Hospitality industry teetering on the edge of a crisis due to impending Employment Bill

In the dynamic world of business, one sector that has been experiencing a significant shift is the Hospitality and Leisure (HAL) sector. According to recent data, the most common claim brought against businesses in this sector is related to harassment based on a protected characteristic.

This issue is not being ignored. Catherine Johnson, a partner in Birketts, will represent the organisation "LawWorks," which focuses on increasing the volume of applications related to harassment and discrimination cases in Employment Tribunals. Johnson warns that the introduction of 'day one' rights under the Employment Rights Bill, if passed, will likely increase the volume of claims, especially in areas like harassment and discrimination.

The UK hospitality industry has been hit hard by recent tax increases. Since Chancellor Rachel Reeves's tax increases took effect in the autumn Budget, the sector has shed 69,000 jobs. Despite these challenges, the number of Employment Tribunal claims in the HAL sector remains high, with an average of 44.53 claims over the past two years. This figure is 12% higher than the average across all sectors.

The Employment Tribunal is currently dealing with a backlog of cases due to the pandemic. However, data from the Ministry of Justice (MoJ) reveals that the open caseload at the Tribunal increased by 32% from January to March 2024/25 compared to the same quarter the previous year.

It's worth noting that over 70% of claims in the HAL sector were settled before reaching a final hearing. The most common reasons for settling claims include management time, poormerits, and reputational risk.

Given these trends, employers in the HAL sector must act now to strengthen their internal processes, provide robust training to line managers, and ensure grievances are handled effectively to avoid costly and time-consuming Tribunal proceedings. HR teams in the sector spent an average of 4.32 working weeks dealing with Tribunal claims over the two-year period, underscoring the need for proactive measures.

The Employment Rights Bill, if passed, will introduce a major overhaul of workers' rights, which could further impact the HAL sector. As the landscape continues to evolve, it's crucial for businesses to stay informed and adapt to these changes to ensure a fair and inclusive workplace for all.