I’m unsure of your industry but as Anna said having a heart led conversation about what they really mean is crucial.
For example, are they saying that they can’t work their rostered shifts but could do the hours at other times? If so then it would be about seeing whether they are able to swap shifts.
If they are actually unable to work the contracted 10 hours at all then you would then need to understand whether they are resigning from their position (in which case the 4 weeks notice applies, but this is something you could negotiate between eachother).
If the employee would like to vary their terms of employment with you (for example they say I can’t do 10 but I could do 5) then that is for you to consider whether you accept (and vary their contract), or not. If you accept the variation then a variation of terms of employment short letter should suffice, keeping all other terms the same other than their hours.
It is important that you ASK the employee what their intention is, rather than TELL them what they are doing.
I’m unsure what that would mean for the wage subsidy that you have received for the employee in terms of what you do with that if they cease their employment with you but this is also something to look in to.