Employment Partner at BLM Julian Cox comments on Pizza Express closures and job losses
Julian Cox, Partner and Head of Employment Law, London at BLM comments on BBC reports that Pizza Express may close 67 outlets and cut 1,100 jobs:
“Pizza Express is yet another household name that has been pushed to the brink by COVID-19, with the hospitality sector hit particularly hard. Whilst the Government has attempted to encourage people through the doors with ‘Eat Out to Help Out’, the initiative is clearly not going to be enough to protect the sector in the long term.
As we’ve seen from local infection spikes, this pandemic is far from over and further support is needed for the months ahead. Whilst the Chancellor has previously suggested that the October end date for the scheme is final, many impacted businesses will surely be asking whether this will go far enough to stave off financial ruin. The pressure on employers is mounting, with National Insurance and pension contributions needing to be covered as of August. As these contributions increase as the job retention scheme is gradually tapered off, it’s unfortunately likely to result in a swathe of job losses.
Businesses having to make these difficult decisions now must take caution at every stage of the redundancy process to avoid unfair dismissal claims and employment tribunals. Ensure reasonable selection criteria is applied fairly and carry out a thorough consultation process. This still applies for furloughed employees without breaching the rules on working, and the government recently clarified that redundancy pay must be based on pre-furlough wages, and cannot be subsidised by money from furlough.”
Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.