By Kunal Sawhney, CEO of Kalkine (www.kalkine.co.uk)
The government recently proposed that the lowest-paid workers in the country will get the flexibility to boost their income through extra work. The proposal is to expand the ban on exclusivity clauses, which earlier were restricting staff from working for different employers to contracts where the guaranteed weekly income was equal to or less than the Lower Earnings Limit (£123 per week for 2022/23).
As per the government estimates, around 1.5 million low-paid workers, earning equal to or less than £123 a week will get the most out of the widening, with choice over where and when they want to work as per their personal situations. It will also provide the option of working various short-hour contracts.
Benefits of the ban on the widening of exclusivity clauses
It is not only hospitality, but all the industries facing the recruitment struggles at present are likely to benefit from the reform. It will provide the workers with an opportunity to top up their income if they want to. Also, they will have the flexibility to adjust to their day-to-day personal considerations.
For businesses, the ban on the widening of the exclusivity clause is going to expand the talent pool, with many applying now who were earlier excluded and were stuck with one employer. It will help hospitality to fill vacant positions early and give the confidence to create jobs as per the requirement and prevailing circumstances. The government has also said that the move will help remove unnecessary red tape and allow workers to keep more of their earnings.
Government’s other support for workers
The government has been doing its bit to support the workers struggling with the cost of living crisis and had earlier announced the largest ever increase in the National Living Wage to £9.50 per hour, which resulted in an extra around £1,000 a year for almost 2.5 million full-time workers from April 2022. The government has also cut taxes for the workers on Universal Credit that put an additional £1,000 back in workers’ pockets.
Hospitality industry and its struggle with staff shortage
There has been an unprecedented rise in the worker shortages in the UK hospitality industry due to Brexit, and covid, which has exacerbated their existing struggles to remain afloat. Still, many have been forced to close temporarily to ensure the survival of their businesses.
A recent ONS report has highlighted that there were around 164,000 hospitality vacancies between January and March 2022 in the UK. Hotel, pub, and restaurant businesses are not getting people despite offering incentives and lucrative bonuses. It has been a big concern as many young people were unwilling to go into the industry, especially at a time when the pent-up demand has led the restaurants and hotels to run at high occupancy.
Final thoughts
The government’s decision of including those earning less than £123 a week in the reform is indeed going to help industries like hospitality and retail. The legislation for the reforms will be laid before Parliament later this year but before that, hospitality would also have to do some internal reforms, it has been pointed out that the prevailing culture in hospitality is one of the major reasons for the rise in staffing shortages, like very long working-hours and low wages, which has been driving people away from taking a job in hospitality. New workers joining the hospitality industry would have to be tackled carefully so that the government reforms do not go against the industry.
