain industries such as disability services, health care or other industries with irregular hours to implement a successful four-day work week practice.
How can we help?
We recommend that employers carefully consider their industry, workforce, and the unique demands of their business when contemplating a four-day work week. While the change might possibly offer numerous benefits, including improved employee health/satisfaction/work-life balance, talent retention and reduced overheads, employers must take a strategic and well-planned approach to ensure a smooth transition without breaching any of their regulatory obligations.
Our experienced Employment and Workplace Law team can provide assistance with any employment law related queries.