Retail HQ closures – legal issues discussed by Irwin Mitchell
Charlotte Rees-John has been speaking with a number of our Consumer sector experts regarding the rise of the HQ closures across hospitality and retail and the legal issues that this creates.
Elaine Huttley, Employment partner and part of the Consumer team at Irwin Mitchell, confirmed that there’s been an increase in the number of restructures due to the cost of living crisis and the squeeze on spending. Some of this is leading to job losses and office closures but for many employees it means a change to homeworking or a relocation. Elaine points out that this still requires a change in their terms and conditions of employment and says it could still trigger the need for collective consultation.
Many employees are welcoming the news having struggled to return to the office following the pandemic, so securing agreement may not be as challenging as first imagined. Elaine says employers should in the first instance consider whether they have mobility clauses on which they can rely but then still proceed with caution and consultation as working from home will not be viable for everyone, particularly those struggling with their mental health. She said employers also need to consider whether additional changes will be needed to a home working contract to protect the health and safety of their home working employees.
We’ve also previously commented on both the Great Resignation and Quiet Quitting which demonstrate the challenges of having hybrid working arrangements whilst trying to maintain employee engagement and loyalty. According to Elaine, employers should consider not only the logistics of where employees will be working, but the knock on effects of this and what they need to put in place around performance management and line-manager training.
Clare Davitt is a Real Estate lawyer within the Consumer team at Irwin Mitchell. As part of her role she advises consumer businesses to help them understand what they want to get from their offices. She says that understanding the consumer sector and its nuances, including practical occupancy considerations, market norms, the counterparties, green leases and applicable valuation principles, is key to the process.
The cost of providing office space and services for employees has a significant impact on bottom line. Maximising the value of office space is an important but complex challenge – particularly as the way we use offices is evolving. Real estate needs are becoming more sophisticated and Clare believes that investing in quality space will become more important than increasing footprint. Today’s offices now serve many functions, including supporting productivity and wellbeing, attracting and retaining talent, enabling collaboration and innovation, and reflecting an organisation’s brand and values. In other words, offices are no longer just the place where people sit at a desk and work.
ESG aspirations will drive more and more change in the near future – indeed we recently saw an announcement regarding a Treehouse hotel coming to Manchester. The hotel, which will incorporate energy and carbon savings along with extensive use of reclaimed and recycled materials, is 100% focussed on sustainability. This kind of development will become increasingly more apparent in all types of consumer space as consumers, politicians, investors push the ESG agenda.
