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More clarity needed on Labour's 4 day working week

More clarity needed on Labour's 4 day working week

Published: 25 September 2019

Our head of employment Andrea London spoke to Recruiter about Labour’s plans to limit the working week to 32 hours and why it’s unlikely to come to fruition.

Recruiters require greater clarity on the finer detail of just how Labour plan to implement plans for a four-day week.

Shadow Chancellor John McDonnell revealed at the Labour Party Conference yesterday, that if elected, Labour would cut the average working week in the UK to 32 hours within 10 years.

The move would reduce the working week to the equivalent of four days, although it would not necessarily mean a day off as other methods could be used to cut hours and could be done with no loss of pay, according to McDonnell.

But Barry Ross, director at Crossland Employment Solicitors, told Recruiter while McDonnel’s plan sounds like a nice idea, it is unlikely to be workable in practice.

“The vast majority of employers are not going to be able to sustain the loss of their work force for 20% of the time and continue to pay them at the same rate of pay.

“The proposals also don’t take into account those workers or employees who want to work longer hours, to earn more money and to provide for their families. Practically, many employees are able to – and do – opt out of a 48-hour working week and would continue to be able to do this even if a maximum working week was reduced to 32 hours, though Labour also proposes to remove the ability to opt out of the maximum working week, if they are successful.

“Assuming for a moment this utopian proposal was to go through, then all employers, including recruitment agencies, would have to ensure that they did not employ anyone to work for longer than 32 hours per week, on average, in any 17-week period. … This would mean an amendment to the way that current contracts are drawn up and stricter monitoring of working hours for staff, particularly those agency workers with a role that involves travel that constitutes working time.”

Clare Gilroy-Scott, partner at law firm Goodman Derrick, told Recruiter the policy announced by Labour is not a simple statutory cap on weekly working hours, although they are proposing to remove the right of workers to ‘opt out’ of the 48-hour working week limit currently permitted by the Working Time Regulations.

“The proposed policy to limit the working week to 32 hours is to be achieved through an increase in collective bargaining, with ‘legally binding’ agreements to be reached between the unions and employers as to how to limit working hours. Introducing a four-day week is only one suggestion and other options include shift changes and an increase in paid holiday. The intention is that any such change should not result in a reduction in pay for the worker.”

Gilroy-Scott adds collective bargaining would be carried out on a sector-by-sector basis.

“Recruiters would need clarity as to whether an agency worker is deemed to be their worker or the worker of the end-user client, in order to ascertain which collective agreement might apply, as well as being cognisant of the worker’s rights to equal treatment with comparable workers in the client organisation under the AWRs [agency worker regulations]. In this regard recruiters would need to aware of and understand any collective agreements relating to working hours in place in the sector into which they provide workers, to ensure compliance.

“Contracts with both client and agency worker will need to be clear as to working hours and arrangements for paid holiday in light of any collective agreements in their sector. … Recruitment businesses will also need to be mindful of their own employees and workers and whether there is an applicable collective agreement on working hours in place.

“In addition to increased power and flexibility of the unions to bargain with employers, the proposal is also to be achieved through the introduction of a Working Time Commission, which would have the power to increase statutory paid leave if necessary. It remains to be seen whether such a commission would be involved in enforcement of workers’ rights but the increase in union involvement may take non-compliance issues out of the workers’ hands, to be resolved between employers and unions.”

Also commenting on the plan, Stephen Jennings, partner & solicitor, Tozers Solicitors, told Recruiter the implications for recruiters would be mixed:

  • They may find themselves getting less work out of their own employees for the same money. As customer-facing businesses, however productive their employees may be, they will still need to be open during normal business hours or risk losing business. Thus, staff costs may increase.

  • However, clients will also be in this position and would have less flexibility to respond to temporary work increases if their own employees’ hours are effectively capped by an agreed limit. In this case, there may be a greater need for agency workers to fill in the gaps.

But Andrea London, a partner and head of employment at law firm Fletcher Day, told Recruiter the prospects of Labour’s proposal being implemented as any kind of directly enforceable cap on hours is “simply not going to happen”.

“We only have to look at what happened when France introduced a maximum 35-hour work week in 1998. Lower-income families generally want to have the freedom to work more, not less.

“The headlines are misleading though; as what Labour are suggesting is a ‘massage’ of the labour market over the next 10 years to achieve a reduction in ‘average’ hours worked – indeed this average will probably need to be different from sector to sector, as juggling the logistics of a four day week with public service industries, such as the NHS, would be hugely complicated.

“So, is a significant change coming? It’s difficult as yet to say – but even if it does, it won’t be compulsory, nor is there any suggestion of using legislation to achieve the objective. … If productivity is not increased, the results are likely to be lower numbers of jobs and over-reliance on technology, resulting in lack of investment opportunities and fewer successful start-ups in the UK.”

Although London adds those businesses that have trialled a 36-hour week, as opposed to 40 hours, have reported an upturn in recruitment, retention and higher workforce morale.

“Whether this is the future or not, however, is clearly something which needs significant further consideration and fortunately, will not be happening any time soon.”

This article was written by Graham Simons and first published by Recruiter on 24 September 2019.

Andrea London | Partner | Head of Employment

For further advice, or to discuss your case, please contact Andrea London at andrea@fletcherday.co.uk or on 020 7632 1442

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.