Hospitality Law

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Hospitality Law

Why study the law?

At face value studying the Law seems dull and boring. I will have to agree that the long-winded provisions of our laws are sometime quite daunting ... if not outright boring. Yet, law somehow regulates most of what we do in life.

From the very moment you step into the hospitality industry you will encounter the effects of the law. You will immediately enter into a legal relationship with your employer, which secures a number of rights as well as obligations. Our industry is a service industry and one is therefore in constant contact with customers. As a result of this the legal relationships that ensue are numerous! The hotelier or caterer enters into a legal relationship not only with his clientele, but also with his employees, suppliers, trade unions, travel agents and operators, as well as subcontractors in our line of trade. In addition to this, government and other professional bodies regulate industry. This naturally means that the hotelier or caterer must be aware of the boundaries within which he can operate. In this regard, a sound knowledge of the law is essential to the manager, as is a knowledge of business management and the fundamental skills of the hospitality profession. The hotel or catering manager cannot afford to ignore the Law!

Dismissing an Employee for a "good and sufficient cause"

We often hear of cases of employees being dismissed from a hotel or other place of work. The question we try to answer succinctly in this feature is: What justifies the dismissal of an employee? 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)).

The Maltese legislator, not unlike his British counterpart, has shunned from providing a clear definition of the phrase "good and sufficient cause", allowing it to be construed by the competent authority in each individual case. Effectively this means that the employer or the employee at the time of terminating a contract need not make reference to any clause or list determining what can be considered a "good and sufficient cause" (although such a list may well exist in a collective agreement). The legislator merely provides five circumstances, which the employer may not set up as a good and sufficient cause. Any other case would be determined on its own merits. The classical example is that of the prohibition of smoking. An employee who breaches the prohibition in a public area would have to be treated differently from an employee who lights up in an area where smoking may well cause an explosion!

If one party feels that a contract has been terminated for a cause which cannot be considered as "good and sufficient", that party may contest that decision in front of the Industrial Tribunal (and in the Civil Court in the case of a definite contract of employment).

The Industrial Tribunal, as can be demonstrated through case law, decides each case on its own merits. In general the Tribunal is reluctant to accept the outright dismissal of an employee unless in fairly grave circumstances, encouraging instead far less drastic measures such as demotion or reduction of benefits (W. and P. Hotel, 26th March 1982, Dec. No. 118, Vol. 53)

Dismissal must not be seen as an opportunity to demonstrate the employer's "power" over his employees or as a means to counter insubordination (M.B. and S.J.I. Clothing Industry Co LTD, 1st October 1986, Dec. no. 286, Vol. 64)

Nonetheless, there are instances where the Tribunal will, almost invariably, admit dismissal for a "just and sufficient cause". Whilst absence from work in itself is not a "good and sufficient cause", such absence without a justified cause may well lead to justified dismissal. (J.B. and Alfred Gera & Sons Ltd., Dec. no. 220)

It seems clear from the Tribunal's decisions, that the Tribunal does not hesitate to consider theft or attempted theft as a just cause for the termination of a contract of service. Yet, even such a dismissal must be carefully weighed to consider the circumstances which may arise as a result of such dismissal (D. and S.F.C. Ltd., 25th June 1984, Dec. No. 170, Vol. 55) The Tribunal seems to be suggesting here the requirement of a social conscience on the part of the employer.

Whilst I have found copious cases in which the employee has sought redress against a decision of the employer to terminate employment, I have come across no instances where the employer seeks to challenge the employee's own termination of a contract. As a matter of fact, with regard to indefinite contracts of employment the employee need not provide any cause for the termination of employment provided he/she gives notice. As the use of definite contracts continues to increase we will undoubtedly be witnessing case law where the specialist nature of a definite contract of employment may well justify the employer's reluctance to accept abandonment for a cause not considered being "good and sufficient".

Regardless of what may be termed "a good and sufficient cause" the Tribunal has encouraged a responsible and equitable conduct from both the employers and the employee. Whatever the reason for such an abrupt termination, the Tribunal is firmly advocating that rash behavior on any part will not confer a good and sufficient cause and that the parties should be allowed to retract from a decision based on impulse rather than reason.

Section 35(14)

An employer may not set up as a good and sufficient cause:

(a) That the employee at the time of the dismissal was a member of a trade union; or

(b) Except in the case of a private domestic employee, that the employee no longer enjoys the employer’s confidence; or

(d) That a female employee is pregnant with child; or

(e) That the employee is suspended from attending to his work by virtue of an order made in pursuance of the provisions of section 13 of the Prevention of Disease Ordinance.

Hotel Guest responsible for Safety Deposit box

In this case the plaintiff, a former guest at the Holiday Inn (since renamed Crowne Plaza) used the services of a safety deposit box offered by the hotel. He negligently left the key of the box with the hotel's front desk and later discovered that an expensive watch had gone missing from the box. The safety deposit box required two keys: one which would be kept by the hotel, the other which would be given to the guest - who in this case negligently abandoned it at the Front desk.

The Court held that a hotel could be held liable for the loss of an item placed in a safety deposit box if it was proven that such loss occurred owing to some fault on the part of the hotel or its employees.

The Civil Code provisions on deposit were not applicable in the circumstances. Harry had not "deposited" his watch with the hotel. The use of a safety box was not a deposit in the legal sense, as the item placed in the safety box was not under the control of the hotel. It remained in the material possession of its owner. The fact that the hotel kept one of the two keys necessary to open the box did not mean it assumed responsibilities as depositary.

Referring to Section 1039 of the Civil Code the court explained that the hotel was not responsible if a guest's negligent act precipitated the damages suffered.

In this case therefore the hotel had fulfilled its responsibility by providing the guest with a safety deposit box. The fact that an item had gone missing was as a direct result of the guest's negligence.

