The outbreak of Novel Coronavirus (COVID-19) has understandably had a huge impact on the hospitality sector, with significant workforce implications. This Q&A tackles some key queries in relation to the management of staff during the pandemic.
For the majority of employers in the hospitality sector, the need for significant numbers of staff to continue working ceased with immediate effect following the closure order and the vast majority of site-based hotel staff were no longer required.
Employers within the hospitality sector have taken various approaches to managing affected staff and the associated costs. These have included (i) making redundancies on a small or large scale, often with little to no consultation (and poor PR consequences), (ii) the removal of staff from employment-related accommodation, (iii) agreeing reductions in working hours and/or pay, (iv) furloughing affected staff, and (v) offering staff monetary and non-monetary support.
As parts of the UK remain in lockdown and there are only tentative indications of a possible reopening of certain parts of the hospitality industry in July at the earliest, hospitality employers will need to start to consider the longer term implications of the pandemic including any changes to their initial COVID-19 response and post-lockdown staffing strategies.
Whilst hotels in the UK currently remain closed, employers should be looking at how they might operate safely as and when restrictions are eased. Some core staff may still be attending work during the lockdown.
- Carry out and continually update risk assessments and consider any factors that may make employees particularly susceptible to infection (particularly those from vulnerable groups). Put precautionary measures in place. Health and safety measures are likely to require staff consultation, and risk assessments will need to be publicised to the workforce.
- Advise employees not to attend your premises and to notify their HR representatives as soon as possible, if they are (i) unwell, (ii) shielding, (iii) in a high risk category or have been notified that they are high risk, and/or (iv) required to self-isolate for other reasons.
- Communicate your approach with employees, particularly in relation to pay and working arrangements. Give employees a clear contact point for any queries they may have.
- Continue to circulate up-to-date information on good hygiene practices (such as reminders on action employees can take to help stop COVID-19 spreading) and provide any necessary equipment to facilitate this for those that are attending the workplace, such as hand sanitisers or PPE.
Can we request or require information from hotel staff about potential or actual exposure to the virus? Can or should we tell hotel staff or guests if a member of staff is diagnosed or shows symptoms of COVID-19?
The Information Commissioner's Office states that, whilst employers have health and safety obligations in respect of employees, this doesn’t necessarily mean employers need to gather lots of personal information about employees. Employers should collect no more data than needed, and maintain appropriate safeguards whilst doing so.
- You can and should require employees to notify HR as soon as possible, if they are (i) diagnosed with COVID-19 or are otherwise unwell, (ii) shielding, (iii) in a high risk category or have been notified that they are high risk, or (iv) required to self-isolate for other reasons. You can also ask staff to inform you if they are experiencing symptoms.
- You can take temperature readings from employees if strictly necessary to do so, i.e. where alternative measures (such as remote working) are not possible.
- You should inform staff and guests who are potentially affected and provide updates. This should be done as far as possible without naming or identifying the affected individual, and in any event you should not provide more information than necessary. You should also follow up with high risk employees and guests, and consider providing additional information or identifying the affected individual to ensure they have sufficient information to take appropriate precautions.
Access to health data and information regarding the identity of the affected employee should be restricted, and the information should only be shared with those who have a business need for it in order to carry out their duties. You must continue to ensure that key data privacy principles and obligations are complied with, appropriate policy documents and processes are in place, and that additional steps (such as data protection impact assessments) are taken as appropriate.
We have some hotels open (to provide accommodation for permanent residents, key workers and/or the homeless). Can / should we require workers to attend work?
The UK government has ordered the closure of hotels other than for excluded categories (permanent residents, key workers and those providing emergency accommodation, for example for the homeless).
Where a hotel is open for these purposes, workers can lawfully be required to attend work where reasonable, and it may be reasonable to take disciplinary action if they fail to comply with an instruction to do so. However, in the current climate employers need to be particularly sensitive to the concerns of staff related to their health and safety before taking any adverse action. If getting to work or carrying out their duties poses a threat to the health and safety of an employee, it will be difficult for an employer to argue that the instruction to attend work was reasonable and detrimental treatment or dismissal of staff where they have reasonable health and safety concerns will be unlawful. Sensitive and careful handling of employee concerns will be key.
What should we do if a staff member tells us they are unwell (whether this is as a result of COVID-19 or otherwise)?
You should manage employee absences in the same way as usual – determine the reason for absence, notify the employee, take any further action required and pay them accordingly. With regard to the risk to others, you should identify any individuals who may be at risk as a result of the suspected or confirmed infection of the employee and notify them as appropriate. If the individuals are still working, they should be instructed not to attend work and to follow government guidance regarding self-isolation (if they have COVID-19 symptoms).
Most of our hotels are closed in line with government orders and the majority of our staff can't do their jobs from home - do we still have to pay them even when they aren't working?
Where the workplace is closed and staff are not able to work from home, you are obliged to continue paying their wages in full unless there are contractual provisions that can be relied upon (so-called "lay off" clauses) or you specifically agree otherwise.
Where staff are engaged on flexible arrangements such as 'zero hours' contracts with no guaranteed hours or pay, it may be possible not to pay them – this will depend on your contractual terms and wider working practices. As regards agency workers and independent contractors, you will need to look at the relevant contractual terms.
If staff are sick or officially self-isolating, they should receive sick pay (noting that statutory sick pay is now payable as of the first day of absence, and is also payable to those who are "shielding" under emergency legislation). Similarly, if employees take holiday, their holiday pay should be calculated and paid in the usual way.
Where there is no work for staff to undertake, it may be possible to place them on "furlough" and make a claim for 80% of their wages under the government's Coronavirus Job Retention Scheme ("CJRS") – see next question.
For further details regarding pay obligations, please see our COVID-19 HR InFocus Page
or get in touch with us directly.
What if we no longer need hotel staff and can’t afford to pay them – what are our options?
A number of options may be open to you.
- You can agree with employees to reduce their hours and/or pay. Whilst this would ordinarily meet stiff resistance from employees, hospitality employers in particular are finding that staff are much more willing to engage with such proposals at this time, on the basis that they are a way of avoiding more drastic cost-cutting measures such as redundancies.
- Under the CJRS, employers can "furlough" employees (i.e. place them on leave of absence) and apply for a grant that covers 80% of their usual monthly wage costs, up to a cap of £2,500 a month, plus the associated employer NICs and pension contributions on that pay.
- Alternatively, where there is a reduced need for staff to carry out particular roles there may be grounds to safely dismiss employees by reason of redundancy. The risks are low and the costs relatively minimal where employees have less than two years' service (hence this approach has been adopted by a number of hoteliers given the usual level of staff turnover), but there are additional requirements to inform and consult on a collective basis and notify the government of proposed redundancies where you propose to make 20 or more employees redundant at one site within a 90 day period. These collective consultation obligations apply regardless of length of service and impose time constraints on dismissals.
You should consider the long term as well as the short term needs of the business, as this will inform your approach. For example, it may be desirable to furlough some staff and make others redundant, depending on whether there is likely to be a continued need for employees to perform particular roles post-lockdown.
You should also bear in mind the potential PR and reputational implications of the proposed approach – these may have important ramifications for hotel businesses both during and after the lockdown.
Where can we find out more about furlough and the Coronavirus Job Retention Scheme (CJRS)?
The CJRS claims portal went live as of 20 April 2020, and can be found here. According to recent government guidance and statements, together with the Treasury Direction issued on 16 April 2020, the following time periods apply.
- Grants are available for a period starting on 1 March 2020. It has recently been announced that the CJRS will be extended in its current form until 31 July 2020, and to the end of October 2020 with modifications (such as permitting employees to perform part time work during furlough and sharing of the cost between government and employer).
- The cut-off date for the CJRS has been pushed back so that it covers employees on the payroll up to and including to 19 March 2020 (rather than 28 February 2020 as originally stated). However, there is now a requirement that an employer must have notified HMRC of employees for whom it is claiming under a Real Time Information (RTI) submission prior to 19 March 2020. Employers will need to check this carefully, as it appears possible that, some employees who were initially thought to be covered may now not be due to the RTI requirement.
Can we require hotel staff to take or not to take holiday in these circumstances?
The position with regard to requiring workers to take or not to take holiday differs for statutory holiday and contractual holiday.
- Statutory holiday: The 5.6 weeks per year (28 days for a full time worker), guaranteed under the Working Time Regulations 1998. You can require staff to take their statutory holiday either at a specific time or during a specific period, as long as you give twice as much advance notice as the amount of holiday. For example, if you want staff to take two weeks' holiday, you would need to give them four weeks' notice. You can also require staff not to take their statutory holiday by giving notice equal in length to the number of days to which the notice relates.
- Contractual holiday: Depends on the terms of the contract or your holiday policy.
Any holiday taken must be paid at the usual full rate. The government has relaxed the rules on carry-over of unused leave, so that workers have the right to carry forward the four weeks of leave guaranteed under the European Working Time Directive (which cannot in normal circumstances be carried over) where it was not reasonably practicable to take it in the current leave year “as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society)”. Any carried-over leave must then be taken within the next two leave years.
