Furlough 'still a cost to businesses'

07-Jun-2021 - Last updated on 07-Jun-2021 at 15:44 GMT

Furlough costs: UKHospitality's chief executive Kate Nicholls has said while Government job support has helped some businesses, operators are still struggling to meet costs with Covid restrictions in place

UKHospitality boss Kate Nicholls has defended pub bosses who have had to lay off staff since the start of the pandemic despite job support schemes.

Unite the union described staffing shortages faced by London venues as “largely a self-inflicted crisis” and blamed “endemic low pay” and zero hours contracts.

More than 270,000 hospitality employees were made redundant despite Government support such as the Coronavirus Job Retention Scheme (CRJS), the union said.

Unite national officer with responsibility for hospitality Dave Turnbull said: “Many furloughed workers went back to their country of origin and have decided not to come back to a sector which previously treated them so badly.

“Equally, large numbers, who found temporary work in other sectors, have decided there are better options available to them.”

The union called on the Mayor of London Sadiq Khan to “address the endemic low pay and zero hours culture which blights the industry and makes it such an unattractive option for UK- born workers.”

However, UKHospitality chief executive Kate Nicholls defended bosses by pointing out they had to pay employer contributions to furlough staff while enduring months of closure.

While the Government can cover 80% of an employee’s wages if they cannot work at all or some hours amid the coronavirus pandemic, employers must contribute some costs.

Uniquely hit

Operators must pay HMRC the national insurance contributions (NICS) and pensions for hours not worked, which some employers told The Morning Advertiser (MA) was “killing them” in lockdown.

Pubs and restaurants had been “uniquely hit by the pandemic,” Nicholls said, with restrictions and lockdowns amounting to £80bn in lost sales across the sector.

In response to Unite’s comments, she said: “Whilst furlough has helped to protect jobs, it is still a cost to businesses and under the extreme pressures caused by the pandemic, some businesses have unfortunately had to let staff go.

“Hospitality remains in a fragile state with a quarter of venues still closed and it will need time to recover fully.”

UKHospitality has been calling on the Government to push ahead with its fourth and final lockdown easing step on 21 June and scrap rules such as table service and ‘one metre plus’ social distancing for venues.

Bounce back

She explained: “Confirmation the Government will drop all restrictions on 21 June would, crucially, build consumer and employee confidence in the sector and trigger hospitality’s bounce back, enabling it to play a key role in rebuilding the economy.

“We are doing our utmost to work with our members and the Government to resolve this issue.

"There are a wide range of high-quality jobs and careers in hospitality, supported by leading training schemes, apprenticeships and career development pathways at all levels and the sector remains committed to engaging with partners to provide the jobs and careers of the future.”

The Mayor of London Khan said visa rules were “damaging” the hospitality sector in London and called on ministers to grant cities with devolved powers in order to fill vacancies for sectors suffering staff shortages.

A UKHospitality survey found 80% of hospitality operators reported vacancies for front of house roles and 85% needed chefs.

The survey of hundreds of hospitality operators suggested a current sector-wide vacancy rate of 9%, implying a shortage of 188,000 workers.