The Employment Legislation Changes You NEED to Know About

The Employment Rights Act became law in December 2025, but the changes didn't happen immediately. Rather than arriving all at once, its changes are being introduced in stages between now and 2027. April brought the first batch, which included paying sick pay from the first day of somebody's illness instead of the fourth, allowing new fathers to take paternity leave from their first day in the job rather than after a qualifying period, and a requirement to keep records of holiday taken and holiday pay for six years. The next batch arrives within weeks.

The change that worries most operators comes on 1 January. At the moment, somebody has to work for you for two years before they can take you to an employment tribunal claiming they were dismissed unfairly, which means that if a new starter turns out to be wrong for the job, you can let them go without much risk of a claim. From 1 January, that two year period drops to six months, and it counts time people have already worked for you. So somebody who joined you in July 2026 will have full protection on 1 January 2027, and from that date, letting them go requires a proper reason and a proper process, or you risk a claim.

Running underneath all of this is a shift in what the law asks of you. Until now, if something went wrong in your business, the question afterwards was whether you dealt with it properly. From this autumn, the question is what you had in place beforehand to stop it happening at all, and your team gets twice as long to raise it. That means the things you write down now, in your rotas, your incident notes and your training records, are what you will be judged on later.

Much of what follows comes from the HR round table we ran in July with Electric Mayonnaise and Anchor HR, where a room of senior people from independent groups worked through what each change means in a real business rather than on paper. The first part of this piece covers what is actually changing in law, set out as what is changing, how it will affect your business and working practice, and what you need to do about it. The second part covers the things that are not changing at all, but which are where you have the most control over how much any of this costs you.

IN SHORT (The TL;DR)

• Within days: The government is asking for views on the new rules covering how tips are shared out, and the deadline to respond is 29 September.
• From 1 October: Anyone who wants to take you to a tribunal gets six months to do it instead of three.
• Within weeks: From 30 October you have to do more to prevent sexual harassment, you become legally responsible when a customer harasses one of your team, and you have to tell every worker in writing that they are allowed to join a trade union.
• Before 31 December: Anyone still working for you on 1 January who has been there six months can claim unfair dismissal (it was previously two years), so if somebody is not working out, that decision needs making in October, or November at the very latest, so their notice period finishes before the year ends.
• During 2027: People on zero hours contracts gain the right to be offered a contract with guaranteed hours, to be told their shifts in advance, and to be paid when a shift is cancelled at the last minute.
• And separately: Probation, fixed-term contracts, absence reporting and your facilities are not changing, which is precisely why they are the four things worth spending your time on.

Part 1: The Changes

1. Unfair dismissal after six months instead of two years

What is changing. From 1 January 2027, somebody can bring an unfair dismissal claim once they have worked for you for six months, rather than the two years required today. The cap on how much a tribunal can award for unfair dismissal is also being removed. From the same date, dismissing somebody and then rehiring them on worse terms becomes automatically unfair in almost all circumstances.

The affect on you
The detail that catches people out is that the time somebody has already worked for you counts towards the six months. This is not a rule that starts counting from January. Somebody who started with you in May 2026 will have eight months of service on 1 January and will have full protection from that day. In practice, that means almost everybody currently on your payroll will be protected on 1 January, and the only people who will not be are those who joined after roughly the beginning of July this year.

What that leaves you is a narrow window. If there is somebody in your business who is not working out, the decision is considerably simpler to make in October than it will be in February, and it needs making early enough that their notice period finishes before 31 December.

What to do.

• You should immediately consider everybody with less than two years' service whose performance is a genuine concern.
• Make those decisions in October, or November at the very latest, so that notice periods run out before the end of the year. A person told in November at least has a chance of finding another job before Christmas.
• Put a date in the diary to do this, rather than waiting until things quieten down, because things will not quieten down between now and Christmas.

2. People get six months to bring a tribunal claim, instead of three

What is changing 
At the moment, somebody who wants to bring a claim to an employment tribunal has to start the process within three months of whatever they are complaining about. From 1 October, they get six months instead. This applies only to things that happen on or after 1 October, so if the incident happened in September, the old three month deadline still applies. If somebody is complaining about something that happened repeatedly rather than once, such as being underpaid every month, the six month deadline runs from the last time it happened. In Scotland, claims about breach of contract switch over slightly later, on 9 November.

