Serving up change: preparing the hospitality sector for new employment legislation

Employment rights – day one rights to claim unfair dismissal

Currently the qualifying period for an employee to make a claim for unfair dismissal is 2 years’ service, subject to certain exclusions such as where this is related to discrimination.  This makes it relatively low risk to simply dismiss an employee with less than two years’ service, should the need arise.  Under the new Employment Rights Bill that qualifying period of two years will be removed and employees will have the right to claim unfair dismissal earlier, from day one.  However the government has indicated that employers will be able to ensure the employee is a good fit for the job by establishing statutory probationary periods or Qualify Periods during which there will be a modified light touch dismissal procedure in place.  The length of this statutory period is likely to be up to nine months but do note that this will include any extension to probation as well.  What that process will look like is still under consultation and is unlikely to come into effect until Autumn 2026.

A year comes by quickly so now is the time to put in place a robust recruitment process to ensure that the candidates being hired are a good fit as this is the best way to reduce the need to go through a disciplinary and dismissal process in the future.  This could include a more rigorous interview process, with additional interviews and skills testing.  This will also mean closer monitoring and upskilling managers and team leaders on how to carry out effective induction and probation reviews.

Zero-Hours Contracts

The bill includes provisions that affect the use of zero-hours contracts, particularly for agency workers.  Contrary to most headlines there is not proposed to be an outright ban on zero hours contracts, rather that there will be a requirement for employers to offer guaranteed hours where an employee or worker has a regular pattern of work or a regular number of hours per week.  Essentially zero hours contracts will only exist where the working arrangement really is ad hoc and that can be clearly demonstrated.  Where an employee is entitled to guaranteed hours, employers will also be required to provide a contract which reflects those hours.  The length of the reference period for deciding if hours or work patterns are regular, will be set out in the regulations and is under consultation.  For the hospitality sector where zero hours contracts are useful for managing peaks, it would be worth reviewing staffing levels now and planning ahead to see what staffing needs may look like, and how many regular hours contracts may be offered to employees.

Statutory Sick Pay (SSP)

The government has proposed changes to SSP, including the removal of the lower earnings limit, meaning that more employees will be eligible for sick pay.  Currently there is a three-day waiting period where no statutory payment is due to the employee while they’re off sick with payments only beginning from day 4 onwards. Under the new legislation it is proposed that payments start from day one of sickness. For those companies who enhance statutory sickness payments it won’t have a big impact, however those who only commit to statutory pay will need to pay SSP from day one of absence.  It is also proposed to remove the lower earnings limit, which is where an employee must earn an average of £125 per week to qualify for SSP.  Some businesses offer company sick pay which is an enhanced form of sick pay, however there is usually a cap on how much people can get during a calendar year.  Having an effective recording keeping system will help to manage cost, this can sit alongside a sickness absence policy which sets out clear expectations.

Harassment Protections

The legislation which came into effect in October 2024 introduced a duty for employers to prevent third-party harassment of employees.  In a hotel or a restaurant setting, this means managers must take reasonable steps to protect staff from harassment by customers or clients (third parties), which could involve additional training and policy updates.

Flexible Working

There are new rights related to flexible working, making it easier for employees to request changes to their working hours or patterns.  This includes ensuring fair consultation processes and compliance with updated legal requirements.

Protection for Pregnant Women and New Mothers:

Enhanced protections for pregnant employees and new mothers mean managers must be vigilant in providing appropriate accommodations and avoiding discriminatory practices