Employment reform without mitigation a bitter pill for sector to swallow

The King’s Speech set out plans to bring in a new Employment Rights Bill which, among other things would see an abolition to banding in the National Living Wage, meaning all ages would be paid the same, a ban on zero-hours contracts and day-one rights on things like maternity, unfair dismissal and sick pay.

The challenge for pub and bar operators is, while the legislation is well intentioned, it disproportionately impacts on a sector which is already under the cosh on all fronts - any move to increase costs and reduce flexibility on the wage front could be a final straw for businesses that are clinging on.

At the same time, to rail against the legislation does us no favour either. We run the risk of being branded “bad employers” or being labelled as a low-wage sector, when the reality is that we play a key role in the labour market that this potentially could undermine.

The reality is, the hospitality sector is a key provider for many people’s first jobs and provides vital experience, training and life skills for many young people.

The decision to level out the wages means many operators will think twice about providing those first jobs to inexperienced and untrained workers, people they previously would have invested time and energy in nurturing and training.

This could run the risk of removing a vital source of experience, training and career opportunities for young people at a time when it has never been more needed.

An increase in salary for the inexperienced 16 to 18 year old pot wash will also mean an increase in wages up the chain as people expect to be paid commensurate with their skills and experience - further increasing wage costs for the operators, not to mention running the risk of fueling inflation as businesses seek to offset those increases.

This, combined with the end of flexibility around zero-contract hours, which, while open to abuse in some quarters, also allows operator to balance out labour supply and demand in a volatile trading environment, will be a bitter pill for many to swallow.

But again, we don’t want to be seen to simply be the misers, railing against the Government plans to improve the lot of the employed - so let’s have a little bit quid-quo-pro here.

If the Government can mitigate the impact of rising wage costs with, hmmm, let me think…

•  VAT cuts, (because don’t forget, an increase in wages means increases in HMRC receipts)

• Meaningful business rates reform, (supported by continued discounts while they sort it out)

• Energy market reform, perhaps a cap on profiteering

There’s three things for starters, so let's hope this new Government with its willingness to reward employees is listening and extends some of that largesse to the people who have to do the heavy lifting - the employers.