The Modi government is all set to bring in a wave of change to the labour policy with four new labour codes. Three of these labour code bills were passed in the Parliament session in September 2020: the Industrial Relations Code, the Social Security Code, and the Occupational Safety, Health and Working Conditions Code, while the fourth Wage Code Bill was passed the previous year. The recent proposal in the labour code is to adopt a 4-day work week in India.
According to The Union Ministry of Labour and Employment, the new labour codes will give companies the flexibility to have a four-day working week instead of five or six. However, the working hours limit of 48 hours for a week will remain.
This implies that the number of working hours per day will increase as the working days reduce. For instance, to meet the requirement of 48 hours per week in a 4-day work week in India, employees will have daily shifts of 12 hours.
When Can We Expect The 4-Day Work Week In India To Roll Out?
The Ministry of Labour and Employment is working on finalizing the rules for all four labour codes. Such a provision will give companies the flexibility to reduce the number of working days to four without prior government nod. Nonetheless, it is vital to clarify that reducing the number of working days does not mean a reduction in paid holidays.
Therefore, if a company enacts this labour code, it would provide employees with three paid holidays.
The changes also include free medical check-ups for workers through the Employees State Insurance Corporation.
Will Companies Implement a 4 Day Work Week?
The discussion around the shift to a four-day working week has some different angles and potential beneficiaries. First, it is expected to improve the life of employees by reducing fatigue, burnout, and stress. On the other hand, when it comes to employers, there is anecdotal evidence from companies that have experimented with the shorter week, suggesting an increase in employee productivity levels and engagement.
It may, however, not be feasible for some industries to take a day out of the working week. For example, large manufacturing and real estate firms will not be able to do so. During the process of manufacturing, it is not possible to keep the factory shut for an entire day. Some machines need to run throughout the day, and with 12-hour workdays and three holidays, the work structure is not sustainable.
Conversely, employees and companies having structured work routines with defined work output can try to implement the new law. This includes tax experts, internal researchers, white-collar corporate offices and certain junior-level professionals in ITs and ITeS.
The Experience So Far
The topic of a four-day workweek started in Germany in 2020 when the largest trade union of the country – IG Metall, demanded a four-day week. This demand was made when Germany already requires 34.2 working hours in a week, one of the lowest.
Microsoft also experimented with the concept in 2019 in its Japan office. It was observed that productivity jumped by 40 per cent. Employees enjoyed the perfect work-life balance and felt rejuvenated to return to work. Moreover, apart from the employees, it contributed to company savings with the number of pages printed going down and electricity consumption also reducing significantly.
Perpetual Guardian, a New Zealand based company, also conducted a trial study for the 4-day workweek. It concluded that employees were able to deliver the same output, and yet have better teamwork, work-life balance, job satisfaction, and company loyalty. The stress levels for employees also decreased from 45% to 38%.
The most productive countries of the world, like Germany, the Netherlands, Denmark, and Norway, on average work for about 27 hours a week.
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What are the Benefits of a 4 Day Work Week in India?
While the concept is relatively new in India, it has been prevalent in certain international companies and countries. The idea brought about largely due to recent advancements in technology has delivered promising results for both employees and employers:
1. Increased Productivity
Studies indicate that there is a correlation between the number of working hours and productivity. Overworked employees deliver poor productivity levels as compared to employees working a normal working week.
2. Better Employee Engagement
A 4-day workweek can encourage employees to be more committed and lead healthier and happier lives. Since the stress is expected to reduce, employees may not take as many sick leaves as before.
Consequently, they are recharged to return to work and excel at new challenges.
3. A Smaller Carbon Footprint
As the workweek reduces from five to four days, the carbon footprint will also reduce. Shortening the working week means that employees don’t need to travel, and large commercial buildings are also shut for three days of the week. This results in environmental benefit as well.
Are There Any Disadvantages to a 4-Day Work Week in India?
Like every new development, a 4-day work week has both advantages and disadvantages. Introducing a four-day work-week system can be cumbersome as it requires adequate technology, support, and workplace culture. It is unavoidable to encounter the challenges and disadvantages that come with new changes.
1. Customer Satisfaction
With offices closed on Fridays, it would get challenging for customers to access customer support services. This implies that before following the four-day work week, companies must develop a robust customer support system using technology, like AI-powered websites and chatbots. Customers must have another avenue of support that reduces the dependency on office-based staff members.
2. Female Workforce Participation
A few industry experts believe that the implementation of a 12-hour working day can reduce the number of working women. According to data from the International Labour Organization, India’s female workforce participation rate stood at 20.33 per cent in 2020.
If companies increase the number of working hours to 12 per day, it will dissuade women from joining the workforce.
3. Wrong Approach
Many employers and employees confuse the concept with the same amount of working hours as 8-hours per day. However, employees need to work for 48 hours spread across four days. This can have an impact on productivity levels, impact employees’ engagement, and deteriorate work-life balance and overall happiness. If employers wish to achieve the desired effects of a 4-day work week, it should provide utilize strategies to motivate employees and keep them going under high-pressure circumstances.
The debate on the 5-day workweek versus 4-day work week in India is not new. Government officials have been in conversation with companies regarding the pros and cons of extending the work hours and keeping business operations shut for 72 hours every week.
Depending on the recommendations received from the stakeholders, the government will soon release the rules for the new law. We expect the implementation of the new labour code from April 1, 2021.