The affect on you
The practical effect is longer than three extra months, because of what happens before a claim reaches a hearing. Anybody who wants to bring a claim must first go through a process called early conciliation, run by Acas, which is the free public service that tries to get employers and employees to settle without going to court. That process used to last up to six weeks and was extended at the end of last year to twelve. So somebody who leaves your business in November now has until May to decide whether to make a claim, and can then spend up to three months in conciliation after that, which means you might first hear about a formal claim eight or nine months after the person left.

Then there is the wait for a hearing. Government figures published in June showed that the number of new claims went up by 39% in a year while the number of cases resolved fell by 12%, so 55% more cases are now sitting unresolved than a year ago. Employment lawyers are warning that businesses are waiting at least three years for a hearing, and in some cases more than five. For you, that means a dispute you thought had gone away can reappear the better part of a year later and then sit unresolved for years after that, which is money you cannot count on and a liability you have to declare if you are refinancing or selling.

There is one more consequence worth naming. Somebody who previously had to decide within three months often ran out of time before they got advice. With six months, they have time to speak to a solicitor, gather evidence and put together a properly argued case, so the claims that do arrive are likely to be stronger.

What to do

• Work out where you keep records of people decisions, and set those systems to hold them for at least six years rather than deleting them when somebody leaves.
• Insist that whenever a manager makes a decision about a person, they write down at the time what they decided and why. In three years nobody will remember the conversation, and the note is the only thing that will exist.
• Tell your managers that WhatsApp messages about staff can be requested as evidence in a tribunal claim and read out in a hearing. If they would not want it read out, they should not write it.

3. You have to do more to prevent sexual harassment, and you become responsible for customers

What is changing
Since October 2024, you have had a legal duty to take "reasonable steps" to prevent sexual harassment of your staff. From 30 October, the wording changes to "all reasonable steps". At the same time, a new rule makes you legally responsible when somebody who does not work for you harasses one of your team, which in our industry usually means a customer, but also covers contractors, suppliers and delivery drivers. You can defend yourself, but only by showing that you had already taken all reasonable steps to prevent it. This second rule covers harassment linked to any of the characteristics protected by the Equality Act, which includes race, disability, religion, sex, age and sexual orientation, so a guest racially abusing a chef counts just as much as a guest making sexual comments to a server.

The affect on you
The change from "reasonable steps" to "all reasonable steps" sounds like a small edit. It certainly is not, because it changes the question a tribunal asks. Today, if you are challenged, you show what you did: you had a policy, you ran training, you dealt with the complaint. From 30 October, a tribunal will instead ask whether there was anything else you could reasonably have done that you did not do. Having a policy is no longer an answer if the tribunal decides you could obviously also have trained your team, or moved a member of staff away from a customer who had behaved badly before, and chose not to.

The financial side is the part operators tend to underestimate. In most tribunal claims there is an upper limit on what you can be ordered to pay. In harassment claims there is no upper limit at all. On top of that, if the tribunal decides you failed in your duty to prevent harassment, it can increase whatever it has awarded by up to a quarter. And since April there is a second consideration: an employee who reports sexual harassment now has the same legal protection as a whistleblower, which means that if you treat them badly afterwards, or they feel pushed out for having raised it, that is a separate claim on top of the original one.

The reason this legislation is aimed squarely at our industry is not flattering but it is accurate. A survey by the union Unite found that 47% of hospitality workers had experienced sexual harassment and 69% had witnessed it. Research from Sheffield Hallam University found that people working in hospitality on zero hours and other insecure contracts are 60% more likely to report being harassed than the average UK worker, and that women are twice as likely to report it as men, in a workforce where 54% of people are women and 52% are low paid, compared with 15% of workers across the economy as a whole.

One of the most useful things said at the round table was that the problem in most businesses is not the policy, it is that the response varies. One head of people described it plainly: sometimes an incident happens on a Friday night, the manager handles it beautifully and it reaches head office on Monday morning, and sometimes an identical incident happens on a Friday night and nobody says anything until the following week, when the person involved finally raises it because they still feel awful about it. Your team needs to be confident the response will be the same every time, whoever is on shift and however much the guest is spending.

