AN OVERVIEW OF HOTEL AND CATERING LAW

The hotel and catering industry is one the world’s fastest growing industry and revenue earner. It has developed rapidly over the last decade and employs approximately 10% of the world labour force. The hotel industry is an essential part of tourism. With the growth in tourism, hotels have seen rapid expansion as well. The standards of hotels are rising and trained professionals are in great demand.

Hotels are establishments that provide paid accommodation and other services to guests. Hotels have come a long way and developed into a specialized business sector. The aspect of law regulating the hotel and catering industry is generally known as hospitality law. Hospitality law is the body of law relating to the foodservice, travel, and lodging industries. It governs the specific degrees of hotels, restaurants, bars, spas, country clubs, etc. Hospitality law does not just involve one area of law.

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It encompasses a wide variety of practice areas such as contracts, antitrust and tort law.

The hotelier or caterer enters into a legal relationship not only with his customers, but also with his employees, suppliers, trade unions, travel agents and operators, as well as subcontractors in the line of trade. The government and other professional bodies regulate this industry, therefore the hotelier or caterer must be aware of the boundaries within which he can operate. In this regard, a sound knowledge of the law as well as fundamental business management skills of the hospitality profession is essential.

Hospitality law has evolved as a specialty within the legal profession in the last several decades. It is also offered as a course on the undergraduate and graduate levels as well as in some law schools. A typical hospitality law course covers the history of hospitality law, the impact of federal and state civil rights laws on the hospitality industry, and an extensive discussion of contract law, including discussions of remedies for overbooking and a guest’s breach of the contract regarding a reservation. Hospitality law courses today also include contracts that are entered into on the internet, which is very common in hotel bookings, as well as negligence, innkeeper rights, guest rights, and employment practices. An increase in bookings through the internet has caused hospitality law to continue to advance.

There are laws regulating hotel and catering issues in various countries especially in places like the US and the UK. These laws usually regulate quite a number of issues pertaining to hospitality. They include issues such as:

1. Theft or crime committed within hotel premises
2. Guests refusing to settle their bills
3. Ensuring the safety of hotel guests
4. Breach of contracts for reservation
5. Health and safety of employees in catering operations
6. Children and young people working in catering
7. Dismissal of employees
8. Safety of guest’s property
9. Catering/restaurant permits
10. Price lists and stipulations
11. Safety and working conditions for employees

In the US, hotel operators have a duty to their guests and to their guests’ property. This duty of care to the guests does not insure the guests’ safety, but requires the operator to “act prudently and use reasonable care”. This means, among other things, that an operator can be held liable if he or she is found negligent. An operator also must ensure that all of the guests’ personal information is retained and destroyed according to proper and recommended procedure. Every state and the District of Columbia have enacted statutes to limit innkeepers’ liability. These statutes require that notice be posted for room occupants. Commonly, these notices are posted on the backs of hotel room doors so there can be no question as to whether the hotel guest can see and read the statute and liability provisions.

American statutes also govern bailment. A bailment is the delivery of an item or property, for some purpose, with the expressed or implied understanding that the person receiving it shall return it in the same or similar condition in which it was received, when the purpose has been completed. Safety deposit boxes and luggage storage are common examples of bailment for the hospitality industry. Lodging and restaurant operators are responsible for the safety of the guest’s property when a bailment is established.

Restaurant operators in the United States have a duty to sell food that is suitable for buying and selling. “Truth in Menu” laws govern descriptions of food in menus. These laws ensure that the customer receives what the menu says he or she will. They also govern the ingredients, nutritional descriptions, preparation style, and more. The US Food and Drug Administration (FDA) and the National Restaurant Association produce a helpful guide for the restaurant industry. Organizations such as the National Restaurant Association and the American Hotel & Lodging Association are helpful platforms for their respective industries.

Risk management is of paramount concern for any hotel, large or small, because of the kind of issues that arise in the field of hospitality law. The usual problems involving risk management are slip-and-fall cases or crimes against guests, including assault and rape, break-ins and theft from the rooms, discriminatory issues involving both employees and guests, and issues of payment and bailment. Some hotels and management companies organize trainings for their employees with regard to risk-management issues and have established written guidelines and procedures addressing risk management. The major hotels and management companies have law firms, mostly on retainer, to provide risk-management assistance and guidance as needed.

An employer has a duty to take reasonable care to ensure the employees safety at work. So therefore an employee may sue an employer for breach of an implied term of his or her contract of employment. This principle was illustrated in the UK case of Waltons and Morse v. Dorrington [1997] IRLR (488) where a woman resigned from her job because her employer would not provide her with a ‘smoke-free’ work area. She sued the employer for constructive dismissal. Her claim was upheld by an industrial tribunal and by the Employment Appeal Tribunal. At common law an employer is under a duty to take reasonable care to ensure the health and safety of his or her employees. This duty is derived from the general duty owed to one’s neighbour, following the principle enunciated by Lord Atkin in Donoghue v. Stevenson [1932] AC 562 (HL).

In the UK, the Conditions of Employment Regulations Act (enacted in 1952) states that an employer may dismiss an employee and the employee may abandon service on his part if there is a “good and sufficient cause” (Section 34(14)). Dismissal however must not be seen as an opportunity to demonstrate the employer’s “power” over his employees or as a means to counter insubordination.

In Hamburg, Germany, catering/restaurant permits are issued by the appropriate Consumer Protection Office. In order to meet the requirements for a licence to be issued, one must demonstrate, among other things, that the premises to be used for the hotel and catering business are suitable (by means of construction drawings/floor plans of all business areas inclusive of rooms designed to accommodate staff).

In the hospitality industry, consumers are informed of prices by means of price lists. These must be displayed in all pubs, restaurants and similar establishments where food and drinks are served. In Hamburg, one important foundation for displaying prices is the Regulation Governing the Display of Prices of 14thMarch 1985. This regulation contains the most important principles regarding pricing information for the goods and services on offer in retail outlets, in the services sector and in the hospitality and accommodation industry. Everything that is served must be priced. The prices indicated in the price lists must be final prices, i.e. they must include any additional charges (e.g. VAT). Price lists must be displayed or provided as follows:

1. the price list must be provided in the form of a food or drinks menu prior to taking the order or on specific request
2. or a food and drinks menu must be displayed on every table
3. or a food and drinks menu must be otherwise displayed where it is clearly legible.

In the event of any theft or crime committed on the premises of a hotel, this must be reported to the Police. Generally every hotel must also report to the Police cases of death or lunacy of guests on their premises. In another vein, when a guest refuses to settle a bill for services rendered, the hotelkeeper can secure payment of bills by retaining the property of the guest.

People would always have the need to travel and stay in hotels or other lodging facilities which could be for business or pleasure. This reality has made the hotel and catering industry a very crucial and vibrant sector of the global economy. In this regard, the importance of the laws that regulate this industry cannot in any way be overemphasised. Operators and practitioners in this industry, relevant government agencies and lawyers must all put hands on deck to make the legal framework for the hospitality and catering industry to be not only dynamic but to adjust and suit today’s global realities. With globalisation and the internet, the horizon of hospitality law would continue to grow and expand, so also must lawyers, practitioners and regulatory bodies adjust to this reality.

Mandyen Brenda Anzaki

Source : thelawyerschronicles.com