Managing redundancy & embracing the four day work week

Can a four-day work week truly revolutionise the way we approach productivity and work-life balance?

On this episode of the Employment Law Pod, Andy Whiteaker and Helen Goss tackle this intriguing question and much more. Redundancy is a complex and often emotionally charged topic. The episode begins by discussing suitable alternative roles, emphasizing that what constitutes a "suitable" role can be highly subjective. 

But that's not all—we also shift gears and explore the increasingly popular concept of a four-day work week. Initial scepticism has given way to promising results from trials in the UK and beyond, showing that fewer workdays can actually boost productivity. However, the four-day work week is not without its challenges, Andy and Helen provide valuable insights into how businesses can navigate these challenges.

Don't miss out on this fascinating discussion that could potentially redefine the future of work. 

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Transcript

Andrew Whiteaker: 0:04 

Hello and welcome to the Employment Law Pod from Boys Turner. My name's Andy Whiteaker, I'm a Partner in the Employment team and once again I'm very pleased to say that I'm joined by my colleague and fellow partner in the team, Helen Goss. 

Helen Goss: 0:15 

Hello everyone. 

Andrew Whiteaker: 0:17 

And, as ever, on the Employment Law Pod, we are going to be talking about some things that we've seen in the news, some recent cases and things that we've seen that are interesting, we think, from an employment law perspective, and have a bit of a chat about those. So, Helen, what are we going to be talking about today? 

Helen Goss: 0:33 

Well, in the last podcast, we looked at some areas in relation to redundancy and we said that we were then going to look, at this time, at suitable alternative roles, trial periods and bumping. 

Andrew Whiteaker: 0:47 

OK. 

Helen Goss: 0:49 

But we're also going to talk about the four day week. 

Andrew Whiteaker: 0:52 

Yes, absolutely. Redundancy two, and then a bit of a chat about the four day week as well. 

Helen Goss: 0:57 

Exactly so. There are quite a lot of redundancy reorganisation programmes going on at the moment, so it's almost as if we've got back to pre-COVID life, really. 

Andrew Whiteaker: 1:11 

Yes, yeah. 

Helen Goss: 1:12 

Some redundancies are very, very sad and some are reorganisations where people are mapped into different roles and it's about aligning your business to that of your clients, so that you're more agile, you're more effective and that you're working in the best possible way with your clients yeah, and I think for individuals as well, the impact on them can vary greatly. 

Andrew Whiteaker: 1:34 

There can be some people who've been with the business for a very long time don't want to leave. You know, they they've had their entire career there, perhaps, and it's a big shock to them, whereas others in a similar circumstance, who maybe have been working for an organization for a long time and sitting on quite a substantial redundancy payment, were looking for a way out anyway and nothing better could happen to them than to be made redundant at that time. 

Helen Goss: 1:56 

No, you're right, there are mixed views as to how individuals can take it. So I've been thinking about suitable alternative roles, and that's one of the areas that can go either very swimmingly and fine and it's all very simple and everybody understands what's happening, but then it can actually be quite a problematic area if there's a dispute or a disagreement as to what exactly a suitable alternative role is for that particular employee. 

Andrew Whiteaker: 2:27 

Yeah, and that can impact upon whether or not the individual ultimately stays in the organisation or, if they don't stay, it can impact upon what they might be entitled to when they leave. 

Helen Goss: 2:37 

Yes, don't steal my thunder, Andy. Don't steal my thunder. 

Andrew Whiteaker: 2:39 

I'm just setting it up for you. 

Helen Goss: 2:41 

Yes, exactly that's it. So the consultation process is essentially how can we avoid this proposed or planned redundancy? People want to look at maybe changing their hours, reducing them or possibly even reducing pay, but looking at alternative roles in the business and particularly suitable alternative roles in the position in the business. So the very, very basic proposition is if there is a suitable alternative role, then that should be offered to the employee at risk, on the basis then, that the redundancy is avoided. 

Andrew Whiteaker: 3:25 

And also, I suppose it's sometimes wider than that, isn't it? It's a question of just saying to the employee here are all of our vacancies now. There might be some very unsuitable vacancies from our from the employer's perspective, but of course an employee might want to apply for them nonetheless. 

