Four-day week ‘thought bubble’ not on the cards, says Labor
Business groups warn it would take 26 years to generate enough productivity for a four-day week, as tensions escalate over ACTU's dramatic workplace reform push.
The ACTU push for shorter working hours, including a four-day week without any loss of pay, has been dismissed by the Albanese government as employers accused unions of promoting a “populist anti-productivity thought bubble”.
Unions will seek support at next week’s economic reform roundtable for shorter working hours including more rostered days off and increased annual leave each year where a four-day week is inappropriate.
Under the ACTU proposal, conditions – including penalty rates, overtime and minimum staffing levels – would be protected to ensure a reduced working week did not result in a loss of pay despite people working fewer hours.
Anthony Albanese said the government had “no plans” for a four-day week, and while the ACTU was entitled to put forward proposals to the summit, that did not mean they would be government policy.
He said a lot of workers would like to have a five-day working week, and workers did different hours in a range of industries.
“I wouldn’t mind a six day and 23 hour work week myself rather, than 24/7,” he said.
Jim Chalmers said the government was not working up a policy for a four-day week but was focused on implementing the industrial relations agenda it took to the election, including abolishing non-compete clauses and protecting penalty rates.
Workplace Relations Minister Amanda Rishworth said enterprise bargaining allowed productivity measures to be negotiated at an enterprise level, including a four-day working week.
Employers accused the ACTU of “trying to have their cake and eat it” by proposing to spend the dividends of productivity before they were generated.
Australian Industry Group chief executive Innes Willox said the economic roundtable attendees had been explicitly told that discussion on workplace relations was off the table, but unions were offering measures that “will turn back time, cut productivity, make Australia less attractive to much-needed investment, and lead to (fewer) jobs”.
“At the current rate of productivity growth, it would take 26 years to generate enough productivity to break even with our current situation with a universal four-day working week,” Mr Willox said.
“With this idea, based on a loaded academic survey of a trial of 10 companies and which provided, at best, mixed results, along with Victoria wanting to legislate two days working from home for every worker, it seems the union movement and parts of Australian government don’t want Australians to work at all.
“This thought bubble is exactly the opposite of what we need at a time when we face declining living standards directly linked to our poor productivity performance.
“Next week’s roundtable needs a focus on outcomes put ahead of process, certainty above complexity and deployment above dollars, not bizarre proposals which would drive our economy backwards.”
Business Council chief executive Bran Black said four-day weeks might work for some businesses, “but the unions don’t seem to get the idea that these arrangements won’t necessarily work for all businesses”.
ACTU president Michele O’Neil said shorter working hours were “good for both workers and employers”, delivering improved productivity and allowing workers to live “happier, healthier and more balanced lives”.
“Unions want all Australians to benefit from higher productivity, not just those with money and power,” Ms O’Neil said.
The ACTU is not endorsing a specific four-day week model, but did cite Swinburne University research into the trialling of the 100:80:100 model, in which workers keep 100 per cent of what they are paid for five days while working 80 per cent of their former hours provided they maintain 100 per cent productivity.
The 2023 study into 10 companies that trialled the four-day week – six small businesses and four medium-sized enterprises – found productivity was higher at seven of the firms and the same as pre-trial levels at three businesses.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said employers were not opposed to a four-day week or shorter working hours being negotiated at an enterprise level, but did not support it as a new workplace standard.
“What they’re doing is they’re coming to work with the travel brochure saying this is how I want to spend my holiday,” Mr McKellar said. “A four-day week should be negotiated at an enterprise level. Companies are trialling and looking at it.
“They should be sitting down, talking to their employees, working out what are your objectives.
“You want to get paid the same, you want to work four days a week, what are the improvements we can put into the business that means we can still get the output that we want? What are the technologies that we can adopt? What is the capital investment that we need to undertake that will help get to that point?
“If you want shorter working hours, then that’s the way to achieve it. But it’s not something you just apply as a standard across the economy. Enterprise by enterprise, we see these improvements occurring. Eventually you get to the point where it becomes the standard. But you don’t get to that point on day one.”
He said unions should be coming to the roundtable with ideas and suggestions about how to improve productivity.
“(The four-day week proposal) is about how to spend the dividends of productivity,” he said.
“You can’t spend the dividends, you can’t create the benefits without the ideas to generate productivity. Employers are perfectly up for a discussion about how productivity gains should benefit everybody, how they should benefit businesses, how they should benefit employees and how they should result in better profits for small business, how they should result in higher wages, shorter working hours, better work-life balance.
“Those are the benefits of productivity, but what they’re doing here is they’re trying to have their cake and eat it, they’re trying to spend it before they’ve created it.”
He said productivity “doesn’t just appear miraculously out of thin air, it comes from ideas”.
“It comes from investing in better plant and equipment, it comes from investing in more relevant skills for employees, it comes from adopting new technologies and processes that mean you can produce more with the same level of input or you can keep the same level of output for a lesser level of input, including working hours,” Mr McKellar said.
“This is an important illustration of the benefits of productivity, but they have got to have a strategy for productivity.
“We have said many times to the unions that if you don’t have a strategy for productivity, you don’t have a strategy for higher real wages.”
The ACTU argued Australia’s slow productivity growth was due to a lack of investment by businesses in capital, research and people, citing research by Jim Stanford from the Centre for Future Work.
It found if real wages had grown at the same rate as productivity since 2000, average wages would be around 18 per cent higher – or about $350 per week – than they are today.
“Productivity growth does not automatically translate to higher living standards. If that were the case, over the past 25 years the average worker today would be around $350 a week better off,” Ms O’Neil said.
She said workers deserved to benefit from productivity gains and technological advances, and that reducing working hours was key to lifting living standards.
“For workers in some sectors, shorter working hours can be delivered through moving to a four-day work week. For other people, this could be achieved through other ways, such as more time off or fairer rosters,” she said.
“A fair go in the age of AI should be about lifting everyone’s living standards instead of just boosting corporate profits and executive bonuses.”
Unions cited a peer-reviewed study recently published in Nature Human Behaviour which found a four-day work week boosted performance, reduced burnout and improved employee health and retention.
They also quoted Productivity Commission research that found while Australians had been working record long hours, the additional hours had not been matched by business investment.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout