Hospitality employees facing redundancy

The shape of the hospitality workplace post-lockdown

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The government’s roadmap for easing restrictions across the country has given employers the ability to plan for the re-opening of their businesses and make the most of some pent-up demand.  

The Prime Minister’s latest announcement, that England will move to step two of the roadmap from April 12, is particularly welcome news for many businesses in the hospitality, holiday accommodation and attractions sectors.  

With evidence suggesting a bumper summer for UK tourism, it’s important employers get their staffing levels right in advance of re-opening. The extension of the furlough scheme to 30 September will help employers manage the return to work for those still furloughed, and some will be recruiting in light of anticipated demand.  

Some business models, however, will significantly change meaning there are furloughed staff who will inevitably be made redundant. Those furloughed and then made redundant by a now insolvent employer can apply for payments from the Insolvency Service if they have been employed for two years or more, including time on furlough. Holiday pay, notice pay, unpaid wages, overtime and commission that has not been paid could also be claimed.  

Furloughing staff

There is a strong argument for not making people redundant while the furlough scheme is still available, however, furlough is not cost neutral due to the employers’ national insurance costs, pension costs and other benefits. From July to September, employers must contribute more to furloughed staff pay. If businesses know they are likely to need to make redundancies post-furlough, they may need to start any consultations during furlough and it will be important to seek expert advice from employment law specialists before taking action. 

It’s also worth noting that, unlike last year, where employers put employees on notice (and therefore start to pay them notice pay), they will not be able to claim for their salaries under the Coronavirus Job Retention Scheme. 

Most employers will have a good relationship with their staff so that more permanent adjustments to hours, pay and other terms can be agreed upon quite amicably without too much trouble, but employers will still need to protect themselves and be mindful of other issues relating to minimum wage laws, anti-discrimination laws and the potential for impact on an employee’s immigration status.  

Read our article on Covid-19 - Understanding your financial position 


For advice and support on reopening your business please contact Richard Askew on 01900 310443 or email richard.askew@armstrongwatson.co.uk.

contact Richard

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