COVID continues to impact hospitality sector as redundancies continue

As another household name announces job cuts, Partner and employment law specialist, Julian Cox gives his views on Government measures to protect the hospitality sector and the mounting pressure on employers:

“Like many other household hospitality names, Pizza Express has endured an especially difficult trading period following the outbreak of the pandemic. Whilst the Government’s ‘Eat Out to Help Out’ scheme may have brought more people through the door in August, it has not been enough to protect Pizza Express and much of the greater hospitality sector in the long term.

“Whilst many anticipated a slow and steady recovery as the national lockdown eased, local infection spikes and the subsequent localised restrictions has made trading very difficult and businesses’ cash reserves will continue to diminish. With no end date for restrictions in sight, it is very difficult for businesses to plan for their short and long-term futures. The pressure on employers to take action continues to mount, and starting redundancy consultations now is anticipated to be more cost-effective than keeping staff on the updated Job Support Scheme indefinitely.

“Businesses having to make these difficult decisions must take caution at every stage of the redundancy process to avoid unfair dismissal claims and employment tribunals. They should 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, as clarified by the Government, redundancy pay must be based on pre-furlough wages, and cannot be subsidised by money from furlough.

“Clearly, more work needs to be done by the government to protect the hospitality sector, as even the biggest household name franchises are struggling with the Government’s curfew measures.”

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 clients of BLM. Specialist legal advice should always be sought in any particular case.

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