What if hotel staff live on-site in my accommodation - do we have to let them stay there?
Yes. Unless there is a contractual right to require them to vacate, employees will continue to retain their contractual entitlements including in respect of accommodation. If this is their only accommodation, there may be long-term reputational risk associated with evicting employees during the COVID-19 crisis. If you require payment of rent for accommodation or usually deduct this from pay, you may need to consider how to manage this and whether any changes in pay will affect this, particularly if you wish to retain staff.
Can we change hotel staff terms / reduce their hours / pay or temporarily lay off staff?
Maybe. There is a statutory scheme for reduced working hours (known as "short-time working") and you can similarly "lay off" employees for a temporary period without pay providing that you have a contractual right to do so.
In the absence of such a right, any changes will require employees' consent to ensure that they will not amount to a breach of contract. You should therefore be mindful of the risks, including constructive dismissal or triggering collective consultation requirements (if redundancies might follow), and proceed with care. Bear in mind that furlough grants may be available for those who are not working as a result of COVID-19.
Both lay off and short-time working may in some circumstances trigger an entitlement to statutory redundancy pay. The rules around this are complex.
If we've already made offers to new staff members, can we withdraw these or delay their start date?
Once an offer has been accepted by an employee or worker, the employer has committed to employing them under the terms offered, including paying the staff member from their start date. As such, you would need to come to an agreement with the new joiner in order to delay the start date.
If you no longer require the individual at all, it is relatively straightforward to dismiss employees with less than two years' service provided the dismissal is not in connection with discrimination or whistleblowing (or for some other "automatically unfair" reason). Therefore, you could simply terminate the contract in advance of the start date. It will be necessary to consider the terms of the contract and the start date to determine whether any payment is due (either by way of pay in lieu of notice or damages for wrongful dismissal).
What should we be doing about staff post-lockdown?
As UK hospitality employers have been particularly affected by the imposed lockdown, it will be important to consider staffing as a key part of your exit and post-lockdown strategy.
- Where you have agreed a reduction in pay and/or hours with affected staff, consider how and when you intend to transition back to normal working arrangements. This is likely to require a balance of the financial and commercial needs of the business against the need to retain existing staff.
- A number of hospitality employers have chosen to make large scale redundancies at an earlier stage. Whilst this may have reduced short-term costs, such employers will need to consider when and how to re-staff (if needed), in order to prepare for an exit from lockdown.
How do we do right to work checks safely for new starters?
It is possible to carry out legal right to works checks remotely where prospective employees will be working from home. Whilst ordinarily employers manually check a prospective employee's original documents in person on or before day one of their employment, it is now also possible to complete the check online via the Home Office's Employer Checking Service for certain nationals (and to then satisfy the "check" requirement via Facetime, Skype or similar live videoconferencing app).
What about hotel management arrangements – who is responsible for deciding on staffing strategy, and implementing furlough and/or redundancies? What about the treatment of costs?
Under a normal hotel management arrangement, the owner will be the employer of most hotel staff and will be liable for ordinary employment costs, whilst the operator will be responsible for the day-to-day management of staff.
The parties will need to review the management agreement and carefully consider the relevant terms. In these extraordinary circumstances, there will be a need for particularly close co-operation in relation to determining and implementing staffing changes.
Implementing furlough and redundancies
The operator will usually have responsibility for the general staffing strategy (although this may be subject to certain caveats or limitations such as the need for owner approval for changes to certain roles or significant staffing reductions). Responsibility for the practical implementation of any redundancy, furlough or other employee management processes is also likely to fall to the operator.
However, the implementation of staff cost cutting measures will primarily be driven by the longer term strategy (both during and post-lockdown) and by the terms of the management agreement as to who bears the costs.
Where the owner is responsible for staff termination and claim costs, for example, it will want to work closely with the operator where possible in order to limit the level of its exposure.
Similarly, from the operator's perspective, aside from its duties under the relevant agreement, it will need to take steps to limit its own exposure and protect its financial position under the agreement. There may also be specific requirements or indemnities in relation to employment claims, for example, which will need to be considered.
Applying for a grant under the government's Coronavirus Job Retention Scheme (CJRS)
It is the employer who can seek recovery under the CJRS – meaning the obligation to "furlough" staff and claim the CJRS grant will fall to the owner if it is the employer of the hotel staff. In practice, the owner may not have all of the information it needs to implement furlough and make the necessary claim, or indeed to limit its exposure to claims from disgruntled employees. Again, close co-operation between the owner and operator is likely to be required.
As an employer, if you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. As a practical point, third party payroll providers are gaining significant first-hand experience of the CJRS system and may have a head start on employers in interpreting and progressing through the system.