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by Kirsteen Paterson
28 February 2023
Scotland's hospitality sector is waiting for change

Scotland's hospitality sector is waiting for change

In November, staff at one Scottish luxury hotel won almost £140,000 in withheld tips. The following month, Scotland’s largest council adopted a policy backing the Get Me Home Safe campaign, which calls on employers to cover transport costs for night-time workers.

Staff at Cameron House, by Loch Lomond, said the tips were “the difference between us being able to make ends meet on a minimum wage job and not”. A spokesperson for the resort said it is “committed to always doing what is right” and will “continue to collaborate with” its “valued team members”. Meanwhile, members of Glasgow City Council unanimously passed a motion endorsing the need for a push on late night transport provision, and committing the local authority to taking action.

Those developments followed high-profile campaigns by hospitality staff claiming their bosses were letting them down on pay and conditions. In a year marked by a resurgence in public sector trade union action, the private sector hospitality workforce also became more organised and more vocal, and there are moves in Westminster and Holyrood to change laws and benefit staff. The UK Government’s Employment (Allocations of Tips) Bill will ban employers from keeping tips back from the staff who earned them, while Green MSP Maggie Chapman is preparing a Members Bill that would require hospitality venues to lay on transport to get workers home from late shifts, building on the Get Me Home Safely campaign sparked by the sexual assault of Caitlin Lee as she made her way back from a city centre hotel.

But as the cost-of-living crisis squeezes takings across Scotland’s pubs, cafes and hotels, employers are under pressure. Will localised gains in individual disputes lead to wider change on the menu in a trade too often associated with insecure work, low pay, and poor conditions, and what will this mean for the health of one of Scotland’s biggest sectors?

Around one in every ten jobs in Scotland is in hospitality, which generates £5bn in GVA – Gross Value Added – for the economy. Amounting to more than three per cent of the onshore economy, that is a higher share than in the rest of the UK. In the Highlands, 13 per cent of jobs are in hospitality, and it makes up as much as ten per cent of economic output in the “Lochaber, Skye and Lochalsh, Arran and Cumbrae and Argyll and Bute” part of the region.

It was also “by far the hardest hit sector during the first lockdown”, the Scottish Parliament Information Centre (Spice) says, with economic output falling by as much as 85 per cent between February and May 2020. While output has now returned to pre-pandemic levels, it has only done so recently and the number of jobs lost – 50,000, or 23 per cent of the overall headcount – has not. 

There could be tough times ahead

According to the Office for National Statistics (ONS), hospitality vacancies per 100 jobs outstripped any other sector last summer, and that was as it began to absorb the impact of rocketing energy prices. Three in five firms interviewed for the Scottish Government Business Insights and Conditions Survey in May last year said ever-growing charges had hit their production, supply or both, making it the sector hardest hit by the issue.

“The data suggests that there could be tough times ahead for the hospitality sector,” Spice said. “With record vacancy levels in this labour-intensive sector and more than half of hospitality businesses already reducing hours, pressure on existing staff could increase in already stressful working environments.”

Industry leaders are working on attracting more people to the sector. The UK-wide Hospitality Rising multi-channel campaign tells jobhunters to “rise fast, work young” and takes its inspiration from British Army recruitment drives. It aims to change the perception of the industry to make it more appealing, and is backed by a coalition of businesses including the Hilton chain and Scotland’s DRG (Di Maggio’s Restaurant Group). At the time of its launch in October, there were 30,000 unfilled positions in Scotland. 

“We need to work hard in this country for hospitality to be as respected a job, career, life choice as it is in the USA, Italy, France, Greece and Spain,” said founder Mark McCulloch. “It’s going to take a long time for perceptions to change,” the ex-Pret a Manger marketing executive told BBC Scotland.

Those perceptions are also highlighted in the Scotland Outlook 2030 national tourism strategy. Launched three years ago, the strategy presents hospitality as key to the country’s offering to visitors, and says that while there is “a wealth of good practice happening across our industry that can be shared... the perception and indeed reality of poor conditions and low pay needs to be overcome to deliver a world class tourism product and our vision of 21st century tourism”.

That all came before this month’s ONS figures which revealed that the use of zero hours contracts is on the rise in Scotland again, having doubled within a decade. Overall, 94,000 such contracts were in place in the last quarter of 2022, a rise of 9,000 within one year. And the industry with the largest share? Hospitality. 

The ONS Labour Force Survey reveals a marked decline in the number of those classed as “economically inactive”, with almost 89,000 more people in the labour force and pay rising at the sharpest rate for more than 20 years – but remaining under the level of inflation. The use of zero hours contracts is also up for the UK as a whole, and the average number of hours worked per week for those on them has slipped down to fewer than 23.

Trade union organisers in Scotland say they’re seeing and hearing more from hospitality workers about having their hours reduced, or cut at the last minute. Tam Wilson, organiser with the STUC’s Better Than Zero campaign, which aims to end “exploitative” work, also says unpaid “fake trial” shifts are on the rise again in pubs, clubs and restaurants.

“People will be asked in for a trial shift on a busy Friday night but the job will never materialise,” he says. “It’s something we were dealing with years ago and we are now seeing more of again.”

There’s a “powerlessness” that comes with precarious employment, he says, from late rotas to eleventh-hour shift cancellations, that must be challenged. “People come to us in desperation,” he goes on. “It’s often very defensive and protective.

“There’s a squeeze on everything just now,” he says about the impacts of inflation. “A lot of places were reliant on unsustainable conditions for workers anyway. A further squeeze will have an impact on what they can offer, but where the model was unsustainable, that has been further exposed.”

“You can’t recruit or retain hospitality workers for love nor money,” says trade union organiser Bryan Simpson of Unite Hospitality. He wants to see employers implement Unite’s Fair Hospitality Charter, guaranteeing a real living wage for the lowest-paid staff, paid rest breaks, minimum hours contracts and full payment for trial shifts, as well as the introduction of an anti-sexual harassment policy and paid transport home after midnight. None of it, he says, is “particularly radical or groundbreaking, but it would make a huge difference to workers”. 

“Why not say, we are different, and set yourself out as one of the better employers in Scotland?” he asks. “This is an opportunity.”

We warned it wouldn't be economically viable for many outlets to remain open

However, it is an opportunity that some employers may argue they cannot currently afford.
The Scottish Licensed Trade Association (SLTA) says many operators cannot now open across their full regular hours due to rising staff and energy costs. Almost half of its members had experienced energy bills increasing by more than 250 per cent, its managing director Colin Wilkinson said in January, and members are “concerned” about the impact of forthcoming changes like the Scottish Government’s deposit return scheme (DRS) and proposed alcohol advertising sponsorship restrictions. 

“Half of outlets were still in decline” over the festive period, compared with pre-pandemic trade, Wilkinson said, and there is an “urgent” need for local and national governments to support the sector and associated jobs in wholesaling, brewing, distilling and food-production.

“We previously warned that it wouldn’t be economically viable for many outlets to remain open and we are now seeing this come to fruition,” he said.

Simpson says workers’ representatives are not unsympathetic to the positions of employers. “It’s something we have to consider,” he says. 

“If an employer says they can’t afford to implement the real living wage, but they want to do so, and they’re telling us they can look at this within the next six to nine months, then we’re not going to say no to that. But it doesn’t mean we dilute our demands.”

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