Recommendations for the Hospitality Industry

Levers and Recommendations

The Fair Work Convention commissioned research on potential levers to support fair work within the hospitality industry. It was conducted by a team of researchers at Strathclyde Centre for Employment Research (SCER) and it considered what tools or mechanisms state actors have to support fair work across the economy and in hospitality. The research looks beyond existing fair work conditionality, such as Fair Work First, and considers approaches to encourage and support the further adoption of fair work practices. The researchers also conducted a range of interviews with hospitality organisations to understand their views on proposed levers.

The SCER research framed the approach of government to leveraging fair work by drawing on Hood and Margett’s (2007) NATO approach, where governments can use Nodality – their position of influence in networks; Authority – their regulatory power; Treasure – the use of government resources; and Organisation – human and organisational assets available to government (Findlay et al, 2024).

The table below, taken from the research, identifies the range of levers considered by the mechanism of policy influence. The colour coding system identifies strong stakeholder support (green), mixed stakeholder support or a limited range of views (amber) and limited stakeholder support (red) (Findlay et al, 2024).

Table 12 - Potential levers to support fair work in hospitality
Potential policy levers by mechanism of influence
Authority Treasure Nodality Organisation
Targeted awareness campaign Further conditionality Development of accredited fair work training Business support, tools and diagnostics
Embedding fair work in employability provision Strategic joint capacity investments Support for fair work charters Support for a fair work hub
Support for Real Living Hours – minimum number of hours Support for formal fair work accreditation – externally monitored
4 weeks notice of schedule change
SG, public sector/ body and ILG fair work champions Support for fair work communities of practice

Source: Findlay et al, 2024

The SCER research concluded that no single policy lever on its own was likely to effect significant change, but that combinations of levers had potential to enhance fair work in the industry. The research also found that the hospitality stakeholders interviewed made three specific requests of policymakers:

1. To develop a more positive and forward focussed narrative about the industry.

2. To provide fiscal relief or incentives to deliver fairer work.

3. To work with the industry to drive improvement – to co-produce tailored solutions rather than to rely solely on ‘carrots and sticks’. (Findlay et al, 2024)

It is important to note that an awareness raising campaign on fair work, developing a resource hub on fair work and road shows to share good fair work practice have already been agreed as actions by the Tourism and Hospitality Industry Leadership Group (THILG). The proposals below are designed to complement these agreed actions, and by drawing on the research findings, aim to give a robust framework of support to fair work in hospitality.

A Fair Work Agreement for Hospitality

The terms of reference for the Inquiry included considering the use of Fair Work Agreements to promote the voluntary adoption of fair work practices in hospitality. A Fair Work Agreement is an agreement between employers, employer bodies and unions to work together to advance fair work in an industry. To have meaningful impact, a Fair Work Agreement requires buy-in from employers, employer bodies, unions and ultimately workers across the industry in question. Fair Work Agreements also need to be effectively supported by Government to facilitate progress and to provide additional resource and capacity within the industry. The Inquiry has identified a range of recommendations that taken together would constitute a Fair Work Agreement for hospitality.

The recommendations focus on capacity building and providing support for employers and workers, so that they can work together to improve fair work outcomes within their organisations. Fair work can be a tool to improve recruitment and retention of staff, while also improving productivity, innovation and positive relations at the workplace.

While businesses face a range of challenges and pressures which may limit how readily they can apply measures (particularly those that have an immediate cost impact) fair work is based on a philosophy of joint working and positive relationships between workers and employers and therefore many key elements of fair work can be applied without significant cost to the business. Despite this, some funding from Government to support fair work training, and to build structures across the industry will be necessary, and employers will need to recognise the value of fair work and invest in fair work business models.

To deliver fair work, employers across the industry need to build on what they are already doing well and identify areas for improvement. A key way to achieve this is to learn from the practice of other businesses in the sector, and to strengthen effective voice in their workplace. Ultimately, focussing on continuous improvement will support strong and resilient businesses for the future.

Taking these issues into account, the Inquiry makes the following recommendations.

Building Communities of Practice

Recommendation 1: The Scottish Government should fund two fair work coordinator posts, one embedded in the secretariat of the Tourism and Hospitality Industry Leadership Group (THILG) to support employers and one in Unite the Union to support workers.

