Check-in - May 2019
Written By
Of Counsel
UK
I am a member of the Real Estate Group at Bird & Bird. I have many years' experience in real estate transactions and I also lead Bird & Bird's international Hotels, Hospitality and Leisure team, specialising in the acquisition, development and disposal of all types of hotels, from budget to luxury and in the negotiation of hotel management agreements.
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Welcome to your quarterly newsletter from Bird & Bird's Hotels & Leisure team
We are delighted to share the second edition of Check-in - Bird & Bird's quarterly newsletter for Hotel & Leisure businesses.
The newsletter focuses on hot topics and legal developments impacting on various aspects of the sector. Each edition also features a Market Spotlight, where we provide insight into a particular international market, highlighting local trends and industry updates.
We are delighted to introduce a US Spotlight in this edition. This will become a regular feature of Check-in, contributed by the Hospitality team at Sheppard Mullin.
At the end of the newsletter, you can also find details of some of our upcoming events and recent news, which we think might be of interest to you and your team.
Please get in touch if you would like to discuss any of the issues raised in these articles, or visit our webpage for more information about Bird & Bird's Hotels & Leisure team.
US Spotlight: Guest article from Sheppard Mullin
Brexit
Ensuring your boilerplate clauses work effectively once the UK has left the EU
Examining the effectiveness of the boiler plate clauses in your commercial agreements is probably the last thing on your "let's get ready for Brexit" to do list, yet just spending a few moments thinking about these aspects of your commercial arrangements could save you time and more importantly money in the long term.
Is Brexit "frustrating"? The English High Court clarifies the application of frustration to lease contracts
Canary Wharf (BP4) T1 Ltd v European Medicines Agency [2019] EWHC 335 (Ch)
This English High Court decision upheld a lease held to the European Medicines Agency (EMA) for its London HQ and decided that Brexit would not "frustrate" the contract. Whilst this will come as a relief to landlords fearing an exodus of their tenants to Europe, unfortunately this case does not expressly answer whether Brexit could constitute a frustrating event in other contracts and turned on its specific facts. It is clear, however, that only very rarely will the discharge of a lease be possible using the doctrine of frustration.
Employment & Immigration
Good work for all - but what about worker status?
The Government's Good Work Plan, published just before Christmas, was full of gifts for Britain's workers, from a right to request a more predictable contract, to clearer and more transparent information for staff.
Given the range of ways in which individuals are engaged within the hotels sector, the Plan has a number of potential implications. Operators within the sector would be well advised to consider the proposals and recommendations set out in the Plan, and the corresponding implications for their particular structure and operations.
Operators should note that the Plan is short on concrete ideas when it comes to the critical issue of employment status and tax. This is especially conspicuous given the raft of tribunal and court cases in recent years, from Uber to Deliveroo, which have largely found that individuals working in the gig economy are being mislabelled and denied key legal rights.
France has introduced additional mandatory training obligations
France has increased training obligations for companies, including the obligation to hold an individual professional meeting with each employee to discuss their career evolution every two years, with sanctions for non-compliance. This may have practical implications for operators within the region.
Life post-Brexit - the EU Settlement Scheme and a unilateral Temporary Leave to Remain Scheme
Given the profile of staff within the hotels sector, operators should keep an eye on the fast-moving developments in applicable immigration arrangements in the context of Brexit.
The government has announced a unilateral Temporary Leave to Remain Scheme in a no-deal scenario (not to be confused with the EU Settlement Scheme). In recent times, it has been unclear how the UK Government was going to treat EU nationals who arrive after 29 March 2019, but before 31 December 2020, in a no-deal scenario. Such individuals do not qualify under the EU Settlement Scheme (as they will arrive after 29 March 2019, and will not have previously lived in the UK). That same group is also not subject to the new UK Immigration Rules for EU nationals (these are expected to be implemented from 1 January 2021).
The new scheme will entitle a migrant whose application is successful to 36 months of Temporary Leave to Remain in the UK, although time spent under this scheme does not count in other applications such as Indefinite Leave to Remain.
Home Office details penalties for employers' failure to prevent illegal working
The UK government has released its revised Code of Practice on preventing illegal working, setting out the factors it will consider when determining the level of penalty imposed on those who employ an illegal worker. The Code sets out the mandatory "right to work" checks that all employers must undertake before employing an individual.
Given that the hotels sector is regarded by the Home Office as a high risk sector, and therefore more likely to be subject to investigation and enforcement action, employers and other operators within the sector alike should keep an eye on developments in this area. Equally, given the proposed changes on the horizon for employers as regards both the recruitment pool and compliance obligations, it is a good time for operators within the sector to take stock and familiarise themselves with the latest guidance so as to better protect and position their business.
The key change in the publication is the inclusion of the new online "right to work" check, which involves using an individual's Home Office access code to confirm their immigration status, verify their resemblance to the photo on the online service and retain a copy of the check for at least two years after the duration of the employment.
The Code also confirms the statutory excuse for employing an illegal worker, the factors to be taken into account when ascertaining the level of breach and the exacerbating and mitigating circumstances considered when imposing a penalty. The maximum potential penalty is £20,000.
The Code of Practice can be found here, and additional government guidance here.
Regulatory
What impact will the new Package Travel Directive have on hotels?
On 1 July 2018 national regulations implementing the new Package Travel Directive ("PTD 2") came into effect in EU Member States. The PTD2 introduced significant changes to the regulation of package holidays, extending the coverage of protection afforded to travellers by broadening the definition of a "package" and introducing an entirely new concept, the "linked travel arrangement" or "LTA", which is essentially a looser combination of travel services.
