The new ‘three-tier traffic light’ system

Following the Government’s recent introduction of the new tier restrictions (medium, high and very high), a number of new coronavirus local lockdowns have sprung up across the UK.

Pub or restaurant?

As part of the new tier 3 rules, restaurants can remain open but pubs must shut. Pubs that can operate as a restaurant serving “substantial meals” can remain open.  This unsurprisingly, has led to a lot of confusion within the pub industry. What counts as a substantial meal? Whether your outlet can stay open or not will also impact on the financial help you can claim from the Government under the new Job Support Scheme (JSS).

What is a substantial meal?

The reference to “substantial meals” has been borrowed from licensing law which permits alcohol to be purchased by/for 16 and 17-year olds for them to drink on the premises with a “table meal” which the licencing legislation notes “might be expected to be served as the main midday or main evening meal, or as a main course at either such meal”.

Some years ago, in the case of Timmis v Millman, two gentlemen were permitted to continue drinking as the sandwiches the pair were eating “were so substantial, and assisted by the pickles and beetroot so as to justify that it was a table meal and not a mere snack from the bar”. This case, and the above licencing legislation, helps to clarify that snacks are not enough to be classed as substantial.

On 13 October, Housing Secretary Robert Jenrick described a substantial meal as “a main course, rather than, say, a packet of crisps or a plate of chips.” He also indicated a Cornish Pasty could become a meal if it was paired with a side salad or chips.

The reference to substantial meals is well versed in the licensing world and there will be many operators that already have a condition on their licence limiting the sale of alcohol to the provision of substantial food. However, for those premises without such a restriction it’s now more important than ever.

Planning regime

What Use Class premises fall within has been a long running question in planning law with a blurred line between what was “A3” and what was “A4”.  The Use Classes system was overhauled in September so that the:

  • Old “A3” (restaurants and cafes) now falls within in Class E; and
  • Old “A4” (drinking establishments) now is Sui Generis.

Whilst explicit reference on an old planning permission to “A3” (restaurants and cafes) would practically be helpful background regarding the new restrictions, we consider that the licencing regime is the determining factor.

Impact on Job Support Scheme

The Government will introduce the new Job Support Scheme (JSS) with effect from 1 November 2020.  The aim is to encourage shorter working hours and thereby reduce the number of redundancies needed. This scheme will top up wages where an employee is in work by paying them for some of their unworked hours.

The Government has also announced that there will be an extension scheme for businesses (including pubs and bars) forced to close because of Covid restrictions i.e. in a tier 3 restriction area. This extension will only be available if the pub or bar in a tier 3 restriction area cannot serve a substantial meal and is forced to close.

This leaves the following situation :

Restaurants and pubs in tier 1 and 2 and restaurants that remain open in tier 3 may be eligible to claim under the JSS as follows:

  • You pay the employee for the hours they work (the employee must work a minimum of 33% of their usual hours of work to be eligible for the scheme).
  • Where an employee agrees to a reduction in hours, you and the Government will each pay a third of the employee’s unworked hours and the employee will forego the final third of their wages for the unworked hours
  • Example If a chef usually works 30 hours per week and agrees to reduce their hours to 18 hours per week you will pay them for the 18 hours they work plus a further 4 hours of the unworked hours. The Government will pay them for 4 hours of the unworked hours and the employee will agree to forego their pay for the remaining 4 unworked hours. The Government’s contribution is capped at £697.92 per month.

Pubs in tier 3 that are legally required to close will be able to claim two-thirds of the normal pay of each eligible employee up to a maximum of £2,100 per month from the Government under the JSS extension scheme. The employer will not be required to contribute to this but will still need to pay Employer’s NI contributions.

This raises several questions about whether your outlet can serve food and whether or not it is legally required to close.

How will it be decided if your pub can or cannot serve food? No guidance is yet available on this point. If your pub has a kitchen but you have made your chef redundant for example, is the “potential” for serving food enough to mean you are not forced to close and would not therefore be eligible for the JSS extension?

Our team can help you navigate the impact of the new three tier system and JSS on your business.  For further information please contact Lisa Gilligan or Christopher Sing.

The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.