Fair Work Champions

Recommendation 2: The Fair Work Coordinators in the THILG and Unite the Union should work with employers and workers in the sector to develop a network of Fair Work Champions and Effective Voice Champions. This will require businesses in the hospitality sector to actively support the creation of these roles.

Recommendation 3: A member of the THILG should be appointed Fair Work Champion. The main purpose of this will be to champion fair work through the work of this key industry leadership structure, to provide strategic profile and drive the industry’s commitment to adopting the highest levels of fair work practice.

Developing Accredited Fair Work Training

Recommendation 4: The Scottish Government should support CIPD, CMI and SQA to develop an accredited training scheme for senior managers. This training scheme should be undertaken by all managers who are acting as Fair Work Champions. The Scottish Government should also support Scottish Union Learning and TUC Education to jointly provide bespoke online fair work awareness training for hospitality workers. This training should be undertaken by all Effective Voice Champions. Both types of training should be developed with input from the THILG and the Fair Work Convention and should take into account the context of the industry in the design of how the training is accessed and undertaken.

Fair Work Charter for Hospitality

Recommendation 5: The members of the THILG, being mindful of the need to balance union and employer representation, should work together to create a single Fair Work Charter for hospitality businesses. This could be taken forward through an existing or bespoke sub-group if appropriate. It is envisaged that this charter should be voluntary, allowing employers to demonstrate their general commitment to fair work. Adopting the charter can be used to provide useful evidence within fair work conditionality but does not replace other requirements around the Real Living Wage or effective voice that may be included. Based on the findings of this Inquiry, the Fair Work Charter for Hospitality should at a minimum cover the following issues:

The SCER research on levers to promote fair work in hospitality noted that for charters to be effective there must be oversight of how the provisions are applied. While there are a range of industry charters in existence there is still a need for a bespoke fair work charter because existing charters do not cover all parts of the industry in Scotland, they often have limited coverage of fair work issues, they are not co-produced with workforce stakeholders and they often have very limited oversight provisions. The research identified that greater worker engagement with charters and joint employer-union charters, were particularly valuable approaches to build in mechanisms of joint enforcement as a way to achieve this effectively while also avoiding the costs associated with external monitoring. (Findlay et al, 2024)

It is therefore crucial for the charter to have an effective dispute resolution model. In the case of a dispute where staff members believe that elements of the charter are not being upheld, the charter should allow a case to be heard through the dispute resolution process. This will involve setting up a panel which includes a balance of both employer and trade union members involved in the THILG. This panel will consider the issue(s) raised and should seek effective resolution in the first instance. Where resolution is not possible, and where the panel finds a breach of charter commitments has occurred, the panel could recommend removing the business as a charter member. Where the business is part of a larger chain, this process will apply only to the business where the issues have arisen. In exceptional circumstances, the panel may decide to remove accreditation from the whole chain if there is evidence to suggest the failings are significant and systematic across the whole chain.

Providing Positive Support for Change

Recommendation 6: The Scottish Government should make a dedicated fund available for hospitality businesses to support the adoption of fair work practices. This funding stream should not have fair work conditionality attached to it as it is designed to support the adoption of fair work practices and build capacity in the sector. This approach supports the use of wider conditionality in the industry as it provides support to those who need to make significant change to become eligible for wider funding streams. This proposed Fair Work in Hospitality Development Fund could be used to:

Review and Renewal

Recommendation 7: The THILG, or an existing or bespoke sub-group should, after a period of five years, review the Fair Work Agreement to understand how well it is embedding fair work in the industry from the perspective of both employers and workers. It should then make any amendments that it believes are necessary to continue to advance and embed fair work effectively within the hospitality industry.

Further Recommendations

Recommendations 1-6 together make up a Fair Work Agreement and therefore require buy-in and support from hospitality employers, employer bodies, unions and workers, along with dedicated funding and support from the Scottish Government, for the work to progress effectively. Recommendation 7 is designed to support ongoing oversight and renewal of the Fair Work Agreement and the adoption of fair work practices which are increasingly designed, owned and embedded within the industry over the longer-term. The following recommendations identify further work that the Scottish Government or the THILG should undertake to support and underpin fair work in the industry in wider terms.