What to do.

• Write down what harassment actually looks like in your business, sorted into levels of seriousness. The approach one operator in the room had taken was five levels, starting at level one for things like repeated unwanted comments and ending at level five for behaviour that is criminal. The reason for doing this is that most managers and most team members genuinely do not know where the line sits, so they either overreact or say nothing.
• For each level, decide in advance exactly what the business does. That means what happens in the venue at the time, who is responsible for acting, and what is said to the customer, ranging from moving a team member to a different section, through to asking somebody to leave, through to banning them from all of your sites.
• Before you publish any of that, show it to your legal adviser. The risk is that you describe something as a minor incident when the person it happened to considers it serious, and once you have written down a response that falls short of what they expected, that document can be used against you.
• Train every manager and every head office employee once a year, and train your team members too, because the point of the training is that the person clearing table nine knows who to tell and what will happen next. Keep a register of who attended and when.
• Write down an honest assessment of where the risk sits in your business: which shifts, which roles, which parts of the room, which regular customers, and what you changed as a result. This document is the single most likely thing to be asked for if you are ever challenged, and it is the one almost nobody has.
• Tell customers what behaviour you expect before they arrive, by putting it in booking confirmation emails and in your terms and conditions. The round table was sceptical about signage in venues, on the basis that posters spoil the atmosphere and somebody who is going to abuse your staff is unlikely to be stopped by a laminated notice.
• Ask your legal adviser to add a clause to your supplier contracts confirming that the supplier takes responsibility for its own employees and has its own harassment policy. This works much like the modern slavery clauses you may already have, and it matters for anyone who has contractors on site, including early morning deliveries.

5. Tips

What is changing
You already have to pass on all tips to staff without taking anything out of them, share them fairly and keep a written policy explaining how you do it. Three things are being added. You will have to consult your team before you write or change that policy, either through union or staff representatives if you have them or directly with your workers if you do not. You will have to share an anonymous summary of what people said during that consultation. And you will have to revisit the policy at least once every three years. The government is currently asking for views on the detailed guidance, and that consultation closes at 11:59pm on 29 September, with the new requirements and the updated code both expected to take effect in late 2026, once Parliament has approved them.

The affect on you
For most independent operators this is less frightening than it sounds, as long as you have written down why your tips are shared out the way they are. Giving different roles different shares, anywhere from two points to ten, is perfectly defensible if you consulted people properly and can explain your reasoning. What you cannot defend is an arrangement that nobody has ever explained to the people it applies to.

There is one proposal in the draft that deserves a closer look, because it may affect you directly. The draft code discourages giving fixed, minimum or guaranteed amounts to a named person or to a particular category of worker. Where a guaranteed element applies to one group only, that is a fair criticism, because it pushes all the variability in a quiet month onto everybody else. But plenty of operators guarantee a minimum across the whole team precisely so that staff can budget, which is a different thing entirely, and as the draft is currently worded it is not clear that arrangement survives. If that describes your scheme, this consultation is where you say so.

One further detail catches out groups with a head office. Head office staff count as part of the scheme where their job involves dealing with guests, so somebody in your reservations team who speaks to guests on the phone every day should be included. Reservations and events teams are usually the clearest cases.

What to do.

• Respond to the consultation before 29 September The consultation document contains a change log setting out what differs from the 2024 code, which is the quickest way to see whether anything affects you, and the draft code itself is there in full.
• Read your own tips policy as though you were a member of staff seeing it for the first time, and ask whether it actually explains how somebody's share is worked out.
• Check whether anyone at head office deals with guests, and therefore ought to be included.
• If some people receive a guaranteed minimum share and others do not, look at that arrangement now in light of the draft, make sure anything above the minimum is paid out regularly, and make sure your team has been consulted, agrees, and that you have written down what they said and what you decided as a result.