Helen Goss: 3:42 

Yes, and they might want to apply for a promotion type role or even look for a lesser responsibility role if that's perhaps where they are in their life and they're happy to do that. But where it becomes more complicated is the suitable alternative role and essentially that's a question of fact and the suitability to that particular employee. So it's about a vacant role. So there isn't any obligation on the business to actually create a new role for the individual. Now in a lot of reorganizations new roles are created but that's not specifically to retain the individual. It's about the reorganization. 

Andrew Whiteaker: 4:30 

The businesses putting together a new structure within a team or whatever it might be, and people are allowed to apply for those new roles. 

Helen Goss: 4:36 

Yeah, exactly so. As I say, there's no requirement to actually create a new role, but also HR need to remember that if a role becomes vacant during the consultation redundancy process, then that's one that they do need to bring to the attention of individuals, because that timing is quite crucial. And then, of course, we get on to suitability, which is where there is usually quite a lot of discussion and debate, depending on the particular agenda, of whether that's the employer or the employee. So suitability really comes down to a role that is similar to the current actual role, because of course it can't be the same role because we're making that role redundant, we're not necessarily making the person redundant, we're making the role redundant. So there shouldn't really be the same role that's vacant there. 

Helen Goss: 5:34 

It's really important that you look at not just the job description but actually what that person does on a day-to-day basis, particularly as what they may be doing has evolved from the original job description that may be several years ago. 

Helen Goss: 5:51 

You need to look at the ability set, skill set and competencies of the individual and look and see what roles there are that could be considered to be suitable alternative roles. You then need to look at the terms and conditions. So what's the salary, the benefits, what are the hours, the location? You know the place of work, because if it's a job that's paid significantly less, then I think it would be hard to argue that that was a suitable alternative role. If it's in a completely different geographical location, then again that may not make it a suitable alternative role for that individual. Now it may be that a small amount of training is required. So you know that's not necessarily a bar, but also you do need to have a look at status. So are you offering them a role as a suitable alternative role that takes away perhaps the status that they had in their previous role? 

Andrew Whiteaker: 6:52 

yeah, maybe they had a team to manage or something like that, but they're losing that responsibility. 

Helen Goss: 6:58 

So there are quite a lot of factors to to take into account and it's really a question of fact and, as I said before, the suitability to that employee as to whether it is a suitable alternative role, and it's for the employer, so it's for you, the employer, to show that it is a suitable alternative role. 

Andrew Whiteaker: 7:20 

And the issue of slotting comes up sometimes, doesn't it? When you're looking to reorganise and create new roles, where you might have a role that, as you said, it's not going to be the same role but it may be quite similar, and therefore you sometimes have complications where either the employer is saying well, 80% of this role is the same as what you were doing before, so we're just going to slot you into that without you having to apply, or more troublesome potentially is a situation where the employer thinks the role is sufficiently different to ask people to apply for it and they don't slot somebody in, but someone says well, I accept, it's not exactly the same role, but it's so similar you should just put me into that without me having to apply. 

Helen Goss: 8:08 

Yes, and of course that is quite challenging, isn't it? Yeah, and what you may find is that some employees will argue and say no, I want my redundancy, I want to go. Or they may decide to just go into that role and then go and look for another job over a short period of time. 

Andrew Whiteaker: 8:28 

About 10 years ago, I had a case on exactly that, where someone was employed in a role for 10 years or so because of the nature of the organisation they were working for. They were sitting on a very large redundancy payment and the employer was saying well, it is a redundancy, but there's this job that is almost the same as what you were doing before, very, very similar. And of course they don't want to pay out redundancy payments unnecessarily. And so they said well, we're just going to slot you into that role. You don't have to apply for it, we're just going to put you into that role. And the individual obviously didn't want that, and they just wanted to take their money and run. 

Helen Goss: 9:05 

Yeah, but presumably the trial period came into play, didn't it? 

