Goodbye ‘Zero Hours’? What the new Employment Rights Bill means for hospitality operators

Yesterday, the Government presented its long-awaited Employment Rights Bill to Parliament. The promise to have this put forward within the first 100 days has been met, just! The Bill has been described by the Deputy Prime Minster as the ‘biggest upgrade to rights at work for a generation’ and will significantly effect pubs, bars, restaurants and other operators within the Hospitality and Leisure sectors.

The Government expects to begin consulting on the reforms sometime in 2025, with the majority taking effect no earlier than 2026.
There is time to prepare for these changes however the sooner that is done the better.

• There are an estimated 64,000 employees within the sector who are on ‘zero hours’ contracts  who will be affected by the new proposals. These include;
  • Granting certain qualifying workers the right to be offered guaranteed hours – this will apply to those who have worked a number of hours that satisfy certain conditions.
  • For those that do qualify the employer will be obliged to make an offer of guaranteed hours in line with those that have been worked. Details regarding the qualification conditions will be set out in Secondary Legislation in due course.
  • There will also be new rights regarding giving workers reasonable notice of shift changes and compensation for cancellation of shifts at short notice

Other changes that will affect all employees regardless of contract type are:

• The right not to be unfairly dismissed from day 1 – the Bill removes the qualifying period of 2 years for this protection. However, it does include provision for dismissal taking place within the ‘initial period of employment’ which is being suggested by the Government as a statutory 9 month period.  It remains unclear what the short form fair process will look like during this initial period.
• Flexible working will become more protected – employers will only be able to refuse if ‘reasonable’ to do so in line with specific grounds (which are still to be confirmed).
• Statutory Sick Pay will become payable from the first day of sickness rather than after the qualification period currently in place.
• Family leave, such as paternity, will also be available from the start of employment.
• Further changes to tipping and gratuities mean that if policies for these are revised or developed there will need to be a mandatory consultation with staff affected, and all existing policies will need to be reviewed every 3 years.
• Employers will need to take ‘all’ reasonable steps to prevent harassment of staff – and will be liable for third party harassment (for example by patrons) if they have failed to take these.

These changes will significantly impact the Hospitality and Leisure sector which is already struggling with the  cost-of-living crisis and its effect on revenue.  Following Brexit and Covid, we hope that the Government listens to industry experts during the consultations and make meaningful amendments to help those businesses that already struggle with the overheads of employing staff.

The total removal of zero hour contracts will be damaging to businesses that simply cannot rely on constant trade enough to guarantee workers hours.  Of course, increasing protection for workers that are being exploited is very much welcomed, there must also be thought as to how zero hours contracts can continue to allow operators to be flexible enough to meet the specific demands of the sector.

To discuss what the proposed changes mean for you, and how you can prepare contact amay@clarkeandson.co.uk