Heineken urged to end Falcon contracts

Falcon contracts, brought in by Punch, classify pub managers as self-employed and mean managers take an agreed percentage of all net weekly sales, from which they pay their own and staff wages. It also means the pub operations are outside the pubs code.

Contract concerns

The issue for campaigners from the Pubs Advisory Service lies in allegations they have received from pub managers that the contracts have led to money being taken from their accounts “as a result of unexplained discrepancies from their cash reconciliation process and also deductions as a result of discrepancies from their stock takes”.

Citing the Uber court case, which found that drivers were employees rather than self-employed, campaigners said pub managers operating under Falcon contracts are in fact employees and therefore money should not be removed from their accounts.

While campaigners are not alleging Heineken is responsible, they have highlighted three pubs which have raised Falcon-contract-related concerns that will be transferring to Heineken’s Star Pubs & Bars estate: the Pepper’s Ghost in Leyton, east London; the Poundffald Inn in Swansea, Wales; and the Railway Tavern in Bristol, Gloucestershire.

Six-month transition

When Heineken bought the 1,900 Punch pubs earlier this year, it took on a number of pubs operating under Falcon contracts. Upon completion of the deal, Heineken entered into a six-month transitional service agreement. A spokeswoman told The Morning Advertiser​: “That means Punch continues to have operational control until March when the pubs will be fully integrated into the Star Pubs & Bars estate.”

She added that this transitional period means: “We cannot comment on the situation in individual pubs at this point but we will review each pub when it transfers over to Star and take appropriate action, if required.”  

However, she did confirm the Falcon pubs that will transfer to Star will continue on their agreements and “any changes will be mutually agreed”. 

Stock and cash control

Heineken runs its own managed operators' agreement where operators are self-employed, called Just Add Talent (JAT). The spokeswoman said: “We believe our JAT model represents a simple, low-cost opportunity for self-employed operators to run their own business, executing a proven centrally-driven model provided by Star.

“We recognise the importance of stock and cash control in any retail business. As a result, we have invested a significant amount in a management system that is transparent for both parties and we have not encountered any discrepancy in cash or stock levels to date.

“The Falcon pubs that will transfer to Star will continue on their agreements and any changes will be mutually agreed. In addition, we will roll out our cash and stock management system to Falcon operators ahead of their transfer to Star.”