Andrew Whiteaker: 9:06 

There was, but the individual didn't want to do it at all. Didn't even want to do the trial period because yeah so and, and then I think they trying to remember the facts of it, I think they did do the trial period and then said oh yes, no, it's completely different. I'm, I'm, I'm not accepting. Yes, where's my redundancy pay? 

Helen Goss: 9:21 

That brings us on to the next part of what we were we're going to talk about Andy um, because there is a possibility that an employer can avoid the liability of a redundancy payment if an employee unreasonably refuses a suitable alternative um role. So to even put you into the position where you could argue that you must actually have made the offer to the individual. So you can't just say, well, there's a role. 

Andrew Whiteaker: 9:55 

Notionally, there's a job that you could do. 

Helen Goss: 9:57 

You've actually got to offer it to them and actually this case law that says inviting them to apply is not really offering them a role. Um, so, obviously, if the offer is accepted before notice of redundancy is given, then effectively it's just a mutual variation of terms and conditions, all good off, you go. 

Helen Goss: 10:20 

But if you've already given notice, then the individual is entitled to a statutory trial period of four weeks. Yeah, um, and you know it's possible to agree other things, but from a statutory perspective it's um four weeks. But you can generally extend the trial period. If some level of training um is required for that person to actually fit into that role effectively, yeah, then, if the offer of suitable alternative employment is accepted, then there's no redundancy payment, but that's really subject to the trial period. And again, we, we, we come into that position where we might have a very difficult situation where one thinks it is a suitable alternative and the other one doesn't, and it's nearly always the employer who thinks that it is a suitable alternative and therefore if the individual doesn't take the role, there will be no liability to pay the redundancy. 

Andrew Whiteaker: 11:22 

Yes, it doesn't mean that the individual is not redundant. They are still redundant, that the obligation to receive the redundant or to pay the redundancy payment falls away. 

Helen Goss: 11:32 

Yes, exactly. So if everybody agrees it's a successful trial period, job done and their employment continues, there's no dismissal and there's no redundancy payment. Similarly, if everyone agrees that the trial period is not successful, then there is a dismissal and a statutory redundancy payment is due from the date that the original contract ended. So again, that's fairly clear. So where it gets difficult is if there is a disagreement, where they don't agree as to whether it is a suitable alternative, and it essentially comes down to the reasonableness of the refusal. So that's where it gets a bit difficult. 

Andrew Whiteaker: 12:18 

Because there's a two-stage test, isn't there? 

Helen Goss: 12:21 

There is. 

Andrew Whiteaker: 12:21 

There's an objective test and there's a subjective test. You are good Andy. Whiteaker. 

Helen Goss: 12:26 

Very good. Yeah, it is a two-stage test. So the objective test is the employment must be suitable employment in relation to that employee. So again, it's a question of fact and it's relevant to that employee, not the hypothetical employee. 

Andrew Whiteaker: 12:45 

So what sort of factors would you be looking at when you're considering whether that is a suitable role? 

Helen Goss: 12:50 

Well, I think it's what we looked at before. So location, pay, status, the terms and conditions, etc. Because if the hours worked are very, very, very important to you and then the new role has a completely different perhaps shift pattern or different location, that could be quite devastating to your, to your life. 

Andrew Whiteaker: 13:17 

So, yes, but I suppose this this is the objective part, isn't it so? Is the role objectively different to the role that you were doing before? 

Helen Goss: 13:27 

Yes, Well, some factors that have been taken into account in the case law in terms of the reasonable refusal refer to the uncertainty about the company's future. Yeah. And also the lateness of the offer of suitable alternative employment. 

Andrew Whiteaker: 13:40 

Okay, and so if you get over the test of saying, okay, well, this looks like a suitable role, then we have to consider whether it's reasonable for that individual to turn down the role, and that's where the subjectivity comes in, isn't it? 

Helen Goss: 14:03 

yes, exactly, exactly. But of course, by the time you get to this situation, you've potentially got an argument or a fight on your hands and you've got the risk that the individual is going to bring a claim in the tribunal um for unfair dismissal or, at best, um a redundancy payment yeah, yeah, absolutely, and I think you you had a case where an individual just claimed the redundancy payment. 