Who should consider PTD2, and what are the obligations for hotels?
New CMA guidance for the online accommodation booking sector
Following an investigation in October 2017 into a number of major online accommodation booking sites by the UK’s consumer protection regulator, the Competition and Markets Authority (CMA), serious concerns were raised about certain practices commonly being used. The CMA found that, in some instances, online accommodation booking sites were presenting consumers with poorly set-out or inaccurate information in their search results, which ultimately affected consumers' ability to choose the best deal.
As a result, in February 2019, the CMA published a set of principles to help businesses in this sector comply with consumer law. These principles apply to all online accommodation booking sites offering services to UK consumers. This includes online travel agencies, search engines, big hotel groups and short-stay apartment rentals, as well as smaller businesses selling travel accommodation online.
Online accommodation booking sites should now review their sales practices and assess their use of search rankings, reference prices, hidden charges and pressure selling.
Market Spotlight: Italy
Italian hotel market at a glance: facts and figures
Italy occupies a leading position in the global hotels market. Partner, Antonella Ceschi, highlights some of the key facts & figures that characterise this appealing market.
An interview with Michele De Marco of JLL
Bird & Bird Partner, Antonella Ceschi, takes a look at the Italian hotels market with Michele De Marco, Senior Vice President in Jones Lang LaSalle's (JLL) Hotel & Hospitality Group, based in Milan. Michele specialises in hotel valuations, the selection of hotel operators and the negotiation of management contracts and hotel sales, as well as providing strategic advice with regard to hotel assets.
US Spotlight: Guest article from Sheppard Mullin
We are delighted to feature a guest article from the Hospitality team at Sheppard Mullin. The vertically integrated team, which has earned “Hospitality Practice Group of the Year” honors from Law360, works with hospitality clients to develop strategies that optimize their objectives. They support clients in all aspects of the hospitality business, from full and limited service hotels to boutique and lifestyle hotels; from beach and golf resorts to resort condominiums and timeshares; and from destination and fast casual restaurants to entertainment centers and casinos. In this article, Labor & Employment Associate, Shawn Fabian, explores "panic button" laws in the US.
If you would like to find out more about how Sheppard Mullin's Hospitality team can support your business, please get in touch with Dana Dunwoody and Larry Eppley.
"Panic Button" laws make their way across the USLast August, we wrote about a Chicago ordinance requiring hotel employers to, among other things, equip hotel employees assigned to work in guestrooms or restrooms with portable emergency contact devices. The emergency contact devices, referred to as “panic buttons,” may be used to summon help if the employee reasonably believes that an ongoing crime, sexual harassment, sexual assault or other emergency is occurring in the employee’s presence. Shortly after the Chicago City Council approved the ordinance on July 1 2018, AB 1761 was introduced in the California Assembly. While the California statewide bill did not pass, local ordinances in Sacramento and Long Beach (California) have since received approval. Local panic button measures have now expanded beyond California, and made their way into several collective bargaining agreements across the country.
News & Events
Join us on 16 May at our conference with EP Magazine, where we will explore Future Trends in Food and Service
The conference, taking place at Bird & Bird's London office on 16 May, will showcase the power of food in daily life. We will be joined by speakers from the hospitality sector and beyond, who will explore the concept of "health is the new wealth."
View the programme and register here.
English Contract Law for European consumer-facing businesses - illustrating concepts and explaining jargon
This series of seminars, held in English, provides international consumer-facing businesses (including hotels, hospitality and leisure brands) operating in Europe with essential know-how and tools for English contract law.
The seminars are running across a number of our European offices, including a date in London for non-English lawyers based in the UK, which has been added at the request of seminar attendees. Please get in touch if you would like to attend.
Amsterdam: 28 March
Paris: 17 April
Milan: 8 May
Rome: 9 May
Madrid: 28 May
Copenhagen: 13 June
London: 25 June
Dusseldorf: 10 September
Helsinki: 17 September
Stockholm: 5 November
Bird & Bird's Hotels & Leisure team at the IHIF 2019
Six of our international team-members gathered in Berlin as sponsors of the International Hotel Investment Forum for the first time. Head of Hotels & Leisure, Karen Friebe, was joined by Mark Abell, who chaired a session on international hotel franchising, as well as Emma Brindley-Raynes (London), Jacobo Sánchez-Andrade (Madrid), Antonella Ceschi (Rome) and David Dederick (Budapest). We were delighted to catch up with so many clients and contacts, both at the conference itself and at our drinks reception at the 25hours Hotel.
Madrid office hosts event on tourist accomodation
Our Hotels & Leisure team in Madrid recently held an event on Tourist Accommodation in Spain. We focused on the use of housing in residential units as accommodation exclusively for tourists, which residents complain is driving up rent and pushing out locals. We discussed the existing legal framework, which imposes severe restrictions, and potential implications from an antitrust perspective.
Bird & Bird speakers, which included Jacobo Sánchez-Andrade and Patricia Liñán, were pleased to be joined by guest speakers Joaquín López Vallés, Director of the Department of promotion in the Spanish National Commission on Markets and Competition, and Adolfo Merás Cruz, President of MADRID ALOJA, Association of individuals, managers and small owners of holiday rentals in the Autonomous Community of Madrid.
Please get in touch if you would like information on future events in Spain.
