As the coronavirus crisis continues to escalate, Julian Cox Head of Employment at iLaw, is calling on the Government to do more to help the embattled hospitality and leisure industry.
More and more restaurants, hotels and attractions are dealing with cashflow difficulties and potential closure as customers grow fearful of exposure to COVID-19, with bookings down considerably at this time of year.
With warnings that the UK may continue to see a slowdown until at least June this year, there are also concerns about the upcoming summer season, which is an important lifeline to so many communities across the country.
In response to this growing crisis, Julian is echoing the recommendations of UK Hospitality, which is calling for:
– Temporary staff redundancies where demand falls substantially with Universal Credit covering wage costs;
– A business rate holiday for all businesses regardless of size;
– All payments to HM Revenue & Customs (HMRC) suspended for three months; and
– Statutory Sick Pay payments to all hospitality businesses.
He said: “It is good that HMRC is already offering payment plans for VAT which falls due at the end of the month and offering improved time to pay, but that isn’t enough for this industry, which is badly affected.
“In these uncertain times, with the hospitality industry so exposed at the vanguard of the crises, we fully support UK Hospitality in their appeal to the Chancellor to do more and would call on Rishi Sunak to announce all payments, not just VAT but National Insurance contributions, ought to be suspended to ensure businesses in the sector survive and jobs are saved.”
Julian, who works with clients from a wide range of industries, including many that support the hospitality and leisure trade, has said he has been inundated with calls from employers regarding their options to reduce staff costs during these difficult times.
“No one wants to be losing staff members, but the reality of the situation is that for businesses to survive this situation they need to be at their fighting weight. Sadly, this may involve needing to cut employee numbers,” Julian added.
He said that businesses in the sector should start reviewing their current payroll to see which members of staff could be laid off with the least disruption.
Julian said that those with the shortest service at a company were most at risk, particularly those with under two years employment at a company, as the legislation makes it easier for them to be removed from their post, as no redundancy payment is usually required and they can be given less notice.
“Businesses need to be pragmatic and unfortunately, those employees with service under two years are most likely going to be the first to see their contract terminated, as employers may only need to give a short notice and may not be required to make redundancy payments,” Julian explained.
“Those who have more than two years’ experience are typically entitled to a redundancy payment, which will be larger the longer a person has worked at a company.”
Julian added that businesses also had the option reduce working hours for hourly paid staff.
Another option and one being employed by airlines is to put staff on holiday. He said: “An employer can require an employee to take holiday. However, they must give notice to the employee that must be a least twice as long as the holiday that is required to be taken. If they want an employee to take a one week holiday, they have to give them two weeks notice.”
If you would like employment advice regarding coronavirus, please speak to Julian Cox.