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Direct speech

  1. “I worked in a bank for 3 years,” said Michael.

Reported speech

  1. Michael said that he had worked in a bank for three years.

Is had worked necessary there, or would just worked have been ok when converting (1) to reported speech in (2)

I know that standard practice is to go one step back in the past. Is doing so always necessary?

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Michael said that he worked in a bank for three years.

This sentence is fine and accurately reports what Michael said, but it does introduce some ambiguity. Was Michael saying that he has worked in a bank for the past three years (and still works there) or that he worked in a bank for three years in the past (and is no longer working there)?

Michael said that he has worked in a bank for three years.

With no doubt or ambiguity, this statement would correspond to: "I have worked in a bank for three years," said Michael.

Therefore, in order to clearly communicate Michael's intent when he says, "I worked in a bank for three years" (simple past), we need the past perfect:

Michael said that he had worked in a bank for three years.

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