Hospitality businesses are facing unprecedented difficulties due to the coronavirus crisis, but workers' rights still apply, says Anne Mannix.
Hospitality businesses who are forced to reduce working hours, or even ask staff not to come into work, need to remember that staff are entitled to be paid under the terms of their contracts if they are ready and able to work.
Many workers will be engaged under zero-hours contracts, which give the business a bit of flexibility in terms of lawfully not having to pay for hours that are not required, but employers should still check the contract for any guaranteed minimum hours provisions or any notice requirements, otherwise they could be in breach for failing to comply.
For ‘regular’ workers who have fixed hours/shifts but are no longer needed to attend for work, or who are asked to take a significant pay cut, the position again is that if they don’t consent, it is a breach of their contracts not to pay the contractual wage and they would have the right to claim unlawful deduction of wages for unpaid wages.
Employees with two or more years of service could also claim constructive dismissal and go to an employment tribunal, but this means they would be left without a job and, because of delays in hearing cases, the employer could have gone out of business in the meantime.
Employers could make temporary lay-offs or put employees on short-time working– but only if there is a contractual right to do either of these things. Employees with at least one month of employment and for whom the employer does not have work may be entitled to a statutory guarantee payment (SGP) – this is payable for up to five ‘workless days’ in a three-month period. An SGP is of limited monetary value: the rate of guarantee pay per workless day is capped at £29 per day (going up to £30 after 6 April).
Finally, if there is no work, and no prospect of this changing in the short to medium term, redundancies are likely. Employers may be forced to make these soon. Only those employees with two or more years of service are entitled to a statutory redundancy payment, as well as notice monies and any accrued outstanding holiday pay. Where employers are insolvent, some of the payments will be made out of the National Insurance Fund, but this could take many months to come through.
Anne Mannix is a partner in the employment team at law firm Spencer West