Taxation

The Inquiry noted that there was significant concern amongst employers in the industry on how hospitality was taxed, with a desire to see taxes fall. There was also a desire amongst some of the Inquiry members to provide additional supports and incentives to employers who were investing in fair work and were delivering some key fair work measures like payment of the Real Living Wage. It should be noted that this was not a view shared by all Inquiry members with some members clear that reducing the cost of doing business across the board, and without reference to fair work, should be the key priority. These views were similar to views from stakeholders within the SCER research on levers. Some felt that conditionality rewarded businesses already delivering fair work, while others felt that fair work conditions should help businesses more on their journey to fair work, that is, by putting them in the position to deliver fair work more effectively. The research also noted stakeholder views that fair work conditionality is currently a substantial driver of improved practice in hospitality, with employers adopting fair work practices to access support, for example, from public agencies (Findlay et al, 2024).

Significant discussions are ongoing with the industry around potential changes to how non-domestic rates and other taxes apply in hospitality. These discussions should also consider if further conditionality is possible. This conditionality would incentivise and support existing fair work practice, while the work undertaken with the Fair Work Agreement supports employers to make changes to their working practices and/or business model and adopt fair work.

Recommendation 8: When considering issues of taxation for the hospitality industry, the Scottish Government should consider if any fair work conditionality can be applied. This conditionality should aim to provide an additional tax incentive or relief for employers who pay at least the Real Living Wage and provide effective voice mechanisms to all workers.

Rural Businesses

The Inquiry noted the additional costs and pressures that impact rural businesses and the key role that hospitality businesses can play as anchor employers in rural areas. The specific challenges around housing, transport and childcare all had clear fair work impacts. It was also clear that these were deep-rooted issues that the Scottish Government, Local Authorities, Enterprise Agencies and other community actors have sought to tackle over a number of years, and significant focus already exists on improving the underpinning infrastructure in rural areas. Recommendations in this section are designed to acknowledge the specific value of rural hospitality employers and to recognise the unique challenges they face, building on good practice that already exists.

Recommendation 9: The need to provide accommodation for workers creates significant additional costs for employers and clear fair work issues for workers associated with housing tied to their job, which does not support family life in the longer term. The Arran Development Trust has created a useful model for increasing the housing available in an area. The Scottish Government, working with Enterprise Agencies and Local Authorities in rural areas, should aim to replicate this approach in other communities. Ultimately, increasing the supply of affordable housing is key to underpinning fair work in rural economies.

Recommendation 10: There are a range of issues for hospitality businesses in rural areas that are distinct and rural businesses in hospitality would benefit from having a forum to explore these fully. The THILG should create a dedicated rurality sub-group to consider the specific needs of rural businesses, including on fair work issues.

Health and Safety

The Inquiry noted that health and safety standards within some parts of the industry could be improved, especially given that rates of workplace injury in accommodation and food services was the third highest of all sectors. Conversations with Environmental Health Officers suggested that the level of proactive inspection on health and safety issues had significantly reduced and, in line with wider health and safety policy, inspections were now primarily in response to incidents. This means that employers no longer receive ongoing support or advice on how to maintain standards or to prevent accidents.

Recommendation 11: The Scottish Government should seek to support improved funding for Environmental Health provision within Local Government and work with Local Authorities to ensure more proactive health and safety inspection, particularly for hospitality businesses.

Supporting Disabled Workers

Supporting disabled workers into employment and lowering the disability employment gap is a key commitment for the Scottish Government. Hospitality already plays an important role in supporting employment for disabled workers, and the Inquiry noted good provision within social enterprises in hospitality in this regard. The Inquiry also heard evidence from employers on specific work that they have done to support disabled workers, particularly those with learning difficulties. With businesses facing skills shortages and high staff turnover, improving diversity and inclusion is a clear business benefit, and makes a positive contribution to equality outcomes for people in Scotland. This work will also positivelyÏ support the reputation of the industry.

Recommendation 12: The Scottish Government should include within its wider fair work funding, support for hospitality businesses to create and sustain employment opportunities for disabled workers, particularly those with learning difficulties. Employability funding should continue to support disabled workers into employment and should aim to support workers into hospitality businesses where employers are engaging effectively with fair work structures and the recommendations of this Inquiry. The work of the Fair Work Coordinators (Recommendation 1) should also provide ongoing help and support for both employers and disabled workers, facilitating the sharing of good practice, and positive and supportive management practices, in line with fair work.