6. Zero Hour Contracts

What is changing
During 2027, people on zero hours contracts, and those on contracts with very few guaranteed hours, gain three new rights: to be offered a contract with guaranteed hours that reflect the hours they have actually been working, to be given reasonable notice of their shifts, and to be paid something when a shift is cancelled, cut short or moved at short notice.

The detail is still being decided. The government has said it would prefer to look at the previous twelve weeks when working out somebody's average hours, and to include anyone whose contract guarantees fewer than somewhere between eight and twenty hours a week, but none of this is final. The industry argued for a fifty two week window instead, on the reasonable basis that twelve weeks which happen to include Christmas give a completely misleading picture of what somebody normally works, and would have you offering a permanent contract based on December trade. UKHospitality has warned that the cost of these reforms may outweigh the benefit to workers, pointing out that the sector has already absorbed more than £5bn in additional employment costs over two years, with more than 100,000 jobs lost.

The affect on you
Two points from the round table are worth understanding properly, because they change how you should think about this.

The first is that a good deal of this is arguably already the law. There is a legal principle called custom and practice, which means that if you do something consistently over a long period, it can become part of somebody's contract regardless of what the contract document says. If you have been giving somebody thirty hours a week for the last year, a tribunal may well already treat thirty hours as their entitlement. The industry has largely been getting away with not honouring that, and the new legislation simply brings it into the open and puts a process around it.

The second is that your rota stops being a flexible document. If you write a standby shift into a published rota, the view in the room was that you have scheduled that person and you owe them the shift. Once rotas are published you will not be able to trim hours when a week turns out quieter than you hoped, which means the rota has to be right when you publish it, and that depends on whether your managers can forecast.

What to do.

• Train your managers to forecast sales and staffing properly. This is the single biggest lever, because once you cannot cut hours after publication, an optimistic rota becomes a direct cost.
• Stop writing standby shifts into published rotas.
• Put in place a way of recording agreement whenever a rota changes after it has been published, including the everyday situation where somebody genuinely volunteers to go home early on a dead Tuesday. You need the person's name, the date, the time and an actual confirmation from them, whether that is a signature, a note against their clock-out record, or an acknowledgement through your rota system. A manager writing "she was happy to go" is not enough, because it can be disputed later.
• Understand that when you offer somebody guaranteed hours, they are allowed to decline, but you have to be able to prove you made the offer, and you have to keep making it at intervals rather than asking once.
• Run the numbers now. Take your current team, work out their average hours over the last twelve weeks, and look at what you would be obliged to offer if the rules came in tomorrow. It is much better to find out in 2026.

7. New trade union rules

What is changing
Three things, and the first is the reason the other two matter.

The bar for a union to be recognised has dropped, and this already happened in April. Recognition is the point at which you are legally obliged to negotiate with a union over pay and conditions for a defined group of your staff. Previously, a union applying to the Central Arbitration Committee, the body that settles employer and union disputes, had to show that 10% of that group were members and that a majority would probably back recognition, and then win a ballot by both a majority of those voting and a yes vote from 40% of the whole group. The second hurdle at each stage has now gone. A ballot is won on a simple majority of those who vote, with no minimum turnout. Take a group of 100 staff: if 60 vote and 35 say yes, that used to fail, because 35 is below the 40 needed. The identical vote now wins. And if you're a team of 10, they only need one person to vote yes. 

Then, from 30 October, you must give every worker a written statement telling them they have the right to join a union, issued alongside the written summary of terms you already give new starters, and repeated to your existing team at intervals still to be confirmed. From the same date, unions can legally request access to your workplace, in person or digitally, to meet, support, represent or recruit your staff. If you cannot agree terms with them, they can ask the Central Arbitration Committee to set those terms for you.

The affect on you
The three work together, which is why they are best treated as one problem. The bar has fallen, you must now tell everybody that unions exist and they can join, and unions have a legal route into your building to make that case. A business with no union history can reach a recognition application faster than most operators expect. Once a representative is established you are obliged to engage with them, and because the group a union bargains for is not limited to its own members, a very small number of sign-ups can end in negotiation on behalf of your whole team. There is also an unintended effect worth knowing: if a union opens negotiations on company sick pay, an operator considering five days has little reason to offer them, knowing the union will return asking for eight, so the simpler position becomes holding at the statutory minimum.

