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Hospitality and leisure sector considerations during Coronavirus - 13 May 2020

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Hospitality and leisure sector considerations during the Coronavirus outbreak

The Coronavirus outbreak which has rocked the country is probably hitting the hospitality and leisure sector the hardest and the earliest. Restrictions on large gatherings such as football matches came first quickly followed by a request for the public not to attend pubs, restaurants and theatres eventually leading to bans on hospitality and leisure facilities being open.

However, there are still opportunities for some businesses in the hospitality and leisure sector and there is a package of support available to help businesses through this difficult time. Whilst some have questioned whether it will be enough it is at least a start.

At Fieldings Porter we are here to support our hospitality and leisure clients with their legal queries and have put together a few pointers below on what our clients are required to do and the opportunities and support available to them. If you have any questions, please contact our Commercial Team to discuss further.

Does my business have to close?

Most hospitality and leisure sector business do have to close, but not all.

The legislation introduced on 26th March 2020 in England (Wales and Scotland announced similar restrictions) being the The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 (as now amended) was amended on 13th May 2020 following the first round of relaxation and now gives the position as is now in force for all the businesses affected.

The rules specify hospitality, leisure and service premises that must close to the public are as follows:

  • Cinemas;
  • Theatres;
  • Nightclubs;
  • Bingo halls;
  • Concert halls;
  • Museums and galleries;
  • Casinos;
  • Betting shops;
  • Spas;
  • Nail, beauty, hair salons and barbers;
  • Massage parlours;
  • Tattoo and piercing parlours;
  • Skating rinks;
  • Indoor fitness studios, gyms, swimming pools, bowling alleys, amusement arcades or soft play areas or other indoor leisure centres or facilities;
  • Funfairs (whether outdoors or indoors);
  • Playgrounds, indoor sports courts and outdoor gyms;
  • Outdoor markets (except for stalls selling food);
  • Car showrooms;
  • Auction Houses;
  • Businesses consisting of the provision of holiday accommodation, whether in a hotel, hostel, bed and breakfast accommodation, holiday apartment, home, cottage or bungalow, campsite, caravan park or boarding house

The following premises must also close unless they are providing products and services for consumption off the premises:

  • Restaurants, including restaurants and dining rooms in hotels or members’ clubs.
  • Cafes, including workplace canteens (save for workplace canteens which may remain open where there is no practical alternative for staff at that workplace to obtain food), but not including the following which may stay open—
    • cafes or canteens at a hospital, care home or school;
    • canteens at a prison or an establishment intended for use for naval, military or air force purposes or for the purposes of the Department of the Secretary of State responsible for defence;
    • services providing food or drink to the homeless.
  • Bars, including bars in hotels or members’ clubs.
  • Public houses

It is of note that there is an extension of the definition of premises for the purposes of sales for consumption off premises in this legislation which means that the food and/or drink cannot be sold for consumption off the premises where seating is made available for customers of the business (whether or not by the business) in an area adjacent to the premises. This means that care will need to be taken if there is public seating, beer gardens etc.

Are there any circumstances when a hotel, hostel, bed and breakfast accommodation, holiday apartment, home, cottage or bungalow, campsite, caravan park or boarding house can stay open?

There are exceptions which allow accommodation providers to stay open. They are limited in nature but do provide a potential opportunity for business owners to continue to operate through the outbreak.

It is acknowledged that accommodation providers are not always just serving holiday makers and workers who are there for a limited period of time. As such exceptions to the rules have been made for those more long-term residents and for the use of the premises in ways which help the public effort to get through the pandemic. If your accommodation is being used for any of the following reasons you can remain open for that purpose, but only for one of the purposes below:

  • for any person, who —
    • is unable to return to their main residence;
    • uses that accommodation as their main residence;
    • needs accommodation while moving house;
    • are critical or key workers who have previously been eligible for their children to go to school (as defined in the “Guidance for critical workers who can access schools or educational settings”) who need accommodation  related to their work;
  • needs accommodation to attend a funeral;
  • to support services for the homeless;
  • to host blood donation sessions,
  • for any purpose requested by the Secretary of State, or a local authority from time to time.

What sort of purpose could by requested by the Secretary of State or local authority?

This exception is very broad and could bring anything into scope as long as it is with the agreement of the local authority or Secretary of State. We have seen examples of turning hotels into temporary hospitals or care homes, or for providing accommodation for key workers who are shielding from their family in order to maintain frontline services.

If you think you may be able to help in this way (or for homeless services) you should contact the local authority to see if they require your assistance. If you want to make your accommodation available for blood donation services you should contact NHS Blood and Transplant to see if they need your assistance. Should you need any assistance with any formal agreements for these purposes or ensuring you are complying with the rules please contact the Fieldings Porter Commercial Team.

If we choose to keep our accommodation open to serve those in the exceptional groups what checks should we carry out and records should we keep?

As it is an offence to carry out your business in breach of the regulations it would be prudent to request supporting information from any guests using your accommodation to support that they fall into one of the exceptions and ask them to sign a document confirming the same. You should then keep these records in case they need to be inspected by the authorities or you needed them to defend any action against you. You may need to vary your GDPR/privacy policies if keeping this information would be outside of the existing policy.

If you need any help reviewing your policies or ensuring compliance with the rules please contact the Fieldings Porter Commercial Team who would be happy to help.

Can we advertise that we are still open for business if we are operating within the exceptions?

