In December 2022, the Four-Day Work Week Act, otherwise known as Bill 55, passed its first reading. The preamble of the Four-Day Work Week Act sets out the rationale for the Act, stating that:
“The COVID-19 pandemic resulted in increased worker burnout, leading to poor physical and mental health outcomes. The pandemic has also highlighted the need for greater work-life balance, including more time for family and for rest.”
The Four-Day Work Week Act is intended to help the Ontario government understand the benefits as well as potential drawbacks of “broadly implementing” a four-day work week in Ontario.
Before it becomes law, the Four-Day Work Week Act must still pass a second reading, third reading, and receive royal assent. The second and third readings are not yet scheduled.
What is a four-day work week?
The legal issues from implementing a four-day work week largely stem from the type of four-day workweek implemented.
A genuine four-day work week adheres to the principle that employees receive their full compensation for 80% of their time while maintaining 100% productivity, encapsulated in the 100-80-100 rule. In this model, employees work a 32-hour week instead of the traditional 40-hour week, yet still receive their complete salary and benefits, provided there is no reduction in productivity due to the shortened hours. This contrasts with a standard four-day work week, where employees complete the same weekly hours but over four days instead of five. In this case, a compressed schedule involves working four 10-hour days.
Compressed work weeks are more prevalent in scenarios where reduced working hours significantly impact productivity, making it impractical for employers to maintain full compensation for 80% productivity. Another variation of the four-day work week involves employees working fewer hours, experiencing reduced productivity, and receiving compensation accordingly.
Could implementing a four-day work week engender a constructive dismissal claim?
An employee transitioning to a four-day work week might argue that this change constitutes a constructive dismissal by the employer, granting them the right to seek damages for termination, even in the absence of a pay reduction. The critical consideration is whether the observed alterations, when assessed objectively, represent a fundamental shift in the terms and conditions of employment.
To learn more about constructive dismissal, please visit Constructive Dismissal Ontario.
Overtime, lunch breaks, and working week considerations
In Ontario, the Employment Standards Act (“ESA”) is sufficiently expansive to accommodate a transition to a four-day work week, with each day lasting 10 hours, without violating the maximum daily working hours for employees. Employers are already permitted to establish a standard workday exceeding 8 hours, as long as it adheres to a weekly maximum of 48 hours.
It is crucial for employers to ensure the provision of adequate breaks and consistently evaluate any potential risks associated with an extended workday, including considerations of health and safety. Notably, the implementation of a four-day work week would not impact overtime pay, as there is no daily overtime limit in place. Overtime compensation becomes relevant only when employees exceed 44 hours of work per week.
When transitioning to a four-day work week with each day lasting 10 hours, Employers will need to be mindful of the requirements to give workers adequate meal breaks in compliance with the ESA.
It is worth noting the definition of “work week” in the ESA suggests that the four-day work week would leave all the requirements that are computed in weeks unchanged. An employer would not be able to claim that the 5th day is a vacation day.
To learn more about overtime, please visit Overtime Pay Ontario: Know Your Rights.
To learn more about meal breaks, please visit Ontario Meal Breaks.
Potential human rights issues
The introduction of a four-day work week could potentially raise human rights concerns. Specifically, an employer mandating a four-day schedule with 10-hour workdays might face challenges regarding potential discrimination.
Employees may argue that, for physical or mental health reasons, they are medically incapable of working extended shifts. This could lead to claims for special accommodation based on their circumstances, whether due to a disability or their status as a parent.
In all instances, it is crucial for employers to actively consider claims from employees asserting their inability to adhere to a four-day work week. The employer must thoroughly assess and accommodate the employee’s needs, up to the point of undue hardship.
To learn more about the duty to accommodate, please visit Disability Related Absenteeism – Your Employer Has a Duty To Accommodate You.
Benefits plans
The adoption of a four-day workweek may have repercussions for employer-sponsored benefits plans. This shift could inadvertently alter employee coverage and potentially affect the extent of benefits offered. Numerous third-party benefits providers determine eligibility for coverage based on specific schedules, often defined as either ‘full-time’ or requiring a minimum number of hours per week, traditionally set at 40 hours. It becomes crucial for employers to scrutinize the revised employee schedule and payment structures to evaluate potential impacts on coverage.
A related concern involves employers providing short-term disability benefits, often linked to payments (typically a percentage of wages) based on the employee’s ‘regular’ workday. Relevant plan provisions will need thorough examination and potential adjustment to align benefits coverage with the actual arrangements envisioned by the four-day work week.
Key takeaways for employers
The process of shifting employees to a four-day workweek is more than just granting an additional day off. Employers must thoroughly assess various legal considerations, such as determining if there is a contractual and legal basis to implement the change and potentially revert it in the future. Unforeseen implications related to existing employer policies should also be taken into account. Some employees may have valid reasons to request opting out of the altered schedule, especially if their circumstances fall under grounds protected by relevant human rights legislation. The recommended approach is to evaluate the implications across a spectrum of human resources and legal issues before moving forward.
This article was written by Thomas Perry and was originally published in Law 360 Canada on December 8, 2023. Tom is licensed by the Law Society of Ontario and is an Employment Lawyer at Monkhouse Law.
Monkhouse Law is an employment law firm located in Toronto focusing on workers’ issues. Give us a call at 416-907-9249 or fill out this quick form. We offer a free 30-minute phone consultation.
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