Andrew Whiteaker: 14:31 

Yeah, no, exactly that. Exactly that. Because actually they managed to find themselves an alternative role. Yeah, to start pretty much as soon as their um, their, their, their role that the claim emanated from came to an end. So they had no financial losses in terms of lost salary, but they did say I'm entitled to quite a large redundancy payment and I turned down this role because it was not a suitable alternative role. And the employer said yes, it is, so you're still redundant, but we're not paying you that redundancy payment. And that second test about the subjectivity, the way that I often explain it and all listeners to the podcast may benefit from some knowledge of the M4 corridor for a moment here. But the way I might describe it is to say that if you were, if everyone was, working in an office in Reading yeah um, and you had decided that you were going to close. 

Andrew Whiteaker: 15:31 

You had two offices, one in Swindon, one in Reading and you decided I'm going to close the one in Reading and we're going to ask everyone to go and work in Swindon instead okay, you now have two employees who both work in the Reading office. 

Andrew Whiteaker: 15:45 

Exactly the same jobs are being created in Swindon. Remember. Exactly the same jobs, but in Swindon rather than Reading. One of the individuals who's affected by this lives in Newbury. So actually to go to Swindon is pretty much no different to going to Reading. The other person who's affected by it lives in Slough. Now, it's one thing to travel to Slough to Reading, but it's another thing to travel from Slough to Swindon. So although the roles are both, they're exactly the same. They're exactly the same jobs that they were doing before. They're getting paid exactly the same amount, same responsibilities, same duties. So you might say, well to an objective, applying that first objective test, they look exactly the same. But then when we look at the subjective test and we look at the impact on the particular individuals. 

Andrew Whiteaker: 16:36 

It may potentially be unreasonable for the person in Newbury to turn it down because it makes no odds, their commute time is exactly the same. But the individual in Slough it might be reasonable for them to turn it down because it means their commute is much, much longer. So same job, same impact, same money, two different people, but for one it would be reasonable and the other it might be unreasonable. 

Helen Goss: 16:51 

yes, and we have had several cases where fairly large clients with several sites have consolidated and perhaps moved sites to one central spot and had to do great big, huge Excel sheets working out where people live and how they get to work, the availability of public transport, and then, of course, factor in caring responsibilities. 

Andrew Whiteaker: 17:26 

Absolutely. 

Helen Goss: 17:26 

Some people going home at lunchtime to look after elderly parents, etc. So all those factors have to be taken into account to decide if it's a suitable alternative. 

Andrew Whiteaker: 17:37 

Yes, they all build into the reasonableness of that individual, turning it down because of their particular circumstances. 

Helen Goss: 17:43 

Yeah, no, exactly. Um. So now I am going to look very quickly at bumping Andy, because everybody hates bumping. Do you hate bumping? 

Helen Goss: 17:53 

Everyone hates it. So what bumping is is where an employee his role is at risk of redundancy is actually um moved into an alternative role which is not at risk of redundancy, so that person's employment is saved in an alternative role, but the person whose role the other person has taken is then placed at risk of redundancy and has to go through a redundancy process. So it's usually a junior person displaced by a more senior person. So you can understand why absolutely everybody hates it and I rarely see it, do you? 

Andrew Whiteaker: 18:34 

Yeah, it is unusual, not least because if we are talking about a senior employee taking the role of a junior employee, that means they have to accept the terms and conditions that come with that junior role role, because it's not a suitable alternative role, pay cuts um, diminish responsibilities, duties, that kind of thing. So it doesn't happen very often. And also, of course, although an employer may consider it, there's no obligation upon an employer to do it. 

Helen Goss: 18:53 

No, exactly, and the case law essentially says that you're not legally obliged to bump or even necessarily to consider it, but the case law does say that a failing to consider it may make a dismissal unfair. So go figure it. I think the advice has got to be consider it, even if it's to dismiss the idea of it, which then is probably the safest route. 

Andrew Whiteaker: 19:27 

So I think that's enough on bumping. I think so too. Let's take a break for a moment and then let's have a bit of a chat about the four-day week. 

Helen Goss: 19:39 

Welcome back everyone. So, Andy, tell me, what have we got to look forward about with the four-day week? 

