Regulation weight
A new arrival joined the ever-expanding list of employment regulations and law late last year. On 15 December, the right to extended maternity leave and parental leave came into force - but there were not many people in the hospitality industry who welcomed this particular baby with open arms.
"There's just been too much to cope with," argues Alan Gaunt, owner of three restaurants, including Pullens, in London. "It has meant much more administration and the onus is on the employers. We comply with the essentials of each piece of legislation, while hoping we are not contravening anything in ignoring the detail."
In the past 18 months, four major pieces of new law, with profound implications for hospitality, have been passed on to the statute book: the minimum wage, the working time regulations, the Employment Relations Act and the legislation covering extended maternity and parental leave. The cost of all four has been estimated in the billions of pounds, yet the industry has not suffered the massive rounds of redundancies and closures prophesied. Nor has there been a marked improvement in the conditions of the lowest-paid workers.
"The legislation is not having that much of an effect," insists Dave Turnbull, regional industrial organiser for the Transport and General Workers Union in London. "Employers are able to water them down so much that the impact has been negligible."
The fact that parental leave is unpaid has limited the effect of this regulation so far. Few workers in the industry can afford to take extended leave for no pay.
"We were concerned that the UK Government might follow some other European countries and give rights to social security during parental leave," says Martin Couchman, deputy chief executive of the British Hospitality Association. "Even subsistence support could have encouraged people totake advantage of this new law and, while bigger firms may be able to cope with the loss of a key member of staff for a few days or weeks, small businesses would find it very difficult."
There will be a cost to the industry in the existence of parental leave and the extension of maternity leave, but they are not expected to change the working conditions of the majority of employees.
High hopes for improvement had been pinned instead on the minimum wage and working time regulations, each of which was heralded as a major breakthrough in the improvement of workers' rights and conditions. The minimum wage was expected to push up the lowest salaries, and it was hoped that the working time regulations would cut down on excruciatingly long shifts while guaranteeing paid holidays for all - and the recognition of unions was going to tip the balance back in favour of the workers.
However, there is little evidence that the brave new world of fairness in the workplace has arrived.
Turnbull is unimpressed. To avoid paying the minimum wage, he says, some employers have been known to count tips in as wages, which can bring salaries up to the required minimum level while also leaving staff worse off in real terms; or staff are being ordered to do the same amount of work as before but in less time. And thousands of employers and workers have dodged the working time regulations by signing opt-out contracts, which allow them to work indefinite hours.
But perhaps the greatest reason the raft of legislation has had less impact than forecast is the simple fact that businesses are ignoring them. "People are carrying on as normal," claims Turnbull.
For once, the BHA agrees with him. "Companies are taking an increasingly French approach," says Couchman. "They are overwhelmed with all the new laws and there is a lot of non-compliance."
The situation is not expected to improve over the next few months, as even more employment legislation is passed. On 7 April, the Part Time Work Regulations will become law, making it illegal for employers to treat part-time workers differently from full-timers. The Government estimates that the cost of these new regulations will be £14.7m, a major part of which will fall on hospitality, as one of the biggest employers of part-time labour in the UK.
The next section of the Employment Relations Act comes into force in early summer, granting the right to all employees to have union representation during a grievance procedure. And the following year, further legislation covering the rights of casual staff will be passed. While the former will have more impact than previous union law, it is unlikely to make dramatic changes, as fewer than 10% of the workforce are members of a union. However, the implications of the latter are far more profound.
"We are not sure what [these implications] will entail," says Couchman, "but they will be more significant as there are so many casuals in this industry."
The continuing introduction of European-led legislation is proving too much for the industry. Businesses cannot implement the new rules, even if they want to. Even larger companies, such as Forte Hotels, are finding it difficult to cope.
"More legislation is planned that will be time-consuming to implement, putting greater pressure on our resources," says Stephanie Monk, human resources director for Granada Group, which owns Forte. "The key issue is the short lead time that is given to implement complex legislation, which forces employers into crisis mode."
Dealing with any new legislation is stressful, but when several new sets of regulations come into force in a short time, the pressures on those implementing the legislation is immense. Sadly, the result could be non-compliance, which means little improvement for employees.
CALENDAR OF EMPLOYMENT LAW
Working Time Directive
Introduced: October 1998
Core elements: maximum 48-hour week, including overtime, averaged out over 17 weeks; minimum 11 consecutive hours of rest per day; 35 consecutive hours of rest per week; four weeks of paid annual leave per year; maximum average eight hours per night shift over 17 weeks
Impact: increased bureaucracy. Many employees have signed contracts waiving the 48-hour limit. The Government is consulting groups about the prospect of scrapping the requirement to keep detailed records for those who opt out of the 48-hour limit and replacing it with a requirement simply to keep a list of those who have signed a waiver.
Minimum Wage
Introduced: April 1999
Core elements: minimum hourly rate set at £3.60 (£3 for 18- to 21-year-olds). This will rise to £3.70 in October, and £3.20 for18- to 21-year-olds in June this year.
Impact: besides increased cost, employers need to keep sufficient records to prove that they are paying the national minimum wage.
Maternity and Parental Leave
Introduced: December 1999
Core elements: extends statutory right to ordinary maternity leave to 18 weeks; gives all employees rights to 13 weeks of unpaid parental leave if they have one year's continuous service and the child was born after 15 December 1999. Valid for five years, except in the case of disabled children, where rights stand until the child is 18 years old.
Impact: still early days but the fact that leave is unpaid may limit take-up.
Employment Relations Act 1999
Introduced: legislation to be staggered
Initial provisions: increase in compensation limits for unfair dismissal to £50,000; discrimination on grounds of trade union membership unlawful.
Impact: limited as yet.
FUTURE LEGISLATION
Part Time Work Regulations
Due: 7 April 2000
Origin: European Part Time Directive
Core elements: will give part-time workers the right to no less favourable terms and conditions than comparable full-time employees.
Impact: expected to be significant because there are so many part-timers in the hospitality industry.
Employment Relations Act (second tranche)
Due: spring/early summer 2000
Core elements: legal right of everyone to be represented by a union representative during grievance procedure; right to a secret ballot on union recognition if 10% of workforce are members; automatic right to union recognition if 50% of workforce belong to a union.
Impact: limited, as there is low union membership in the hospitality industry.
Fixed Term Work
Due: must be implemented by 2001
Core elements: could give employment rights to casual staff.
Impact: expected to be profound.
Source: Caterer & Hotelkeeper magazine, 2-8 March 2000
