APPENDIX 23
Memorandum submitted by the British Hospitality
Association (PL 25)
SUMMARY
1. The British Hospitality Association represents
the hotel, restaurant and catering industry, which nationally
has nearly 2 million employees. Fifty per cent of these are under
age 30, compared to only 26 per cent of the national workforce,
and the industry will therefore be particularly affected by parental
leave.
2. Parental leave will inevitably add costs
to this industry, with its 300,000 establishments, most of them
independently operated. Employers will have to find replacement
staff and train them to the required standard. We would be seriously
concerned if the Directive was gold-plated so as to require the
employer additionally to pay the employee all or some of their
remuneration during parental leave.
3. In any event, on the analogy of the existing
maternity leave rules, employers would probably be expected to
continue with contributions to occupational pension schemes and
with the provision of other "perks". Where such "perks"
were subject to Employers' National Insurance Contributions, these
would presumably continue to be paid during periods of parental
leave.
4. We do not offer an opinion on whether
there should be a "parental leave benefit" paid by the
Department of Social Security to those parents taking leave, other
than to note its possible cost.
RESPONSE
5. The British Hospitality Association is
the national association for the hotel, restaurant and catering
industry, representing some 25,000 establishments in a sector
ranging from motorway service areas to clubs. The hospitality
industry has nearly 2 million employees[101]
and a total annual turnover estimated at some £50 billion.
6. The hospitality industry will be particularly
affected by the introduction of the Parental Leave Directive,
for four reasons:
— first, it has a particularly high
proportion of young workers, who are most likely to become parents.
Compared to the national average of 26 per cent of the workforce
being aged up to 30, some 50 per cent of hospitality industry
employees are in this age bracket[102];
— second, it has a particularly high
proportion of women workers at 71 per cent of the workforce.[103]
While parental leave entitlement will, of course, apply to both
partners, it must be likely that, in families where only one partner
decides to take such leave, this will usually be the mother;
— third, it is relatively common for
a couple both to work in the hospitality industry, often in the
same establishment. The impact on what may well be a small establishment
of both taking parental leave, even if it is not at the same time,
could be considerable;
— finally, the vast majority of the
300,000 establishments in the industry are small, whether they
are independently operated or group owned. Losing a member of
staff for up to three months can create significant operating
difficulties.
7. Parental leave, like maternity leave,
will generally necessitate recruitment of a temporary stand-in,
often requiring specific on-the-job training. The industry already
has considerable job vacancies (some 75,000 recorded at Job Centres,
with perhaps a similar number of unrecorded vacancies in addition.)
8. With some 725,000 live births annually
in the United Kingdom,[104]
this is the equivalent of up to 360,000 parents being on parental
leave at any one time, of whom this industry might be the employer
of perhaps 50,000 or 60,000. Even if only half of all entitlement
were taken, the industry would find itself with a significantly
worse labour shortage problem.
9. The Parental Leave Directive imposes
no requirement that the leave be paid. We note that, under the
regulations on parental leave proposed in the Employment Relations
Bill, remuneration is excluded from the terms and conditions which
will continue to apply during the period(s) of leave. We believe
that this is the right approach. Forcing employers to continue
to pay salaries during parental leave would have a serious effect
on costs. By analogy with maternity leave, employers would, in
any event, have to continue to offer those "perks" which
do not count as remuneration (eg, pension contributions.) Again,
with perhaps several tens of thousands of employees on parental
leave at any one time in our industry, the costs would be substantial,
even excluding any requirement to pay "remuneration."
10. However, employers do have to offer
(in most cases of pregnant employees) Statutory Maternity Pay,
though they are generally able to recover most of the cost from
the government. We would strongly oppose any gold plating of the
Directive with the back door imposition of costs on hospitality
employers via the introduction of an analogous "statutory
parental leave payment," should any such innovation be under
consideration.
11. Employers will, in some cases, have
to pay National Insurance Contributions on "perks."
From April 2000, it is intended that benefits-in-kind should generally
be subject to national insurance as they are already to income
tax. This will particularly affect live-in accommodation, which
is quite widely offered in the hotel sector and which, under the
parental leave proposals, would presumably have to remain available
to an employee absent on such leave. Finally, should the Committee
be considering recommending the introduction of some form of social
security benefit for those taking parental leave (and who would
not therefore be receiving any remuneration), we do not have a
specific view on this possible approach, other than to note that
the costs could be considerable, especially since its availability
could significantly increase the take-up of leave.
Martin Couchman
Deputy Chief Executive
May 1999
101 Total hospitality industry employment in 1998:
1,880,000 (sources: Annual Employment Survey and Labour Force
Survey). Back
102
Source: Hospitality Training Foundation. Back
103
Source: Hospitality Training Foundation. Back
104
Live-births in 1997: 725,800 (source: Office for National Statistics). Back
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