Coronavirus, hospitality and the law: What does it all mean?

Millie Milliken

Millie Milliken

23 March 2020

Lawyer Rishi Malliwal, partner at SGM Law, answers some of the big questions the hospitality industry needs answering due to the coronavirus crisis


'I keep hearing the phrase "rateable value". What does that even mean?'

This is the notional value of the property and is used to determine how much you need to pay for business rates. This value should be shown on your demand to pay business rates.

'My insurance doesn’t cover pandemics – what now?'

Depends what loss you hoped your insurance would cover. Business interruption cover only applies in quite limited circumstances. It is certainly worth checking the policy carefully yourself that it definitely does not apply. You might have to look at the various contracts you’ve signed to see if they contain 'force majeure clauses' which might excuse you from fulfilling your part of a contract.

You might also benefit from a legal concept called 'frustration'. If this applies, a contract could be terminated where a big change in circumstances makes it impossible to perform the contract or performance would be radically different. But frustration only applies in narrow circumstances and only offers limited remedies, so it needs to be assessed on a case-by-case basis.

'I’m an employee, what are my rights when it comes to contract suspension or redundancy?'

This depends on a variety of factors including your employment contract. Your employer will not automatically have the right to lay you off, but a temporary lay off might be better than being made redundant. The recent financial support measures announced by the government are designed to encourage employers not to make staff redundant and instead to put them on paid leave with the government paying up to 80% of their salaries limited to £2,500 per month.

'I’m a business owner and am in a position where I can continue paying staff. How can I safeguard them in the future?'

You should be able to take advantage of the recent measures announced by the government to pay up to 80% of salaries for staff who are put on paid leave rather than made redundant. Details for this new scheme are expected in the next week or so. It’s due to last for a minimum of three months, but the government has confirmed it will be extended if necessary.

'I need to start laying of staff both permanently and temporarily. What’s the most sensitive way of doing this and is there anything I can offer those people while they look for other work or until we reopen?'

Laying off staff permanently is technically a redundancy. This means you cannot benefit from the recent measures to support employers keen to keep their staff employed even when they are not working. If you need to lay off staff temporarily, you will need to check their employment contracts to see if you are allowed to do this. If the employment contract does not allow this, then you will need to agree these arrangements with your employees.

'I’m hoping to start running my business as a delivery service –are there any issues with doing that lawfully?'

You would need to check that you have the proper licences from the local authority to do this and that the premises you occupy also allow you to provide food for take away and not just consumption on premises.

'My landlord won’t negotiate rent with me – what now?'

This is a difficult one to answer. We’re getting quite a few clients enquire about this and they are looking at all sorts of options including just not paying the rent but this would be a breach of the lease and could cause other problems. The problems businesses are facing are truly exceptional and so people are having to take exceptional measures in response.

Got more questions? Send them to and we will endeavour to get them answered for you.

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