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Redundancy by sectorHospitality redundancy: your rights, pay and settlement agreements
Redundancy pay for casual and seasonal hospitality staff, insolvency claims and how settlement agreements resolve hospitality sector disputes.
Hospitality covers hotels, restaurants, pubs and events businesses, and employs large numbers of staff on seasonal, casual or variable-hours contracts, which makes redundancy calculations more complicated than for employees with fixed salaries. A week's pay for staff without regular hours is based on an average of recent earnings, and seasonal closures or reduced trade can sometimes be confused with redundancy when they are not. Hospitality businesses are also more likely than average to face insolvency during downturns, in which case employees claim statutory redundancy and related payments from the government's Redundancy Payments Service. Settlement agreements are used for individual exits, management roles, and to resolve disputes such as unpaid tips or disputed dismissals.
Key points
- A week's pay for casual or variable-hours hospitality staff is based on an average of recent earnings.
- Quiet trading periods or seasonal closures are not the same as genuine redundancy.
- Hospitality businesses face higher-than-average insolvency risk, which can route claims to the Redundancy Payments Service.
- Disputes over tips or service charge distribution sometimes accompany a hospitality redundancy settlement.
Settlement agreements in hospitality
Settlement agreements in hospitality are used for individual exits, particularly at management level, and to resolve disputes that sometimes accompany a redundancy, such as disagreements over tips or the fairness of the selection process. Where a hospitality employer becomes insolvent, a claim to the Redundancy Payments Service is usually the relevant route rather than a negotiated settlement. As with other sectors, an agreement is only binding once independent legal advice has been obtained, normally paid for by the employer.
Been offered a settlement agreement?
If your hospitality employer has offered you a settlement agreement as part of a redundancy, we will review it the same working day and tell you honestly whether the offer is fair. Free to you when your employer pays our fee, which is the case in nearly every UK settlement agreement.
Hospitality redundancy: frequently asked questions
Am I entitled to redundancy pay if I work casual hours in hospitality?
Yes, if you meet the general qualifying conditions, including two years' continuous service, casual or zero-hours staff can be entitled to statutory redundancy pay. The calculation uses an average of your recent earnings rather than a single week, since your hours are not fixed, so it is worth checking how that average has been worked out.
Is a quiet season the same as being made redundant?
No. A genuine redundancy requires a real reduction in the need for your role or the closure of a business or site, not simply reduced hours or trade during a quiet period. If your hours are cut without a genuine redundancy situation, this may raise separate issues worth discussing with a solicitor.
What happens to my redundancy claim if my employer goes into administration?
If your hospitality employer becomes insolvent, you can usually claim statutory redundancy pay and other sums such as unpaid wages and holiday pay from the government's Redundancy Payments Service rather than the employer directly. This is a separate process from a normal redundancy negotiation and is subject to statutory limits.