The (Employment Rights) Bill is on the table – and what it means for the hospitality sector

A further list of amendments to the highly anticipated Employment Rights Bill (Bill) was published overnight on Monday. These have included some new and important government backed amendments, none of which were previously known. These latest changes have reignited industry-wide debate, particularly in the hotels and hospitality sector, which faces some of the most significant potential impacts.

Here’s a breakdown of the latest as well as some of the other already announced key proposed amendments and what they could mean for employers in the hospitality sector:

Zero-hour contract proposals

One of the most significant proposed amendments to the Bill aim to water down provisions related to zero-hour contracts. If amended, the clause will give workers the right to request guaranteed hours, removing the automatic duty for employers to offer them. This right will only apply to workers averaging at least eight hours a week over a 26-week period.

The amendments also suggest that short notice cancellation payments will be waived if employers withdraw a shift at least 48 hours in advance. This change reduces financial exposure for employers when shifts are cancelled well in advance, providing clarity for workforce planners.

Ban on NDAs covering harassment and discrimination at work

A groundbreaking clause in the Bill would void any contractual term, whether in an employment or settlement agreement, that seeks to silence allegations or disclosures about harassment or discrimination (as defined under the Equality Act 2010). This provision would extend to both current and former workers, as well as contractors, trainees, and individuals on work experience.

This marks a major shift in protecting employee rights and promoting transparency in the workplace. Employers in the hospitality sector should consider reviewing their contracts, template agreements, and internal policies. If this is implemented, any clause that attempts to prevent disclosures related to harassment or discrimination could be unenforceable, leading to both reputational and financial risk.

Fire and rehire provisions

Clause 26 of the Employment Rights Bill initially banned dismissing employees for refusing to agree to contract variations unless the change was essential to avert financial distress. Several proposed amendments now seek to soften this ban. The key amendment means that the ban will only cover ‘restricted variations’ such as changes to pay, pension, hours of work, and holiday entitlement.

Additionally, the checklist that employers had to follow has been deleted, reverting to the usual reasonableness test for unfair dismissal. This adjustment lightens the evidential burden for employers but maintains high stakes since any dismissal must still be justified by imminent business collapse.

Unfair dismissal rights from day one

The right to claim unfair dismissal will apply from the first day of employment. A simplified dismissal process may be available during a transitional “initial period” (expected to be nine months), but this will be set following further consultation.

The impact on the hospitality sector will be wide ranging and there will need to be a significant focus on recruitment, probation, and onboarding processes.  All of which will need reviewing. Clear documentation and performance management protocols will be essential from day one.

Statutory sick pay expansion

SSP will be payable from day one of sickness. Employees below the earnings threshold will receive 80% of their average weekly earnings.

Payroll systems and absence tracking will need updates. Budgeting for increased sickness costs is advisable.

Sexual harassment changes

Although not part of the most recent amendments, important changes introduced last October, and further expanded under the Bill, deserve close attention:

• Employers must now take “all” reasonable steps to prevent workplace sexual harassment.
• Employers will be liable for third-party harassment, whether related to sex or any other protected characteristic.
• Disclosures of sexual harassment will be explicitly included under whistleblowing protections.

Following the proposed amendments to the Bill, employers should implement comprehensive training programs that educate employees on recognising, preventing, and reporting harassment. This training should ideally be mandatory for all staff members, including management, and should cover the new legal obligations. Additionally, it’s essential for employers to update their workplace policies to reflect these legislative changes, ensuring they encompass clear guidelines on acceptable behaviour, procedures for addressing complaints, and mechanisms for supporting affected employees.

What’s next?

With over 200 amendments already debated in the House of Commons and dozens more in the Lords, the Bill is now entering its crucial Report Stage in the House of Lords, broadly the final opportunity to make changes. This stage is scheduled to begin on 14 July 2025.

How we can help

The evolving Employment Rights Bill represents a significant shift in the employment landscape, especially for the hospitality sector. If you’d like to discuss how the Bill might impact your business, please get in touch with our employment team.

This article was published in the July edition of Property Perspectives.

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