Hospitality Industry Forecasting Employment Law Changes 2025 & Beyond

Many of the recently announced changes to employment law will impact the hospitality industry harder than other sectors, due to the industry’s high staff turnover rates, reliance on lower-paid workers and the prevalence of shift work.

Key Takeaways on 2024's Legislation Changes

The following new rights were all introduced during 2024:

• Carer’s leave: Introduction of one week of unpaid leave for those with caring responsibilities.
• Flexible working: Now a day one right, with shorter decision periods for employers.
• Paternity leave: Can now be taken in two separate blocks of one week each.
• Maternity protections: Expanded protections during pregnancy and six months after return from family leave.

The Employment Rights Bill was also introduced. The Government will need to draft regulations for each proposed measure (see below) and these will need to pass through Parliament before coming into force. It is unlikely that any of these measures will come into force before Autumn 2026. However, businesses should take the proposed changes into account when forecasting and planning for the future. 

Hospitality businesses will also want to consider the impact of the increase in Employer’s National Insurance contributions and the increase in the National Minimum Wage and National Living Wage from April 2025.

Employment Rights Bill

• The biggest headlines include the shift to a day one unfair dismissal right and the proposed statutory probationary period of 6–9 months. Employees currently need 2 years’ service before they can claim unfair dismissal. It is likely that there will be a process to follow prior to dismissal in the probationary period, with a period of performance management where relevant. After that a strict process will need to be followed to ensure a fair dismissal. This will be a change in mindset for employers wishing to dismiss an employee during the first two years of employment, who will need to ensure that managers receive appropriate training once the detail is clear and in advance of the changes being introduced (likely to be Autumn 2026).
• Upcoming challenges with zero-hour contracts. Employers are to be required to offer staff a contract with guaranteed hours based on hours worked during an initial reference period. There will also be a requirement to give staff more notice of their shifts and to compensate them for any last-minute cancellation of shifts. Whilst this will give staff more certainty it will require careful planning and costing by operators.
• Further changes to flexible working requiring employers to justify decisions, not just cite reasons. Currently employers can refuse a request for flexible working for one of 8 statutory reasons. When this change is introduced employers will need to justify the reason given.

Duty to prevent sexual harassment

The duty on employers to prevent sexual harassment has been in force since 26 October 2024. Employers are required to take reasonable steps to prevent sexual harassment in the workplace. This duty applies to harassment by employees but also by third parties. Taking reasonable steps will include an employer developing an effective harassment policy, engaging and training staff on preventing harassment, carrying out a risk assessment, having an effective reporting mechanism for staff and monitoring complaints that are received.

Employers are currently not liable for harassment of their staff by third parties however, the Employment Rights Bill includes the following additions:

• A duty to take ALL reasonable steps to prevent harassment. This is a higher duty than the current duty to take reasonable steps requiring employers to do everything possible to prevent harassment.
• Employers will be liable for harassment by third parties – e.g. suppliers, contractors and customers. This will represent a real change and particular challenge for the hospitality sector as it is clearly difficult to control the acts of others. When reviewing policies to comply with the current requirements you should bear in mind that liability for third party acts might be imposed in future and should look at where the risks are in your risk assessment. One crucial factor will be how any complaints received are dealt with. It will not be enough to simply have a policy. All staff and stakeholders will need to be engaged and you will need to demonstrate zero tolerance of harassment as an organisation.