What to do.

• Draft the written statement now, build it into your new starter paperwork and induction, and work out how it reaches your existing team.
• Decide in advance what access you would offer, for example a table in the restaurant during afternoon breaks, and separately what you would actually negotiate on, so you are not deciding under pressure.
• Show your team they do not need a union to be heard: run an engagement survey, publish the results and an action plan, and visibly follow through. The room worked to 70% completion as the benchmark, though this is their working figure rather than a legal threshold.
• Avoid the tactic of quietly agreeing terms with a friendly union ahead of a hostile approach. You risk being bound to a union that ends up with no members in your business at all.

Part 2: What You Can Control

Probation periods

Why this matters now
Probation is the crucial period during which you assess whether they are right for the job, and during which you can usually end their employment using a shorter and simpler process than your full disciplinary procedure. It's generally three months, but some companies operate on a six month standard, and even those who stick with three will often extend it to six or beyond if they're still uncertain about a candidate. But From January, every staff member has full protection from six months, so if you find that they're not suitable for the role after that time, you risk an unfair dismissal claim.

What goes wrong
If your standard probation is six months and somebody reaches five months and then goes off sick, you cannot hold a review while they are absent, you cannot extend the period, and they quietly pass the six month mark and gain full employment protection without you ever having made a decision about them.

What to do

• If you keep a six month probation, treat month five as the absolute deadline for a decision, and train managers to make the call at around four and a half months so there is time to act.
• Consider moving to a three month probation with the option to extend it to six. That gives you a genuine decision point and a second chance if you are not sure.
• Schedule the probation review for the end of a structured induction programme, rather than relying on a manager remembering. One group in the room built a six week training programme for new starters and deliberately set the review for the week it finished, so the conversation happens automatically.
• State clearly in your contracts and your handbook that a shorter, simpler process applies during probation than your full disciplinary procedure. If you do not say so, you may find yourself obliged to follow the full procedure anyway.
• Train your managers to interview properly, because most probation problems are hiring problems that arrived three months earlier.

Fixed-term contracts

Why this matters now
The law here is not changing, but the January change makes a common practice considerably riskier, because a fixed-term contract is often used precisely to avoid somebody accruing rights, and the threshold for those rights is about to drop to six months.

What goes wrong
Two things, commonly. The first is assuming that because a contract has an end date, you can simply let it run out. If the job itself is continuing, and somebody else is doing substantially the same work, ending that contract counts as a redundancy, which means you have to run a proper redundancy consultation covering everybody doing that job, not just the person whose contract expired. The second is moving somebody from one fixed-term contract straight onto another. Their service adds up, so once the total passes six months, they have full unfair dismissal protection from January anyway, and you have ended up exactly where you were trying not to be, having paid for the paperwork in between.

What to do.

• Keep fixed-term contracts to a maximum of five months, with a real break before you take somebody back on.
• Keep seasonal contracts genuinely seasonal. Taking somebody on from September to Christmas, leaving a genuine gap, and bringing them back for the summer is defensible because the work really is seasonal. A twelve month head office contract that you then renew is not.
• Look at every fixed-term contract you currently have running, and ask yourself now whether the job behind it is going to continue. If it is, you are looking at a redundancy process, and it is better to know that in advance.

THE FINAL WORD

Taken together, these changes move the question the law asks from how you responded, to what you had in place beforehand. For an industry that runs on decisions made quickly, by managers who are also expediting a pass or running a floor, that is a genuine shift, and it will cost most operators time and administration before it saves them anything.

It is worth saying plainly that what sits behind all this is something our industry should want. A sector where nearly half the workforce has experienced harassment, where the people on the least secure contracts are the most exposed, and where the response to a serious incident depends on which manager happens to be on that night, cannot credibly argue it should be left to sort itself out. The businesses that get this right will not only avoid a tribunal, they will find hiring easier, because the people we are all competing for have noticed which kitchens and which floors look after them.

As ever, please get in touch with your questions, your worries and your experiences of putting this into practice. The more we hear from you, the better we can advocate for the realities of running and working in hospitality today.