4-day work week proposal: A win for flexibility, or employer cheat code?

The popularity of the four-day work week is spreading throughout Australian organisations, with a recent proposal to the Fair Work Commission (FWC) raising eyebrows over the true nature of this adoption.

The Australian Retailers Association (ARA) recently proposed an update to the General Retail Industry Award (GRIA) through the FWC that would offer workers the option to work a four-day work week. Under the proposal, workers who opt for the four-day work week would have their 38 hours condensed into just four days – while allowing split shifts.

According to the ARA, this would provide working parents with greater flexibility for activities such as school pick-up and drop-off. The proposals are part of a wider initiative by the ARA to “simplify” and modernise the GRIA.

“This choice and flexibility align with the shift towards more flexible ways of working, which is in the best interests of workers and their employers,” said ARA chief industry affairs officer Fleur Brown.

“Our proposal addresses areas where the GRIA is out of step with the needs of a modern retail workforce and where there are obvious, counter-productive barriers to mutually agreed flexible work arrangements. ”

This proposal by the ARA was quickly called into question by unions and workplace experts. As reported by the SMH, Chris Wright, professor at Sydney University’s business school, raised concerns over what would happen to penalty rates for workers who take part in these longer days.

“This is a misrepresentation of the four-day work week. If workers are having to work nine or 10 hours a day under the change, employers wouldn’t have to pay them overtime, then that’s a potentially significant change for those employees,” said Wright.

The ARA, however, have claimed that their proposal does not include the stripping of penalty rates for workers.

“There is no proposal to remove penalty rates, overtime or paid breaks from the award. What the ARA has proposed is that managers can opt into a pay increase if they select the voluntary salary absorption option. This will only apply to employees that agree to it.”

“Similarly, our proposal has never suggested removing breaks from the award. We are simply proposing that any employees who prefer to take an early mark can opt into that.” 

HR Leader reached out to Professor Greg Bamber of Monash University Business School and co-author of International and Comparative Employment Relations: Global Crises and Institutional Responses, about the proposed changes to the GRIA and what they may mean for employees going forward.

“The Australian Retailers Association (ARA), which, in 2025, wants to introduce 10-hour workdays with four-day work weeks for employees, probably because it assumes that 4x10-hours would suit many typical shop/store trading hours than 5x8-hour shifts,” Bamber said.

“The ARA is seeking greater flexibility so that 38 ordinary hours could be worked across four days. The proposal requires employers to record all hours worked and compensate employees (by additional payments or time off in lieu) for any time beyond an average of 43 hours per week over a six-month period or the pro-rata equivalent. And that the finishing time for ordinary hours on all days of the week will be 11.00 pm.”

Bamber broke down the proposal further, referring to the ARA’s push to “modernise” the GRIA.

“[The ARA] says that this would reflect modern work practices and provide flexibility for employees (and, of course, for employers). The ARA argues that such arrangements are already included in some other industrial-relations awards and would allow for flexible work practices. The ARA is also seeking to introduce into the retail award ‘split-shift’ arrangements, but only with employee agreement.

“This is all part of the ARA’s push to modernise and reduce the complexity of awards, which would reduce the administrative burden on employers. The ARA also seeks to minimise costs for employers. Employers’ peak bodies and retail chains, including Woolworths, Bunnings and Coles, support the push.”

In terms of the prominent voices who are against this proposal, Bamber explained that the federal government is strongly opposing the changes – fearing that it opens low-paid workers to various risks.

“The federal government opposes the ARA’s push to change the award for workers on as little as $53,680 a year, saying it would go against the intent of the ‘awards review’ and leave low- paid workers to be ‘picked off’ individually by their bosses,” he said.

“Senator [Murray] Watt, the workplace relations minister, opposes the ARA’s award application, which also seeks to introduce ‘salaries absorption for managerial and higher-level staff’ and enable workers to waive meal and ‘smoko’ breaks.”

“He is critical of proposed ‘trade-off’ measures, which would allow retail workers at level 4 (currently on a base hourly rate of $27.17 an hour, or $53,680 a year) to level 8 (on a base hourly rate of $31.36, or $61,958 a year) to give up core award conditions and move to an annualised salary of at least 25 per cent above the base rate.”

“He says agreeing to the ‘exemption rate’ could remove award entitlements such as overtime, penalty rates, annual leave loading, and some allowances and rostering arrangements.”

Along with the federal government, Bamber touched on how the Australian Council of Trade Unions (ACTU) have strongly fought against this proposal, with the union fearing that the proposal risks “hurting some of Australia’s lowest-paid workers” and would provide a precedent “to push for lower wages in other industries”.

Bamber claimed that the implications of workers being on their feet for four 10-hour shifts a week would need to be “carefully considered”.

“Whilst four-day work weeks may reduce the regular overtime after a shift, it would create an opportunity for an overtime shift on employees’ days off and provide more flexibility for employers with absentee coverage,” he said.

“However, the OHS implications would need to be carefully considered with most retail work requiring being on your feet standing and walking for most of the time, which is demanding for eight hours, let alone 10 hours on a continuous four-day week basis.”