Employment Rights Bill 2024: What hospitality employers need to know

The Employment Rights Bill 2024 – What’s changing for hospitality? 

The changes set out by the Labour government in the Employment Rights Bill mainly focus on strengthening job security for employees, with a heavy emphasis on fairer pay and contract transparency where businesses will need to support new staff from day one. Primarily, it is industries that provide flexible working hours such as hospitality, retail and logistics that will feel the impact of the Bill as they experience high staff turnover and offer more zero-hour contracts.  

So, why should you care about the new changes? It is important for hospitality businesses to embrace the new amendments in the Bill to avoid penalties, improve employee retention and maintain compliance so that your teams are informed and aligned with the latest updates. With changes to employees’ sick pay, working hours, contracts and gender equality, employers need to review their current policies and practices and recognise the areas that will need adjusting once the changes are enforced in 2025 or 2026. 

The biggest workforce management challenges for hospitality HR teams 

The updates to the Employment Rights Bill do come with a few challenges for hospitality HR teams as they need to consider and re-evaluate their workforce management procedures. Let’s take a look at some of the main obstacles HR teams may face with the new Bill.  

Recruitment and hiring practices 

The introduction of day-one unfair dismissal rights means that employees who have worked at a company for less than two years are entitled to claim unfair dismissal. This also coincides with the new ban on firing and rehiring processes where employers can terminate contracts and rehire with new contractual terms. Hospitality HR teams may also find balancing the legal risks that come with the new changes to be challenging, especially when trying to maintain performance-based hiring processes.  

Employee contracts and compliance risks 

Statuary probation periods will need to be reviewed and aligned with legal frameworks by establishing clear and concise policies that mark out the duration, performance expectations and dismissal procedures for the employee. There will also be changes to employee contracts under the new Employment Rights Bill as employers will be expected to offer workers guaranteed hours in their contracts rather than zero-hour flexibility.  

In the hospitality industry, there are approximately 332,000 people in the UK who are working on a zero-hour contract in 2024 as opposed to just 24,000 in the public admin sector, according to Statista. This highlights that hospitality employers will need to assess their business needs and provide employees with guaranteed contractual hours to adhere to the Bill changes.   

Workforce planning and staff retention 

Hospitality HR teams may find difficulties with structured contractual obligations among their employees as specific working hours and days could pose difficulty around personal life situations. The hospitality industry is already the third highest sector for employee turnover with a rate of 35% due to staff shortages, high workloads and burnout meaning employers will need to find ways to retain talent and improve working conditions to improve staff retention.1 This can also raise issues around balancing business needs with employee protections as hospitality employers will need to find ways to consider both the profitability of their revenue whilst making their working environment fair, safe and respectful. 

Preparing for compliance – What hospitality HR leaders need to do 

Now that you know what challenges and changes the new Bill might bring in the hospitality industry, let’s explore what you can do to prepare. To start, it is best to review and update your employment contracts for 2025 and see if there are any areas where you need to make changes that align with the new Employment Rights Bill requirements.  

You will then need to ensure your managers are aware of the new hiring termination policies, so they are compliant with the new updates. You can read our range of hospitality resources on managing staff to help your teams adjust to the new changes.  

Hospitality software will also help HR leaders to automate compliance tracking such as choosing hospitality rota software, hospitality payroll software and staff scheduling software that will streamline your workforce management while maintaining operational efficiency. These changes are the first steps to ensuring your hospitality business is fully prepared for compliance and ready for the enforcement of the Employment Rights Bill.