Andrew Whiteaker: 19:44 

Where to start with this. Pre-covid, there was quite a lot of discussion and commentary about the effectiveness or the desirability for businesses to move to working four days a week, and when we say working four days a week, we mean still paying the employees to work five days a week, but only requiring them to work four days a week. Now, at first glance, that sounds like complete madness, because you're immediately reducing the amount of hours available for the individuals to do work, and yet you're still paying them the same amount of money to do the job that you employ them to do. So how can that possibly work for an employer? Well, the answer is that there have been numerous trials all over the world that have established that in certain circumstances it does work, and I think that, bearing in mind a widespread acknowledgement that we have issues with productivity, not just in the UK but across the Western world in particular, then there needs to be a bit of creative thinking about what we can do to improve our productivity, and this is a potential way of addressing that concern, even if, like I said, it sounds counterintuitive to start with and pre-pandemic. 

Andrew Whiteaker: 21:06 

I remember us holding events and we were talking about. You know, work is a thing that you do, rather than a place that you go to, and this is all very exciting. People are thinking about working four day weeks, etc. Etc. And then, of course, the world of work has rather turned on its head, or at least the world of white collar work, office work has changed considerably as a result of the pandemic, but we've nonetheless seen some trials that have been run in the UK, and there were some trials that came to an end in 2022 so shortly after the end of the pandemic, if you like and of the 61 businesses that were involved in these trials back two years ago, 54 of them maintained it and kept the four-day week in place 18 months after the trial, and actually 51% of them made that change permanent. So they found that, notwithstanding the fact that their employees were being required to be in work or to be online less than was previously the case, they found that actually there was an increase in productivity. 

Helen Goss: 22:17 

Okay. So the burning question, as far as I can see, is were those employees still working their same contractual hours? 

Andrew Whiteaker: 22:24 

So no. 

Helen Goss: 22:25 

They weren't. 

Andrew Whiteaker: 22:25 

So this was not a question of compressing the hours. This wasn't a case of saying okay, you have to work 40 hours in a week and you're now going to do them over four days rather than five days. You still do exactly the same hours Monday to Thursday as you were doing before. You just don't work on the Friday and, as I said, that sounds completely counterintuitive how can it possibly be the case that you can be more productive working less? 

Andrew Whiteaker: 22:54 

And yeah, this will be anecdotal, of course, but anyone who's spent time in an office will know that you spend some time chatting to your colleagues and getting a cup of coffee or running something off on the photocopier before we all went paperless. There are ways in which time slips through your fingers in any given working day, and the thought process behind the four-day week to some extent is well, we have all of those things that distract us at work. We also have things in life that we need to sort out as well, and that impinges either upon our working time, or it means that we're thinking about it because we're processing oh, I've got to remember to call the doctors, or I've got to get my shopping, or whatever it might be. If you say well, actually we're going to give you an extra day to do all of that, but it means that over the four days, you need to be super focused on the work that you're doing and there is only work that you are thinking about. 

Andrew Whiteaker: 23:47 

Yeah, and we still require you to do exactly the same work. So it's not the work levels have reduced. You still need to do exactly the same work as you did before. You just need to manage your time better. These businesses that have engaged in the trial yeah well, I gave you the stats earlier. You know 50 of them made the change permanent interesting now, of course, the businesses that participated would be to some extent, slightly self-selecting, because they were interested. 

Andrew Whiteaker: 24:14 

They were interested in doing it to start with, and also the sectors that instigated this as well. Some businesses in some industries will be better suited to be able to do this work than others, but nonetheless, despite the initial misgivings about how can this possibly benefit productivity, there is some data that suggests that, at least for the businesses that took part in the trial, it did work. Now, why are we talking about this now? Because this happened two years ago. 

Helen Goss: 24:44 

Why are we talking about it now? This is old news. This is madness. 

