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Return of the 3 day week?

As Britain officially enters recession, in a move to reduce the number of people being made redundant and keep the unemployment figure below two million government ministers are debating on whether to compensate those companies who cut working hours.

A number of large firms, including JCB and Bentley Motors have already cut the working week to four days, with the aim being to reduce costs. However, according to the Independent on Sunday it is estimated that 40,000 companies across the country are planning to reduce hours this year.

The last time such measures were taken was under the Thatcher government in the 1980s, when a short-time directive was introduced, designed to cover earnings lost through shorter hours. Previous to this was in the 1970s when due to Industrial Action; the then Prime Minister Edward Heath imposed a three day week.

The move would cost the government millions in compensation payments, however would be cheaper than the unemployment benefit claims, which would be arise as a result of the job losses.

The reduction of the working week is not restricted to the car and manufacturing industries alone. It was announced last week that one of the big four professional services firm, KPMG has offered its 11,000 British staff the opportunity to work a four day week or take up to a three month sabbatical at a 30% salary. All this in an effect to minimise any job losses.

With the Chartered Institute of Personnel and Development estimating that 300,000 workers could be made redundant in Britain between January and March alone – accepting the offer of a reduced week may just keep you in employment.

If you would like advice on redundancies or any other Employment law issue please e-mail David Malamatenios or ring 020 7354 3000.

Author: David Malamatenios

Date: January 2009