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The hospitality industry has been under serious pressure in recent months with high food inflation, rising energy costs and recession-scarred consumer spending.
In these challenging times it is important for the hospitality industry to keep on top of recent developments – it's the best way of managing costs and realising opportunities.
Recent legal developments include changes to the law on cookies, agency workers and bribery.
Cookies
In this context a cookie is sadly not an edible treat, but a small file that a website puts on a user's computer to remember the user's preferences. They are commonly used by hospitality businesses for a variety of reasons – e.g. to remember customers' payment details when they make a subsequent booking, or their preferences when it comes to booking accommodation.
Following the introduction of European privacy laws in the UK (the Privacy and Electronic Communications Regulations 2003 (PECR)), the law on cookies changed with effect from 26 May 2011. A user's informed, positive consent is now required if you want to store a cookie on the user's computer or other device. (Previously, it was acceptable to tell users how they could "opt out" if they objected, which was commonly done through a privacy policy.)
The Information Commissioner's Office (ICO), which is responsible for privacy complaints, accepts that this is a significant change for businesses to manage. The ICO is therefore giving businesses up to one year to get their house in order. If, however, businesses do not take action towards compliance with the PECR, the ICO will take that into account when starting enforcement proceedings from May 2012. The ICO can impose a fine of up to £500,000 for serious breaches of the PECR, and it has increased powers to investigate suspected breaches.
All website operators will need to decide which method of obtaining users' consent for cookies is appropriate for their website. They will also need to set a compliance policy for third-party users of their website (e.g. advertisers) who may themselves set cookies on the user's computer.
Agency workers
The Agency Workers Regulations 2010 came into force on 1 October 2011 and affect all businesses that use employment agencies to supply them with agency workers (e.g. temporary waiters and bar staff). The Regulations provide qualifying agency workers with the same "basic working and employment conditions" that apply to those ordinarily enjoyed by the hiring employer's comparable staff. Those conditions can include pay (including certain bonuses and allowances), duration of working time, rest periods and annual leave, but not sick pay, notice rights or redundancy pay, nor the majority of benefits in kind (such as health insurance).
To avoid the Employment Tribunal claims that qualifying agency workers can bring for breach of the Regulations, all business that use agency workers should start considering the cost and impact of the Regulations.
Workers cannot contract out of the Regulations, which include anti-avoidance provisions that are designed to prevent businesses from deliberately structuring their assignments so as to avoid workers’ protections. There may, however, be opportunities for businesses to implement alternative plans to cover temporary resourcing needs.
Please see our more detailed bulletin for further information.
Bribery Act
The Bribery Act 2010 came into force on 1 July 2011. Among other things, the Act makes it a criminal offence for any person:
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to offer, promise to give, or give a bribe (active bribery); or |
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to request, agree to receive, or accept a bribe (passive bribery); or |
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where the person is a commercial organisation, to fail to prevent bribery by an associated person for the organisation's benefit (the corporate offence). |
In the hospitality sector, giving free or lavish hospitality could constitute a bribe – e.g. if it is given to secure future business from a customer, or to encourage a supplier to write off an invoice or to change the supplier's payment terms.
The first proceedings to be brought by the Crown Prosecution Service under the Bribery Act will begin later this month, proving that the Act does have teeth. All businesses should have policies in place to minimise the risks of fines or criminal prosecution in this area.
If you would like further information on any of the issues raised in this bulletin, or to discuss how they may affect you, please contact Caroline Copeland.
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