Chancellor’s deal a disaster for hospitality sector that is in urgent need of proper rescue package
- Friday 9 October 2020
Rishi Sunak’s announcement today (Friday October 9) of an extension to the job support scheme falls disastrously short of that which is needed to keep the hospitality sector afloat and could cost nearly one million jobs, Unite the union, which represents hospitality workers, has warned.
One in eight hospitality workers has already lost their job despite the job retention scheme providing 80 per cent of employee wages. With around half of hospitality workers still furloughed and additional support offered only to pubs and restaurants that are legally required to close their doors, an even greater cost to jobs is inevitable.
With an average wage of just £8.84 per hour, workers receiving just two–thirds of their wage and often on contracts that do not guarantee regular hours, will be forced into even greater financial hardship.
Unite Assistant General Secretary, Howard Beckett, who is responsible for the hospitality sector, is calling on the chancellor to urgently provide a proper sector-specific rescue package that provides 80 per cent of wages for businesses that have to shut and tops up the income of those workers on shorter hours.
He said: “The government must not allow this extremely important sector, employing millions of people, to fail.
“Behind every job lost is a person, and lots of these workers have financial responsibilities and families to support. Their jobs are viable, were it not for the crisis measures in place.
"Hospitality workers must be supported and we urge the government to implement our policy proposals.”
The hospitality sector is the third largest employer in the UK, creating one in six of all jobs and employing six million people (3.2 million directly). If urgent action is not taken, nearly one million of these jobs could be lost over the next six months, and almost a quarter of businesses in the sector will fail in the next three.
Unite are calling for a ‘Hospitality Rescue Package’ which urges the government to implement the following:
A sector-specific Job Retention Scheme
Extend the full Job Retention Scheme for the hospitality industry across the nation for a further six months, retaining the 80% wages support currently received for furloughed workers
Adequate sick pay and routine tests for hospitality workers
Statutory sick pay should be raised to full pay for any worker required to self-isolate due to the pandemic. As part of an overall improvement in the UK’s testing capacity, the government should aim to test frontline hospitality staff once every fortnight (on top of the current testing requirements)
Train for the future
The government to work with Unite’s proposed Hospitality Commission to establish a plan to retrain workers who lose their jobs to ensure they do not face long-term unemployment
Tripartite working between employers, unions and government immediately established to help secure and ensure both the immediate and long-term success of the sector.
Conditionality of the scheme
Support for companies via the Hospitality Job Retention Scheme should be made available on the condition that employers improve terms, conditions and pay of workers
Howard Beckett added: “The policy proposals in Unite’s Hospitality rescue package are reasonable, necessary and urgent to save the sector and are only what the workers deserve in this crisis situation.”
Notes to editors:
Further details of the Hospitality Rescue Package
A sector-specific Job Retention Scheme
Extend the job retention scheme for the hospitality industry across the nation for a further six months and adapt it to the needs of the sector. Around half of hospitality staff are still on furlough; it is not enough to extend the job support scheme or to provide assistance only in local lockdown areas. Jobs still under furlough outside of lockdown areas could disappear at the end of October, with businesses warning they will cut 25 per cent of their workforce and 23% per cent saying they will fail completely.
- Where hospitality businesses are forced by Coronavirus restrictions to temporarily suspend activities, workers must be furloughed on at least the same basis as they were during the original job retention scheme.
- Where businesses continue to operate, companies must pursue job sharing arrangements to ensure that all workers can be retained, with full furlough provided where workers are clinically vulnerable.
- Income calculations for the purposes of the job retention scheme should include average income from tips as well as wages
- Government should make up any wages shortfall for those returning to work on reduced hours to ensure workers continue to receive at least 80 per cent of their wage (including tips)
- This Scheme should be part-funded by a sectorial support levy placed on large corporations that have profited from reduced hospitality custom during the pandemic, such as major supermarket chains, re-diverting money back into the economy that would otherwise fatten shareholder dividends. For example, Tesco has seen pre-tax profits rise by 29 per cent in the first half of the year after a 90 per cent jump in online sales during lockdown, which the company has announced will be used to reward shareholders with a 21 per cent increase in their payouts.
- Part of the estimated £1.3bn emergency Covid-support fund should be used to support the hospitality sector rather than be clawed back by Government.
Routine tests and adequate sick pay
Hospitality workers come into contact with a huge number of people every day and must self-isolate for up to two weeks if symptoms arise among staff, unless they receive a negative test result. Due to the unavailability of tests, entire shifts are being forced to stay at home for 14 days on just £95.85 per week Statutory Sick Pay, potentially unnecessarily. Business Minister, Nadhim Zahawi told the BBC today that a third of Coronavirus cases originate in the hospitality sector. Asymptomatic workers who unknowingly continue to serve customers present a risk to public health.
- As part of an overall improvement in the UK’s testing capacity, the government should aim to test frontline hospitality staff once every fortnight
- Statutory sick pay should be raised to full pay for any worker required to self-isolate due to the pandemic.
Train for the future
One in eight – over 100,000 – hospitality workers have already been made redundant and, with 74 per cent of employers from across all the economy saying they plan to keep at least some of their workers working from home, other job losses may be unavoidable as city centre businesses face a drop in sales. According to Unite research, 48 per cent of hospitality workers say they will look for work in a different industry if they are made redundant.
The government’s JET scheme is unfit for purpose, offering little more than consultancy on the job seeking process and providing no new workplace skills for applicants.
- The government must work with Unite’s proposed hospitality commission to establish a plan to retrain workers who lose their jobs to ensure they do not face long-term unemployment;
- Retraining programmes should take into account the changing world of work and the move towards a greener, increasingly automated economy
- All workers must leave the training programme with a higher level of qualification than that with which they entered, equipped with skills with a real value to our present and future economy.
Working together, Unite believes we can build back a sector that is robust, ready to serve local communities and able to service an economy built around homeworking, shorter working hours and increased leisure time. A sectoral approach to recovery will also help shift hospitality away from its status of low-paying, insecure employment, towards terms and conditions, pay, health and safety, training and security - fit for the 21st century in the world’s 6th richest nation.
- Tripartite working between employers, unions and government must be immediately established to help secure and ensure both the immediate and long-term success of the sector.
Support for companies via the sector-specific job retention scheme should be made available on the condition that employers:
- Provide secure contracts with a guaranteed minimum and maximum number of hours to all workers on their payroll within the last three months
- Utilise job sharing to keep as many workers in jobs as possible rather than overburdening some staff and laying off the rest
- Engage with the hospitality commission to improve working conditions
- Curb excessive executive wages in larger corporations, and demonstrate that public money is not used to pay shareholder dividends.
During the coronavirus crisis Unite is working to keep workers and the public safe, to defend jobs and to protect incomes.
For media enquiries ONLY please contact Unite senior communications officer Barckley Sumner on 07802 329235 or 0203 371 2067.
Email: [email protected]
Unite is Britain and Ireland’s largest union with members working across all sectors of the economy. The general secretary is Len McCluskey.
 UK hospitality: https://cdn.ymaws.com/www.ukhospitality.org.uk/resource/resmgr/2019/documents/general_election/UKH_Infographic_and_summary.pdf
 UK Hospitality: https://www.ukhospitality.org.uk/news/526294/UKH-warns-over-scale-of-hospitality-job-losses-if-further-employment-support-not-forthcoming.htm
 UK Hospitality: https://www.ukhospitality.org.uk/news/527802/Quarter-of-hospitality-businesses-believe-they-could-fail-in-next-3-months-without-further-support.htm