There are no restrictions in law on advertising your accommodation services. However, given the current restrictions in place we expect that enforcement officers may check adverts to identify premises which are breaching the regulations. It would therefore be prudent to make it very clear that your accommodation is only available for those who fall into the specific categories you are accepting (those attending funerals, unable to return home, homeless etc) and that they will be expected to sign a declaration confirming their status and provide any proof etc.

If my accommodation premises remains open can I still provide food etc?

If your accommodation premises remains open under one of the exceptions above you can still offer a food service, however, you must operate a social distancing policy and keep the restaurant closed for consumption in the restaurant. You could offer a grab and go, take away or room service to comply with the rules.

If my accommodation premises remains open do we need to put any additional measures in place?

If your accommodation premises remains open under one of the exceptions you must adapt the way the premises is operated to ensure that the guidance from Public Health England is adhered to by both staff and guests. That will involve social distancing and potentially changing your way of working.

Can I open my restaurant or bar as a take-away service?

All bars and restaurants must close for consumption of food and drink on the premises. However, they are permitted to stay open for sale of food and drink off the premises. Takeaway services are actually positively encouraged in government guidance as it provides access to essential services for the public.

Amendments have been made to the planning rules allowing premises previously used as restaurants and cafes (A3) or drinking establishments (A4) to be used for the provision of takeaway food until 23rd March 2021. The legislation explains that takeaway food means any use for the provision of hot or cold food that has been prepared for consumers for collection or delivery to be consumed, reheated or cooked by consumers off the premises.

If you do want to take advantage of the changes in the planning rules you must notify the local planning authority is being used for takeaway food provision.

If you intend to sell hot food after 11pm you must have a premises licence which authorises this. If you already have a premises licence which authorises this then you can proceed. If you don’t you will need to apply for either a new premises licence or a variation to your existing premises licence.

If you want to sell alcohol off the premises you must have a premises licence that authorises sales of alcohol off the premises and you must adhere to any conditions on that licence. If you don’t have a premises licence or it only authorises alcohol sales on premises you will need to apply for a new licence or a variation to your existing one.

It may be possible to get up and running faster with licensing matters by using a Temporary Events Notice while your application for the main licence is pending.

This could therefore be an opportunity for some businesses to keep their presence and some revenue through the coronavirus outbreak which may help them come out the other side stronger.

Fieldings Porter’s licensing expert, David Darlington, would be happy to discuss your licensing options, check your compliance and guide you through any applications.

I was hoping to apply for a premises licence so my premises is ready to trade when the lockdown ends, can I still do that?

Licensing authorities are still carrying out their licensing functions during the lockdown and applications can be made for new licences, variations to existing licences and reviews of licences. If you want any assistance with this please contact David Darlington in Fieldings Porter’s Licensing Team.

If my business is no longer viable what happens to my premises licence?

If the holder of the premises licence dies, enters into a voluntary arrangement of its creditors, is made bankrupt, appoints an administrator, goes into liquidation or is dissolved the premises licence automatically lapses. There is then a 28 day window in which the licence can be transferred to another entity. If this does not happen the licence is then lost and a brand new application would be required by any new operator.

It is therefore very important to take early advice on this if you are facing difficulty as there is potentially commercial value in a licence as it removes uncertainty for an incoming operator.

Contact David Darlington in Fieldings Porter’s Licensing Team to discuss your options in more detail.

What can happen if premises don’t close in line with the regulations?

If premises remains open in breach of the regulations the local authority or the police can issue a prohibition notice and apply for a prohibition order to force the premises to close. The persons (whether individual or body corporate) who re responsible for the business commit and offence for which a fixed penalty or a Court Summons could be issued.

For licensed premises, a review of a premises licence could follow on the basis of failure to uphold the four licensing objectives as it could be argued that by breaching the regulations there is a failure to prevent crime and disorder, failure to protect public safety and potentially failing to protect children from harm. 

Should you receive a Court summons, fixed penalty notice or notice of a Licensing Review you can contact Fieldings Porter’s Licensing Team for advice on what to do next.

What help is available to assist businesses in the hospitality and leisure sector to survive during the lockdown?

There are a number of schemes launched by the government to support this sector of the economy. Our guide on What measures are available to help businesses through the Coronavirus outbreak? Gives more detail of the various scheme available but these include:

  • Business rates holiday for 2020/21 for hospitality, leisure and retail.
  • Business grants of £10,000 for each premises with a rateable value of under £15,000 and a grant of £25,000 for those with a rateable value between £15,000 and £51,000.
  • Amendments have been made to the statutory sick pay regime to cover some COVID-19 situations.
  • A furlough scheme has been introduced to help employers secure cash flow to keep jobs open throughout the coronavirus outbreak paying 80% up to £2,500 per month towards employee costs – this is currently until 30th June 2020.
  • Commercial tenants are protected from eviction through forfeiture until 30th June and measures are being introduced to avoid the issuing of statutory demands or winding up petitions until the same date.
  • VAT payments are deferred to 31st March 2021 for any payments originally due up to 30th June 2020.
  • A Bounce Back Loan Scheme for up to £50,000 has been introduced for small and medium sized businesses which is 100% guaranteed by government.
  • A Coronavirus Business Interruption Loan has been introduced for loans of up to £5m with an 80% government guarantee.
  • Time to Pay services are being offered for taxes in relation to businesses struggling to pay.

Should you need any guidance or legal assistance in navigating your business through the coronavirus outbreak please do not hesitate to contact Fieldings Porter’s Licensing and Commercial Team who will be happy to help.

13th May 2020