Four-day work week requires caution: COSBOA

| April 4, 2023

Trials of four-day work weeks have been taking place both in Australia and overseas with many organisations reporting various successes. According to Matthew Addison, Chair of COSBOA a vigilant approach in pursuing a four-day work week for five days’ pay should be taken.

“Taking into consideration the inflationary impact of multiple types of new leave, plus a move to four-day work weeks on the economy, with no underlying tradeoff for productivity – small business has for caution before further thoughts of a move to a four-day work week,” Mr Addison said. 

“Not every business can produce 38 hours of outcome in 30 hours. For instance, when customers expect a shop to be open and it is not, the customer will shop elsewhere. So many businesses are consumer driven, not process alone. Enhanced productivity expectations do not lead to five days of customers deciding to shop in four days.

Mr Addison said enhanced productivity cannot be the only factor considered.

“Small business continues to suffer worker shortages and an inability to remain open or offer full service due to a lack of staff. The proposal to reduce hours means a further reduction in a business’ ability to earn income.

“Inflation together with worker shortages are already driving demand for higher wages. A move in some industries towards five days’ pay for four days of work, would likely see all employees seeking similar arrangements. If this concept was to proceed, we would also likely see workers who have already been paid five days for four days’ work, offering to work the fifth day, on the proviso they would then be paid overtime for the extra day.

Mr Addison said we may also see employees choosing to move away from an industry that cannot offer four-day work weeks (for five days’ pay) e.g. Hospitality or Retail, to an industry that can. This additional disruption requires careful consideration before any implementation and subsequent management.

COSBOA has for caution in pursuing a four-day work week; for an employer’s perspective and an impact assessment on small business to be brought into each recommendation of the recently released Select Committee Work and Care Final Report.

View the full Select Committee Work and Care Final Report HERE.