Written submission from Mill End Hotel (UK) Ltd (ERB0001)

Dear Sir/Madam,

I thank you for the opportunity to give feedback on the proposed changes to employment law.

For clarity and to be concise I have answered the key questions below which will have an impact on ourselves.

Impact on businesses  

• What impact will the areas covered by the Employment Rights Bill have on small, medium and large businesses?

 A huge impact! I think the government and the bill needs to realise the changes that are being suggested will mean every single UK business will need to form contracts and the way they work with their employees – there are huge cost implications to this which there needs to be support in place to help with prior to the changes being made.

• What impact will these measures have on staff retention, hiring practices, probationary periods and wages? 

The majority of the measures will not impact staff retention or wages, however, there are three areas which will have a huge impact if not done properly and cautiously:

1. Zero hour contracts – While I completely agree that exploitive zero our contracts have no place in business, there are zero hour contracts out there for the benefit of employees and that are needed in two primary situations.
1. Hospitality – Hours fluctuate hugely depending on the time of year, and a fixed hour contract does not allow this. There needs to be an allowance for certain industries that are seasonal and can physically not guarantee certain hours all year around
2. Younger workers in college or university – We have many younger workers in hospitality who can not work the same hours every week and therefore a fixed hour contract just wouldn’t work? They want to work 40 hours one week and then 0 the next by their choice?
2. Last minute cancellation of shifts and last minute rota’s again are a must in hospitality, it is impossible to determine the exact numbers we will have in advance and cannot afford to be paying compensation to people not needed. Sometimes we will have 10 people pre-booked but then have 50 come in last minute so need the flexibility to be able to rota people last minute, visa versa, sometimes we may have 50 people booked and then several cancel last minute and we couldn’t afford to pay a staff member not needed. That flexibility is hugely needed and to be frank you risk, especially in the off season, crippling hospitality further than you already have by forcing us to pay for staff who aren’t needed because we can’t cancel last minute.
3. Sick Pay – there are huge numbers of people who are off work because they are hung over or various reasons which they are not sick, if bringing in day one payment there needs to be the need for a doctors note from day one else again you will be heaping huge costs onto business which will force cuts. Furthermore the plan to increase sick pay is going to be crippling, how are businesses with low margins like hospitality meant to afford to pay the agency staff to cover the sick person as well as the person who is sick? Especially when they are off for a long period of time! There needs to be support for businesses, a similar system like with maternity would save jobs and whole businesses if you bring in this measure.

• What impact will strengthened protections, such as day one rights, have on the hiring practices of businesses, UK employment rates and UK investment rates? 

I agree that two years with very few rights is not fair on employees, however I would encourage the bill to be reasonable and still ensure businesses have flexibility within the first 6 months. It takes at least 6 months to find out whether someone will fill a role capably, and if the measures make it too hard to dismiss someone within that time period it will cost businesses hugely and without a doubt encourage everyone to hire less people.

Economic growth and wealth creation  

How will the Plan to Make Work Pay impact:  

• Economic growth?

It will stifle it, you are looking to get people in work by asking businesses to cover all the costs and take all the risks, businesses can take these to a point but it’s clear that the new plans will put it all on businesses and will certainly make it pointless and unproductive having a small, especially hospitality business.

• What solutions or actions are required by Government, businesses and workers to effectively support the labour market while boosting productivity and protecting workers’ rights?

The government need to support businesses if they are going to bring all these changes in. Asking small businesses to pay more national insurance, more business rates, higher wages and all the changes in the proposed make work pay document will just cripple small businesses.

If they want more people to work they need to help business pay SSP, reduce NI and rates and most importantly reduce VAT to be in line with tourism/hospitality in the rest of Europe. That way business can support the higher wages suggested and grow to employee more people.

The government also needs to look at why people aren’t working; for the most part it’s easier to claim benefits than it is work. I’d suggest make it harder to claim benefits and less productive to do that rather than work.