Liability of the Hotelier

History

In Roman times, an innkeeper was deemed responsible for any theft committed by his guests on his premises. This effectively meant, according to Justinian's Digest, that if one of your guests robbed another guest then you were liable to pay double damages to your robbed guest! The same applied if one of your manservants’s, your slave, committed a theft on one of your guests.

This anomalous situation at law has, of course changed.

Is the hotelier responsible for an act of his own staff?

The hotelkeeper remains responsible for the conduct of his employees at work. This section of the law, enacted in our Code of Police laws in the late nineteenth century requires that:

175. Every hotel or lodging-house keeper shall watch over the conduct of every person in his assistance or service, and shall take special care that nothing contrary to the law or morality shall take place on the premises. (Code of Police Laws)

What is the liability of the hotelkeeper?

Generally, the liability of a hotelkeeper is limited to the maximum amount of Lm 75. This is now considered to be a very low sum and has not been reviewed for some years now. The Civil Code reads:

1039 (1) A hotel-keeper shall be liable up to an amount not exceeding seventy-five liri for any damage to or destruction or loss of property brought to the hotel by any guest.

Does this mean that if, for example, a guest's pearl necklace is stolen the hotelkeeper is at maximum liable to the amount of Lm 75?

Not necessarily. A hotelkeeper is required to accept the deposit of property with him. If the guest requested the hotelkeeper to accept the deposit of the necklace and the hotelkeeper refused that request then the hotelkeeper is liable to the full value of the item. Likewise, if the item was left with the hotelkeeper and was damaged or lost then the hotelkeeper is liable to the full amount. The following sub-sections of Section 1039 define this liability clearly:

(2) The liability of the hotelkeeper shall be unlimited -

(a) if the property has been deposited with him; or

(b) if he has refused to receive the deposit of property which he is bound under the provision of the next following subsection to receive or safe custody; or

(c) in any case in which the damage to, or destruction or loss of property has been caused, voluntarily or through negligence or lack of skill, even in a slight degree, by him or by a person in his employment or by any person for whose action he is responsible.

(3) A hotel-keeper shall be bound to receive for safe custody securities, money and valuable articles except dangerous articles and such articles as having regard to the size or standard of the hotel are cumbersome or have an excessive value.

(4) A hotel-keeper shall have the right to require that any articles delivered to him for safe custody shall be in a fastened or a sealed container.

As can be seen in Section 3, both the size and the standard of the hotel must be considered when determining if the hotelier is to accept to take property in his care. In this way, a hotelier running a two-star hotel cannot be expected to accept the deposit of an expensive pearl necklace, whereas a hotelier in a five-star hotel is to accept the deposit of such. The hotelier can require that the property delivered be placed in a sealed container.

The provision of a safety deposit box, or some form of safe, for which the guest is either given a key or exclusive access is an effective means of excluding the hotelier's liability. The hotelkeeper is not liable if one of the following situations arises:

(5) The provisions of subsections (1) and (2) of this section shall not apply if the guest, after discovering the damage, destruction or loss, does not inform the hotel-keeper without undue delay, or if the damage to, destruction or loss of, property is due -

(a) to a fortuitous event, or to irresistible force; or

(b) to a reason inherent in the nature of the property damaged, destroyed or lost; or

(c) to an act or omission of the guest by whom it was brought into the hotel, or of any person, other than the hotel-keeper, to whom such guest may have entrusted the said property or of any person in the employment of such guest or accompanying him or visiting him.

If therefore an item is stolen in a robbery which could have not been resisted the hotelkeeper is not liable. The same applies in the event of an accidental event which could have been caused by the hotelkeeper. Likewise the hotelkeeper cannot be held responsible for damage or loss caused by a person visiting the guest or any person in the guest's employment.

Can a guest and hotelkeeper enter in an agreement reducing or removing the hotelkeeper's liability?

This situation arises when the hotelkeeper and the guest agree that should the guest's property, when in the former's care, be damaged or lost the hotelkeeper is liable to a sum less than the value of the property. This is normally to the advantage of the hotelkeeper. An agreement made before the property is damaged or lost is generally null:

(6) Any tacit or express agreement between a hotel-keeper and a guest entered into before any damage to, or destruction or loss of property has occurred and purporting to exclude, reduce or make less onerous the hotel-keeper's liability as established in this section shall be null and void.

If, however, the loss or damage of the property is not caused voluntarily or through gross negligence then any agreement stands. This effectively means that if an employee accidentally damages a very fragile item deposited with him the hotelkeeper's liability is limited to an amount of not less than Lm 75 if and only if a prior agreement had been reached. If the item is on the other hand mishandled through gross negligence the liability remains unlimited. The proviso for the above sub-section reads:

Provided that, in the cases referred to in paragraphs (a) and (c) of subsection (2) of this section where the damage to, or destruction or loss of, property has not been caused by a person mentioned in the said paragraph (c) voluntarily or through gross negligence, any agreement signed at any time by the guest whereby the hotel-keeper's liability is reduced to an amount being not less than seventy-five liri shall be valid.

In any event any theft or crime committed on the premises must be reported to the Police:

174. Every hotel or lodging-house keeper shall forthwith report to the Police any theft or other crime which have taken place on the premises, or the death or lunacy of any lodger. (Code of Police Laws)

What can a hotelkeeper do if a guest refuses to settle a bill for services?

The hotelkeeper can secure payment of bills by retaining property of the guests. The Hotels and Catering Establishments Act reads:

17. A hotel-keeper and a hostel keeper shall have the right to retain any goods which a guest brings into a hotel or hostel and which are in the possession of the hotel-keeper or the hostel keeper until such a guest has paid any rates lawfully charged by the hotel-keeper or hostel keeper as the case may be.