What the Employment Rights Act 2025 Means for Hospitality – and When It’s Happening
Big changes are coming to employment law in 2026 and 2027, and if you’re running a hotel, pub group, or coffee chain, it’s worth knowing now so you can get ahead.
The good news? You’ve got time to prepare. The not-so-good news? That time will fly. This is a golden opportunity to fine-tune your people processes. The Employment Rights Act 2025 (ERA) will encourage (and in some cases force) you to look closely at how you recruit, onboard, and manage employees.
And that’s no bad thing. Solid people processes don’t just keep you compliant, they boost retention, sharpen performance, and help your team thrive.
From April 2026: Day-One Rights and a New Enforcement Agency
Statutory Sick Pay Changes
SSP will be available from day one of absence for all workers – not just employees who earn above the lower earnings limit. It will be paid at 80% of weekly earnings or the standard flat rate, whichever is lower.
Parental and Paternity Leave
These will become day-one rights. No more waiting periods for parents to access these entitlements.
A New Fair Work Agency
A brand-new agency will take charge of enforcing workers’ rights, handling statutory payments, tribunal claims, and legal support. This is a big shift and only in time we’ll see the impact this has on the industry.
From October 2026: Greater Protection for Employees
Tribunal Time Limits Extended
The window for employees to make tribunal claims will be extended from three to six months – giving people more time to make a claim.
Sexual Harassment Duties Strengthened
You’ll need to take all reasonable steps to prevent workplace harassment – not just “reasonable steps”. You’ll also be liable for harassment by third parties, including customers.
Right to Union Information and Access
You’ll need to inform employees of their right to join a union and allow access for qualifying trade unions (non-residential premises only).
From January 2027: Unfair Dismissal and Flexible Work Overhaul
Goodbye ‘Fire and Rehire’
Originally intended to take effect from October 2026, “fire and rehire” dismissals will now not come into force until January 2027.
Using “fire and rehire” to force contract changes will become an automatic unfair dismissal, unless you can prove the change was vital to the business’s survival.
Unfair Dismissal: Six Months Service Needed
Employees will gain the right to make a tribunal claim for unfair dismissal after six months, down from the current two years. Plus, there’ll be no cap on compensation.
New Right to Bereavement Leave
One week of unpaid bereavement leave will be a day-one right for all employees, including for early pregnancy loss.
Flexible Working by Default
Flexible working will become the default position unless employers can prove it’s unreasonable to allow it.
Zero Hours Reform
Zero hours and agency workers will gain the right to reasonable notice of shifts and compensation if shifts are changed or cancelled at short notice. Eventually, they’ll also be offered guaranteed hours if patterns emerge over time.
Menopause and Gender Pay Action Plans
Larger employers (250+ employees) will need to create action plans to support employees through menopause and reduce their gender pay gap.
What Hospitality Leaders Need to Do Now
- Audit Your Policies and Contracts – Review and upgrade your recruitment and probation processes.
- Get Ahead of Harassment Reforms – Review your culture, complaints procedure, and manager training (especially for customer-facing teams).
- Plan for Shift Notice Rules – Zero hours workers need better scheduling, documentation, and contingency plans.
- Prepare for Tribunal Risk – With longer timeframes and lower barriers to claim unfair dismissal, good documentation and clear processes are more important than ever.
Final Thought
Yes, this is a big shake-up. But it’s also a brilliant chance to tighten up how you manage your team, from day one to year ten.
Recruitment, onboarding, training, and communication; when these things are done well, they don’t just protect you, they power up your whole business.
So, while the Employment Rights Act might sound like a compliance headache, it’s actually a springboard for better people practices and better performance.
If you’d like support reviewing your policies, updating your training, or just making sure you’re ready, get in touch. We’ll help you turn these changes into a real advantage.