Editorial: Unseen effects of holiday law need attention

'Hospital staff should not have... this extra burden. Their plight, not restauranteurs' hurt feelings, needs to be addressed'. Photo / Thinkstock

Since its inception, the 2004 Holidays Act, which gives staff time-and-a-half pay and a day in lieu for working on statutory holidays, has presented quandaries, especially for restaurateurs and cafe owners. Could they afford to be closed on those days if their competition was open? Did their assessment of profitability mean they should open with a full staff, or should they operate with fewer staff? And, perhaps most crucially, what should they charge if they chose to open? The act leaves them free to choose.

The issues raised by the legislation have bubbled to the surface sporadically over the past few years. However, they were highlighted this festive season because the four real holidays fell on weekends. Employers, therefore, faced extra labour costs on those days and the immediately following Mondays and Tuesdays, the holiday-transfer days.

This created confusion among many restaurant and cafe customers who were unsure when the public holidays actually fell. There were also complaints from people confronted by surcharges in other circumstances, most particularly at accident and medical clinics.

When the law was introduced, the Restaurant Association predicted a return to the time when virtually everything shut down at the weekend. There would be mass closures of cafes and restaurants, and those that chose to open would, inevitably, have to place a surcharge of 15 or 20 per cent on their menus to recoup added labour costs, it said. Clearly, this was wrong. While some restaurants closed their doors over the Christmas-New Year period, many others remained open. And, according to the association itself, more than half of these did not impose a surcharge.

That scenario served the public well. They could shop around, and steer clear of businesses whose surcharge they regarded as exorbitant. Just as it was restaurateurs' right to charge what they wished, so it was customers' right to penalise those seen as attempting to misuse that freedom.

And those who did not impose a surcharge - opting, instead, to recoup their extra staff costs by, for example, charging slightly more throughout the year - stood to enhance their profitability through increased turnover. For many of them it must have been a win both ways.

The present situation may not be set in stone. Restaurateurs are always assessing their options and the market. If virtually all elected to close, competition would wane and things could change. There would be less cause to pursue customers through price differentiation and, therefore, every reason to impose a surcharge. If so, the major question for customers would become the extent of the additional charge.

But six years' experience with, and adaptation to, the act makes that seem unlikely. A relatively settled pattern has emerged. One thing is certain, however. The public has no reason to thank restaurants for staying open at all on these public holidays, as the Restaurant Association's Steve Mackenzie suggests. Many other private businesses do precisely the same. And, while some of these do, indeed, impose surcharges to recoup employee costs, many others, including this newspaper, do not.

Contrary to Mr Mackenzie's assessment, the most disturbing aspect of the latest publicity on surcharges did not, in fact, relate to the "bashing" of restaurateurs. It concerned an unintended consequence of an act that stipulates inflexible and onerous penal payments. This saw hospital accident and emergency departments being inundated because medical centres had raised their prices. Overworked hospital staff should not have to cope with this extra burden. Their plight, not restaurateurs' hurt feelings, needs to be addressed.