Katherine Wallace, property law specialist at City law firm Tarlo Lyons, examines the problem of prostitution on hotel premises and what hotels must do to remain legal.
A hotel bar worker tells his manager that a group of women who frequent the bar are known prostitutes. He also believes a colleague “arranges female company” for hotel guests. What should the hotel do?
Section 175 of the Licensing Act 1964 states that it is an offence for the holder of a Justices Licence knowingly to allow the licensed premises to be the habitual resort or place of meeting of reputed prostitutes, whether the object of their so resorting or meeting is or is not prostitution.
Section 35 of the Town Police Clauses Act 1847, which applies to licensed premises, also imposes a penalty for allowing prostitutes or thieves to assemble.
It is an offence under section 36 of the Sexual Offences Act 1956 (SOA) for the tenant or occupier knowingly to permit the whole or part of the premises to be used for the purposes of habitual prostitution.
The SOA also makes it an offence for anyone knowingly to live wholly or in part on the earnings of prostitution.
Unless the barman is wrong, the hotel will commit an offence under the Licensing Act if it continues to serve the women at the bar. They can obtain “reasonable refreshment” but should not be permitted to stay longer than necessary to finish that refreshment. The hotel should check that the allegations are justifiable or reasonable before acting.
If any member of staff is arranging for prostitutes to be supplied to hotel guests, then an offence under section 36 of the SOA will be committed if no action is taken by the management after they become aware of it.
The member of staff may also have committed the offence of knowingly living on the earnings of prostitution. The SOA states that anyone who exercises control, direction or influence over a prostitute’s movements in a way which shows that he is aiding, abetting or compelling her prostitution with others, shall be presumed to be offending, unless he proves the contrary. If the hotel management is seen to be tolerating the situation, it may also be held liable.
Where the hotel premises are occupied under a lease, the lease may contain a covenant not to use the premises for immoral purposes. The situation could result in the landlord taking steps to forfeit the lease.
The situation will need to be investigated, following which it may be considered appropriate to take disciplinary action against any member of staff involved. However, any action taken must fully comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures.
- Have a clear written policy communicated to all members of staff, setting out the management’s position, and issue guidelines on how staff should and should not behave in these situations.
- Take immediate action.
- Operate a disciplinary procedure that complies with the ACAS Code of Practice on Disciplinary and Grievance Procedures.
- Check lease provisions to see what, if any, restrictions it contains on use of premises and take steps to ensure compliance.
- Ignore or tolerate the situation.
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Breaching the Licensing Act can result in disqualification of the holder and premises for holding restaurant, residential, residential and restaurant, or refreshment house licences, as well as a fine not exceeding level 2 on the standard scale (currently £500).
Breaching section 35 of the Town Police Clauses Act 1847 can result in a penalty not exceeding level 1 on the standard scale (currently £200). Breaching section 36 of the SOA can result in three months’ imprisonment, or a penalty being imposed at level 3 on the standard scale (currently £1,000), or both. If there has been a previous conviction under certain sections of the SOA, this rises to six months’ imprisonment, or a penalty imposed at level 4 on the standard scale (currently £2,500), or both.
Living on the earnings of prostitution could result in imprisonment for as long as seven years, or a fine not exceeding £5,000.
Failure to follow a disciplinary procedure that complies with the ACAS Code of Practice could result in a dismissal being held to be unfair, for which maximum compensation is currently £52,600, in addition to a statutory basic award of as much as £7,500, depending on length of service.