The UK Employment Rights Act 2025: what it means for hospitality, and how the sector can stay ahead
The Employment Rights Act became law on December 18th 2025.
It is the most significant shakeup of employment law for more than a decade. For the hospitality sector, an industry built on operational agility, variable work patterns and a diverse, often transient workforce, the impact will be substantial. From probation and sickness through to tips and unfair dismissal, all areas of employment are touched upon.
The Act’s phased roadmap, stretching from late 2025 through to 2027, offers operators valuable time to prepare.
The first wave of reforms, some effective immediately, focus on trade unions and industrial action, signalling a notable shift in the employer, employee dynamic across the UK.
April 2026
- Statutory Sick Pay (SSP) becomes payable from Day 1 of absence
SSP will become payable from the first day of absence, and additionally the lower earnings limit will be removed. For hospitality, an industry with high volumes of part time and younger employees, this will increase employer costs and administrative workload.
- Family leave expands
Paternity leave and unpaid parental leave become day one rights for all employees.
- Gender pay gap and menopause action plans
Employers will be required to create action plans around menopause and gender pay gaps. This will be voluntary from April 2026, but mandatory sometime in 2027.
Other measures:
- collective redundancy penalties double;
- more trade union changes;
- whistleblowing protections for sexual harassment;
- a new Fair Work Agency emerges.
October 2026
- Tipping
Employers will need to consult with workers or their representatives before creating a tipping policy and update their tipping policy every 3 years
- The end of “fire and rehire”
“Fire and rehire” will become automatically unfair in most circumstances. While not widely used in everyday hospitality operations, the practice has historically helped reshape seasonal working patterns, shift structures and terms.
- Harassment protections strengthen
Employers will be required to take all reasonable steps to prevent sexual harassment. They will also be liable for all thirdparty harassment, including from guests, clients and event attendees
Other measures:
- tribunal claim time limits double from 3 to 6 months;
- more changes to trade union rules.
2027
- Unfair dismissal rights
The removal of the two-year qualifying period for unfair dismissal is one of the most fundamental shifts in UK employment law for decades. From 2027, every employee will have unfair dismissal protection after 6 months. For hires made on or after 1st July 2026 will receive the updated protection if still employed on 1st January 2027. For hospitality employers, this reform prompts important questions:
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- Are probation reviews consistent across all sites?
- Do managers have the capability and confidence to manage early performance issues?
- Are expectations made clear from day one?
Other measures:
Additional reforms proposed to:
- zero hours contracts;
- flexible working;
- mandatory action plans.
How we can help
Our dedicated Hospitality team can help you to turn legislative change into practical, business ready actions though:
- Policy & document refresh: Updating probation, dismissal, disciplinary, sickness/absence, harassment, menopause and family leave policies, plus site specific handbooks and contracts.
- Manager capability: Targeted training and toolkits so managers handle early performance, probation reviews and return to work conversations consistently across sites.
- Operational modelling: Assessing SSP dayone costs, redundancy exposure and guaranteed hours scenarios to help you plan budgets and rota patterns.
- Union readiness & engagement: Practical guidance on recognition, consultation and constructive dialogue so you’re on the front foot, not the back foot.
- Safe & respectful workplaces: End to end harassment prevention plans (including third party risks) with reasonable steps checklists, reporting routes and communications.
- Action plans that matter: Gender pay gap and menopause action plans that are evidence based, measurable and realistic for multisite operations.
- Tipping & tronc governance: Support to consult workers, shape/refresh tipping policies, and set up processes for periodic reviews and transparent communications.
Hospitality Employment Health Check
Kickstart with a health check tailored to hospitality. We’ll review your current policies, contracts and ways of working, highlight immediate risks and quick wins, and map out a clear, timephased plan to stay ahead of the Employment Rights Act changes. Get in touch to arrange.
Sign up for our Employment Rights Act webinar on 26 February HERE.