Andrew Whiteaker: 24:47 

Well, the reason that I'm mentioning it is because of the general election results and we're now living under a labour government and the conservative government that preceded it, um was um trying to choose my words hostile or sceptical about the benefits of the uh four-day working week. Um, even to the extent of um a south Cambridgeshire council who had instituted this trial, receiving letters from ministers saying essentially stop and cease and desist, and even there being suggestions that funding might be cut if they continued with the trial that they had engaged, whereas there are senior members of the new administration who have spoken positively about the potential benefits of working four days a week rather than five. And there is also a new trial which is being instigated. That was reported on a week or so ago an organization called time wise. They're looking to instigate another six-month trial. They're inviting businesses to contact them to become involved in this trial, to commence from uh the 4th of November this year. 

Andrew Whiteaker: 25:58 

So it's I suspect there will be plenty of businesses that will be looking to um take the opportunity to try it and to see what happens and, as I said, we now have a, a government that is more open to the potential benefits of shifting to for some businesses, shifting to a four-day working week. Now again, it seems to some extent a degree of heresy. This isn't how we do it. We work five days a week, but I would say, remember that going back to Victorian times, we actually worked a six-day week. So just because something is as it is now doesn't mean it's always been that way and doesn't mean that it should always stay that way. 

Andrew Whiteaker: 26:41 

I've got to say I'm yet to be convinced of the benefits of it um, you know, you and I have lots of conversations about productivity and about how our firm can operate to its best and most profitable extent. And I'm not necessarily convinced that a four-day week is the way forward, but there are clearly lots of businesses out there who've either tried it and found that it does work for them, or at very least are interested in giving it a go. 

Helen Goss: 27:09 

I'd love to see what types of businesses those are, because I'm just thinking about businesses that have a large blue collar workforce where those workers have to come into the factory, the office and, for example, leisure and hospitality sector, so the waitresses and the housekeepers, they have to be on site and they have to work their set hours. 

Helen Goss: 27:37 

And what I'm seeing is that the corporate office, so the white collar element of the workforce, are similarly being required to come into work almost as an act of solidarity with the workers, the large percentage of workers who actually have to turn up and don't have that option of working from home. So I would just worry that in a business like that it would create almost a double layer and resentment that some people can work a four-day week and get paid for five, whereas I'm on the production line and I still have to work five days and only get paid for five days yeah, and there are also loads of complications around what you do with people who work part-time already and what you do with their pay and what you do with benefits. 

Andrew Whiteaker: 28:26 

So it is quite a complicated area, I think. 

Andrew Whiteaker: 28:28 

To sort of conclude this, I think just to make the point that we are in a period of considerable flux in respect of what the working week or what working practices look like. Yes, everything was. You know we were already heading in a direction of looking at alternative working patterns, pre-pandemic, and then the pandemic has stirred that pot even more. So you, we know we live in an environment of productivity not being as high as we would like it to be, and I think this is one of many ideas that will come out as to how businesses can potentially become more productive and get the best and the most out of their employees. Just on that data point, Cambridge here, when they did run the trial, they found, of their 24 activities, if you like that, that were affected by this trial, they found 11 of those activities became more efficient and more productive. 11 of them, there was essentially no change in their service provision and there was only two where they saw a diminution in service provision so interesting interesting stuff. 

Helen Goss: 29:37 

Well, I think this is one Andy that at the end of I think you said there's a six-month trial about to start it starts in November. Sorry, it starts in November, so at the end of that, this time next year, I think it'd be really interesting to see what the results of that are and perhaps have a look at the types of businesses who've reported back. 

Andrew Whiteaker: 29:55 

And potentially also go back to the original businesses that took part in the first trial back in 2022. 

Helen Goss: 30:01 

And see how that's going. 

Andrew Whiteaker: 30:02 

See how that's going, because it's one thing to make a trial work over a short period of time, but whether that continues into the future is another matter. Yeah, no, absolutely Okay. Well, I think that probably wraps us up for today. I think it does, thank you. So all that remains is to thank you all for listening to the Employment Law Pod. If you are interested in checking out more of our episodes in this series, then do go to the Boyes Turner website, and you can also follow or subscribe wherever you listen to your podcasts. 

Helen Goss: 30:29 

Thanks everyone. 

Andrew Whiteaker: 30:30 

Bye-bye.