COVID-19: HOSPITALITY INDUSTRY GETS HELP
The mandatory closing of restaurants and pubs in the UK, in so far as such establishments do not provide take-away or delivery services (at least at the time of writing), combined with severely reduced travel puts many businesses in the hospitality industry, and those which supply and rely on them, at risk.
It is with great hope that the Government’s recent COVID-19 related measures will provide employers and staff across all industries, particularly those within retail and hospitality, with some comfort. These measures currently include:
- Business rates holiday
- Cash grants
- Coronavirus Business Interruption Loan Scheme
- Time to Pay in relation to tax liabilities
- Job Retention Scheme (“Scheme”)
JOB RETENTION SCHEME
It is understood that many lay-offs and redundancies have already been made across the retail and hospitality industries as a direct result of the current pandemic.
The Scheme, to be backdated to 1 March 2020, will provide employers support in paying wages of employees who would have otherwise been laid-off due to COVID-19 related business disruption. Further information on the exact scope, implementation and process of utilisation of the Scheme are expected but this is what is understood so far:
- All UK employers will be able to access the Scheme
- Employees that would otherwise be laid-off or put on unpaid leave will be kept on payroll but “furloughed”
- The Government will reimburse employers 80% of furloughed employees’ wages up to a maximum of £2,500 per month per employee, with employers having the option to cover the remaining 20%
- The Scheme will be in effect, at least initially, for 3 months from 1 March 2020
There are many details and practical questions which arise, such as:
- Does the Government equate employees and workers that are “laid-off” with those made “redundant”?
- How will workers which would have been eligible for the furlough arrangement be treated if they have already been laid-off or made redundant?
- Do employers have to consider the furlough scheme at all?
- How quickly will employers be reimbursed?
For more information on the Scheme, please view our Scheme specific article here.
These various measures of assistance will likely change over time, with further information becoming available as they are rolled out. In addition to the measures mentioned above, it has also been reported that the Government intends to implement a commercial rent moratorium which will prevent landlords from enforcing forfeiture rights under leases for a 3 month period. However, at this time, we understand this has not been officially announced or implemented. For more information on the various measures open for businesses, please visit here.
GET IN TOUCH
This article was prepared with the assistance of David Lim.
All information in this document is accurate at the time of writing. It is meant for general information only and is not legal advice.