Is this a generous holiday offer from the company?

[workingbalance]

I'm a director of a small company - 25 people. We have a 4-day working week - so 100% work / 80% of your time / 100% salary - it works for us as we are not front facing and have become more effective using digital technology and more concise in our working styles - everyone loves it (although I do work the extra day - as it is a quiet day to get my work done!). We have been doing this for two years.

For reference (although not quite of relevance to the question) - they can also work from home one day a week and apply for two weeks of the year to work remotely (some have worked from France for example). We also offer flexible time - so they can start need early/finish early or late etc up to an hour with no need for permission - and we also are generous in supporting us they we have family pressures - children and/or parents. It is 9 - 5pm with TOIL for any overtime. We work in an industry that delivers joy to people - so a lovely thing to be part of. We also provide good quality tea and coffee with biscuits freely available, provide a breakfast out once a month, and provide loads of things for free through partnerships.

However some of the team recently have complained that the holiday allowance shouldn't be pro rata for the 4 - days (it works out 4 days less a year than if it was a 5 day week - as we do work 5 days for a period when we are super busy this is obviously not pro rata) plus an extra 41 days off. We have low staff turn over and everyone is positive in their appraisals but this has thrown me somewhat as I feel it is fair, what is recommended by the 4-day working week guides and no one has complained before. It seems to stem from a couple of new people recently who have pointed out that their contract says - "You are entitled to 20 days’ holiday during each holiday year or the pro-rata equivalent if you work part-time. In addition, you are entitled to take the usual public holidays in England and Wales. The 4-day working week takes place from the 1st January until mid May, when you then return to a 5-day working week until end July. Then - 4 days for the remainder of the year"

They now feel that this is not correct as in they should get the full allowance plus the 5th day off - this came from the person who is leading on it - "I know some staff are really questioning this and want to seek time off in lieu or financial compensation for the leave they believe they haven’t had these last two years."

I am meeting the team next week but it has made me feel upset and a bit confused that they are challenging this when I feel the contract is quite clear (we verbally have discussed it in staff appraisals and how it is broken down is written on the holiday request sheet) and of course how I feel with regard to what we do to support them and provide autonomy over their working conditions.

I am happy to get a different perspective on it from other employees as I don't want my emotions not allowing me to see clearly and of course as a company director you have a certain perspective - but I feel it is fair and generous and frankly it is taking up to much of my time and energy!

I know its just a minority of staff but I'd be inclined to tell them all in the meeting that due to some complaints about the current system, you'll be reverting to a 5 day week (A/L to be enhanced accordingly, other flexibilities will remain)

That'll learn them.

** I know you can't do this, I'm just frustrated people can be short sighted.

The ops company has been unbelievably generous by going down to 4 day weeks and still paying for the 5th day that’s not being worked.

I couldn't see if it was compressed hours or a true 89% week. Then all she needs to say is 1 day allocated leave is being given for 41 weeks of the year. That way they can't argue. You are allowed to allocate leave if needed. OP you are being way too generous here. I can't believe they are arguing with you!

Putting aside the brass neck of asking for extra leave when already working 4 days, if they work 5 days over the summer you could pro rata the extra leave due for those weeks and add the the allowance. It would be a day or two max presumably

I guess the issue is that those who want a couple of weeks off over a 5 day week period are using more of their leave than those who take it during the 4 day week period.

The statutory amount is by definition not generous though. And that's what the OP asked.
Is this reasonable yes. Is it generous no.

I have never understood this 100% pay for 4 days work thing.
You aren't being paid 5 days pay....because there is no standard pay. Different companies doing similar things pay different amounts and offer other packages/benefits.
You are being paid the going rate to deliver a service/specified amount of work which it turns out can be done in 4days.
At the moment....while it's still new in those companies that do it...it may seem that people are being paid same as similar 5 day roles in other companies.
Eventually a competitor who can produce more because they work 5 days they will be able to afford to pay more money Which may then attract people who are money focused.
A 4 day week company will continue to recruit those who want a 4 day week, at the cost of a slightly lower salary.

As we have seen here the people who were given a 4 days originally are happy because they really feel like they are being paid the same for fewer days. Newer recruits don't see that. They see they are being paid for 4 days and could earn more working 5 days.

There are always trade offs.

Yep those extras aren't important in the context - although in fairness one working parent - uses that flexible working to stay with her family who look after her son so she doesn't use up holidays. Works for her.

Yes they can bank those extra days together and take longer over school holidays etc.

Not compressed = just 4 days work for 5 days pay

Yes I do see the there are downfalls in it - we did consult with the team for 4 months before going with this option - looking at different versions / outcomes. Our advantage is that we are in a niche field - without specific competitors but with fluctuating levels of work through the year (which is when we go back to 5 days). What we did do to get the work done in 4 days was fully embrace digital platforms to streamline and more importantly automate much of the work, alongside running strictly to timed meetings (as they could drag on previously) and do nearly all of our external meetings online for example. We grew over 20% last year and on projection for the same this year - so it is working for us. But yes maybe I could have just given them 6 weeks holiday a year instead - I can ask!

https://www.gov.uk/holiday-entitlement-rights

There is also a calculator to add up holiday in hours

Yes
Understand your point, but this is different as they work 5 days for a portion of the year but get the same full 5 days pay when they just work 4. It’s not that they only ever work 4 days

Offer them the longer holiday if they want to switch back to five days a week.
then you'll be overstaffed.
work out who the shit stirrers are
consider whether you need to make redundancies.

