New Labour Laws in India and the Dawn of a 4-Day Work Week

Impact on Productivity and Employee Happiness

 

India is on the cusp of a significant transformation in its labour landscape with the impending implementation of new labour codes. These codes, amalgamating 29 existing central labour laws into four comprehensive codes on Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions (OSH), are anticipated to be rolled out in phases, starting from 2025. One of the most talked-about provisions under these new codes is the enabling of a four-day work week.

 

This new framework offers companies the flexibility to adopt a four-day work schedule, provided the weekly working hours limit of 48 hours is maintained. This would translate into 12-hour workdays for employees opting for this model, allowing for a three-day weekend. It's crucial to note that this is not a mandatory imposition but rather an option for companies, and its implementation will also depend on the rules framed by individual state governments and may require employee consent for extended daily work hours.

 

The phased rollout is expected to begin with certain sectors, potentially including the IT and tech industries, as early as July 2025, with other sectors following suit.

 

Potential Impact on Employee Productivity

 

The shift to a four-day work week, while maintaining the same number of weekly working hours, presents a mixed bag of potential impacts on employee productivity:

 

Increased Focus and Efficiency: Proponents argue that a compressed work week could lead to increased focus and efficiency during working days. Knowing they have a longer weekend, employees might be more motivated to complete tasks within the stipulated four days.

 

Improved Work-Life Balance and Reduced Burnout: A three-day weekend can significantly enhance work-life balance, providing employees more time for personal pursuits, rest, and rejuvenation. This, in turn, could lead to reduced stress and burnout, positively impacting long-term productivity and creativity.

 

Attraction and Retention of Talent: Offering a four-day work week can be a significant perk, making companies more attractive to prospective employees and aiding in retaining existing talent, especially among the younger workforce that prioritizes flexible work arrangements.

 

Potential for Fatigue: Conversely, 12-hour workdays could lead to increased fatigue and potential health concerns for some employees, possibly negating productivity gains if not managed well. The nature of work and individual capacities will play a crucial role here.

 

Operational Challenges: For certain industries requiring continuous operations or extensive client interaction, implementing a four-day week might pose operational challenges and require meticulous planning and rostering.

 

Shift in Mindset: Success will also depend on a cultural shift from valuing hours logged to focusing on output and results.

 

Global studies and pilot programs on the four-day work week have shown varied but often positive results, with many companies reporting maintained or even increased productivity alongside significant improvements in employee well-being. However, the direct applicability of these findings to the Indian context will need to be observed as companies begin to adopt the model.

 

Upshot Brand Media: An Example of Employee Happiness and Productivity Initiatives

 

Upshot Brand Media is an example of a company already following a five-day work week to ensure employee happiness and productivity, with a hybrid work model already in place. The switch-over to compression into four-day work will be easier to implement (if mandated by the state). The principle that companies like Upshot Brand Media are already exploring innovative work arrangements like a four-day week to boost employee morale and productivity is gaining traction. Several companies in India, particularly in the IT and startup sectors, have reportedly been experimenting with more flexible work models even before the new labour codes are fully enacted. 

 

The general sentiment from companies globally that have trialed or adopted a four-day work week often points to:
Enhanced Employee Happiness and Well-being: Longer weekends contribute to better mental and physical health.
Reduced Stress Levels: More time for personal life helps in de-stressing and rejuvenation.
Increased Employee Loyalty and Engagement: Employees often feel more valued and respected.

 

As India moves towards formalizing the option of a four-day work week through its new labour codes, it will be a significant development to watch. The impact on productivity and employee happiness will likely vary across industries and depend heavily on how individual organizations implement and manage this new way of working, keeping employee well-being at the forefront.