Effects of the Pandemic on the Hospitality and Leisure Sector

The Hospitality and Leisure sector has faced immense challenges in 2020 and 2021 because of the Covid pandemic. These challenges have been compounded with the implementation of Brexit, causing a huge resource shortage and recruitment challenge for the sector.

Hospitality and Leisure businesses are people businesses, and there has never been a more important time for employers in the sector to understand their obligations and support their people. Hopefully, these top 10 tips will provide some helpful guidance.

1. Take care when recruiting

All job applicants are protected by discrimination law and can bring Employment Tribunal claims if their application is unsuccessful. 

Therefore, you should make sure you avoid any discrimination when recruiting.

List the essential and preferred requirements for the role and then make recruitment decisions based on these. Make sure they are relevant to the role and do not suggest any discrimination, such as references to age, sex, marital status or race.

Keep careful notes of the reasons why candidates are not successful in case of challenge.

2. Comply with ‘right to work’ checks

It is a criminal offence to employ someone without the appropriate immigration status, and there are now stringent rules around the checks that must be carried out.

Employers must see employees’ original documents that prove their right to work, check they are valid (in the presence of the employee before they start their employment) and retain copies.

The rules were relaxed temporarily due to Covid-related restrictions. 

However, virtual checks were still required. Employers should check the latest requirements when they recruit.

3. Issue contracts of employment

This is a legal obligation, but it is also an opportunity to set out terms around pay, duties and hours etc., to avoid later disputes.

If written terms are not put in place at or before the start of employment, Employment Tribunals can order employers to pay an award of up to four weeks’ pay per employee.  

In addition, Employment Tribunals tend to frown upon employers who fail to comply with this basic obligation, putting you on the back foot if you are challenged about any other issue.

4. Get ‘deduction from pay’ consent

You cannot withhold or make deductions from employees’ wages unless you have signed consent from them in advance.  

The easiest way to achieve this is by including a ‘deduction from pay’ clause in your contracts of employment. Otherwise, you could be ordered to repay the monies, even if you are owed them by your employee.

5. Keep up to date on the rules around tips and gratuities

In the last three years, the Government has repeatedly promised to introduce a new law requiring employers to pass on all tips and service charges to workers and for the distribution of tips to be undertaken on a fair and transparent basis.

This law has not yet been brought into force. However, it is still expected, so employers should be aware that there is going to be more regulation over tips and gratuities.

6. Manage holidays and calculate holiday pay correctly

Usually, holiday entitlement cannot be carried over into future holiday years. However, if employees have not been able to take holidays due to the Covid pandemic, some of their holidays can be carried over into the following two years. 

Therefore, it is more important than ever to manage employees’ holiday entitlement proactively.

In addition, if your employees regularly work overtime, their overtime pay is likely to form part of their ‘normal remuneration’. This means that it needs to be included in the calculation of their holiday pay.

7. Beware the rights of short serving employees

While employees cannot usually claim unfair dismissal until they have two years’ service, various other claims can be brought from the start of employment.

Any discrimination claim can be brought from the start of employment. 

This includes discrimination based on sex, race, age, sexual orientation, part-time status, fixed-term status, disability, religion and marital status.

Also, employees can claim unfair dismissal from the start of employment if the dismissal is for an ‘automatically unfair’ reason. This includes dismissals that are connected to pregnancy or maternity, taking family leave, raising health and safety concerns (including Covid-safety worries) and raising concerns about employment rights generally, such as working time rights.

8. Flexible working request

Any employee with 26 weeks’ service can request a change to their hours, work location or duties. There is no longer a requirement that the request must relate to childcare, and there is a proposal that this should become a right that applies from the start of employment.

There is a statutory process for responding to a request, and failing to deal with a request properly can result in an award of eight weeks’ pay. 

Discrimination issues also often arise, so recognising these requests, and responding appropriately, is important.

9. Stop former employees from damaging your business

This requires written restrictions, usually in the contract of employment, stopping a departing employee from joining a competitor or poaching customers or former colleagues for a period of time.

These restrictions do need careful drafting to ensure they are enforceable. However, it is worth the investment, particularly if you have key people who could cause serious damage to your business if they left. Without specific restrictions, your options and remedies are very limited.

10. Handle reorganisations or contract changes carefully

Employers cannot unilaterally impose changes to employees’ terms and conditions of employment without the consent of the employees. Therefore, a careful approach should be taken to avoid breach of contract claims.

Alternatively, notice can be served to terminate employment, with the offer of re-engagement on new terms, although this should only follow a full consultation process to avoid unfair dismissal claims.

If 20 or more employees are affected, additional ‘collective consultation’ rules apply and should be factored in to avoid expensive additional penalties.

Here to help

If you have any more questions or would like further information, you can contact our Hospitality and Leisure Team on 0161 941 4000 or email the Hospitality and Leisure Team.