G1 Group: The Fragility of the Hospitality Sector

The hospitality sector is being strangled by the Coronavirus pandemic.

The UK hospitality sector which covers a broad range of employment; from bars and restaurants to theme parks and event planning, has suffered greatly during the course of the pandemic. Sales have dropped by 53% when compared to last year, with an estimated £73 billion reduction in revenue, for an industry which contributes to 5-6% of the UK’s GDP they still are in a dire situation. For the 3.2 million employed in the sector their jobs have never been at greater risk and continue to be regardless of The Chancellor of the Exchequer Rishi Sunak’s plans. 

On the 8th July Rishi Sunak unveiled an unprecedented rescue package for the hospitality sector which included a slash on VAT for the following 6 months, from 20% down to 5%. He then followed this up with his signature ‘eat out to help out’ scheme, where participating restaurants will offer a 50% discount on meals up to the value of £10 during the month of August. With the furlough scheme already being increased to October previously, the Chancellor then set out another aspect to the ‘Job Retention Scheme’ whereby if employers keep their employees on until January, they will receive a bonus of £1,000.

For small business’ such as local, independent cafes, restaurants, and pubs this will be a lifeline when January comes however, larger companies such as the G1 Group have disregarded this and already begun long-term changes to their staff numbers and venue training. 

The G1 Group in Scotland which is one of the largest in the country with over 50 venues and owns popular bars such as The Corinthian Club in Glasgow and The Three Sisters in Edinburgh. The Group who have had losses of over £25 million in revenue since the beginning of lockdown,welcomed the reopening of pubs by a mass sacking of staff. In some cases more than 20 members of staff were made redundant in a single venue in the space of a few hours. This prompted calls from Unite Hospitality; one of the largest unions in the sector, to question the legality of these decisions. Under law if more than 20 members of staff are made redundant within 90 days at a single establishment then they must be consulted 30 days before the redundancies are made. This is called ‘collective consultation’ it does not always end in an agreement, but it must be carried out. 

Unite Hospitality have already entered legal proceedings against the group after a successful campaign against ‘Jamie’s Italian’ and as a result the staff were awarded 8 weeks wages after it was judged that the restaurant did not consult with workers. G1 staff were apparently unaware of this consultation notice and received no prior warning. 

The workers in an email were told that after the company’s loss in revenue directors and senior business staff took a pay cut but regardless of this the company was suffering a £1 million loss per month. The email went on to say that employment will be terminated on the 31st August and furlough will continue to be paid until then along with any outstanding holiday pay. 

The controversy with the email, while some may see as a noble deed in an ever-chaotic environment, others see this as a G1 abandoning their employee’s with allegations that if you worked for the company less than 2 years then you would be let go. 

The G1 Group are no stranger to controversies as they repeated the same feat in March just 24 hours before the Chancellor unveiled the ‘Job Retention Scheme’ with staff across venues being made redundant and immediately U-turning.

In 2013 The Shimmy Club in Glasgow, which is owned by G1, was exposed after it was revealed that a two-way mirror had been installed in the ladies toilets. Staff alleged that there was a hollow behind the mirror. The venue, as a result was closed for 2 weeks and its staff was put through equalities training.

Similarly in 2015 it was found that the company underpaid staff on minimum wage as they deducted uniform and training expenses from those staff. It was found that it underpaid staff by £45,000. 

With everything that has happened within the hospitality sector many employees are nervous and worried about how the following months will progress. Some have even experienced animosity and have already suffered from abuse in only the few days since pubs are reopened. Many have voiced their concerns about the industry from some not feeling valued to others worried about their safety since the reopening of venues. While owners, such as Stefan King’s G1 Group and Tim Martin’s Weatherspoon’s are becoming increasingly concerned about local resurgence’s of COVID-19 which could force the closure of some venues. 

The hospitality industry is becoming increasingly fragile due to the discontent brewing between the directors and the minimum wage employees. The lack of respect some members of the public feel for those in employment do not help in strengthening the appeal that ‘we are all in the same boat’. However ultimately if a second wave does occur as a result of the opening of the sector it will occur as a result of public ignorance rather than mass mismanagement.

Featured Image Credit: Wikimedia Commons

The hospitality sector is being strangled by the Coronavirus pandemic.