The new normal: how to mitigate the impact on employees

21 July, 2020
by: Cripps Pemberton Greenish

In our previous blog (…itality-industry/) we highlighted the new measures introduced by the Government to support the hospitality sector, namely: a VAT reduction from 20% to 5% on food, accommodation and attractions; and the ‘Eat Out to Help Out’ scheme which affords a discount to customers on eating out (up to £10 per head for certain meals between Mondays and Wednesdays from 3rd August) which the business can reclaim.


But just how will these initiatives assist the employer / employee relationship? During a time of economic crisis (649,000 people lost their jobs between March and June while much of the population remain on the government-backed furlough scheme until October) redundancies are rife.


Businesses may be reluctant to pass on the cost savings from the Government initiatives to customers, but can they at least save jobs?  This is crucial during a time where employee well-being is declining due to (amongst other things) job insecurity and when the economy needs people employed in order to encourage economic growth.


In order to reduce redundancies, employers must utilise the flexible furlough scheme efficiently, particularly because more customers are (hopefully) going to dine out between Monday and Wednesday – days which are traditionally quiet and require less staff.


Short time working is another option. Where there is no contractual right, employers must seek the employee’s express consent to a period of lay-off or short-time working. This approach potentially induces breach of contract and constructive unfair dismissal claims, but if the alternative is redundancy an employee is likely to agree.


Contract variations to allow staff to work elsewhere or enable flexibility so that they can gain extra income is also a useful approach. As with the above, there are risks in attempting to vary contracts but the economic situation with redundancies otherwise inevitable may be worthwhile.


Salary reductions (subject to national wage rules) are also usable (again with the same risks above). But, due to the negative impact on employees, perhaps businesses can create innovative ways to encourage consumers to tip?


If employers must take action to make redundancies, they should be mindful of their duties to employees’ health and safety. If a consultation period is to commence, this may negatively affect employee well-being and, during the period of consultation, this is a pivotal moment to act reasonably and cautiously in order to avoid claims since employers are still liable.