Get rid of the trouble makers in a discrete way.

I had staff who argued about things like this and tried to make me feel bad and they ended up leaving and it was the best thing ever. Now we have a team who is amazing and appreciates us as much as we appreciate them.

The problem when you're a small company is you offer loads of benefits to compete with the big names and then when you advertise that, you end up with a lot of people who apply just for the advantages and just take, take, take.

We started downplaying our benefits in our hiring process and focused 100% on the role itself and ended up with much better people.

If you gave them the holiday they'd ask for a pay rise. If you have them a pay rise they'd ask for a kidney.

Cut your losses.

No I think it's right and fair that they have 4 days equivalent holiday. They aren't doing longer hours days are they? If they are doing 28 hrs a week they are chancing their luck.

It sounds a great place to work but it also sounds to me like a "flexible" arrangment that is a bit woolly and folks are interpreting it to suit themselves??

To me it reads that I'm employed on a full-time basis, on a full-time salary - so I'd expect full-time annual leave leave allowance (whatever the numbers). But that for certain periods of the year, the employer is telling me I don't need to be in the office for e.g. the Friday. (Employer discretion telling me not to come in being different from me only contracted for a 80% role or me taking leave / flexi-time on the Friday.)

I wouldn't consider that to be a reduction in my contracted hours thus a reduction in AL. But I can see from the quote from the contracts that you explain (I think) that there would be pro-rate reduction in AL.

How do you see that Friday in the 4-day periods - is it a day either of us expects I could potentially have to work (and is part of my 100% salary so no overtime), or is it genuinely a non-working day for me.

The more i think about this, the more this niggles at me. I think you need to make sure the wording in your contract is absolutely spot on as otherwise you risk being in breach of the legislation relating to holidays (which could have an impact on minimum wage unless it is an industry which pays well above that for all roles, as it may be) and it not working out as you expected in other ways. For example, does someone going on maternity leave for the year accrue 16 days' holiday or 65 days' holiday? That's quite a difference! What about those who take a period of sick leave?

Yes I agree - the contract needs to be water tight to reflect what we offer etc and how it works in a variety of situations. Everyone is above minimum wage etc so no concerns about that - but yes we need to tighten it up.

Well it has worked well for just on two years - but yes we need to tighten it all up now it seems. The 5th day is a genuine non-working day - always respected or if they do (such as event work) it is taken as TOIL.

We were guided by 4-day working week principles which outlined applying AL like this, but I can see both sides.

Yes I am seeing that it is the newer people who are complaining - while the older team members are amazing and super happy with the situation.

Trying not to take it to heart when sentences like - " we will be seeking compensation" are being mentioned - rather than in the collaborate spirit that we have always worked (10 years +)

Is it a case of your long term employees have had/realise the benefit of 100% pay for a 4-day week for 41 weeks of the year and are happy to work the remaining 11 weeks as 5-days because they used to do all 5-day weeks for the same pay. Whereas your new hires see it as a 4-day week contract for the pay AND you make them work 11 weeks of 5-days for no more money. I know this was not your intention and your working conditions sound almost perfect.

I am not sure the advice to say return to 5-day working is sensible as some will see it as an opportunity to ask for a salary increase as they will be working more hours.

Getting HR advice is good idea and something I would not have been without when I was a company director.

Yes - the long term employees realised that effectively it was a pay increase due to reduced hours (although that was not the intention for implementing it) - however they have also had an above inflation pay increase recently so they are happy. Maybe the new hires see it differently - although one is paid very well and more than the job she moved from that was 5 days a week year round.

I don't want to go back to 5- days (as I mentioned - I still work that day - so little impact on me) but the team are well rested and energetic working only 4-days - and it works well in the quieter time of year.

Yes I agree - I run everything past HR!

My OH works a company that does this, he also gets the full 28 day holiday allowance. It’s a ridiculous amount of holiday. He struggles to use it. He takes an extra day off every week if the school holidays ( so only works 3 day week 13 weeks a year)
if you adopted this model you’d never have staff working!

And I am sure no one is hanging on for an update but...
5 weeks on - one of the team who was stirring things up has resigned and left - I updated his roles and responsibilities and he then decided that it wasn't for him.
And the main person (who was directly under me and has been the main instigator in all the unrest) leaves tomorrow - on gardening leave for the remainder of her time.
It has been truly challenging - put it this way, one senior member of staff when I updated her today said - that only 2 weeks ago she questioned the other employee, asking if she was actually planning on a coup of the business as her actions were indicating that!
For all those that reminded me that sometimes people just don't fit the company culture (not convinced what culture that they really do fit!) it is true!
I am still slightly stunned that people behave like this - but onwards and upwards and already we feel more like a cohesive and supportive team - like we always were.
Thanks for all the support when I needed it.

It good when problems take themselves off to pastures new. Hope things settle down now OP.

Well I'm delighted to read your update.

If your are south of the country, I'm not a stirrer and would love to work for you.

Omg! Sounds fab when can i start?? Not even kidding!