Employee Rights Bill update: Everything hospitality operators need to know

By alisonbarlow|Jul 22, 2025|10:19 pm BST

The Employment Rights Bill is a core piece of legislation introduced in October 2024 by the newly elected government. It proposed a significant overhaul of workers’ rights, with the government terming it a ‘once-in-a-generation’ update aimed at modernising employment laws and enhancing job security.

Almost a year to the day it was elected, on July 1st, the Government published its Employee Rights Bill Implementation Roadmap, which outlines the phased introduction of these reforms.

Main updates for the hospitality industry

The Implementation Roadmap includes information on the key measures set to take effect from April 2026. Some items of legislation, such as changes to zero-hour contracts and various tax updates, won’t come into effect until October 2026 or later in 2027. We expect guidance on those to be published closer to the time.

For the moment, the key legislation likely to impact hospitality operators is:

Day-one employment rights

From April 2026, employees will be entitled to range of statutory benefits and protections, including paternity leave, unpaid parental leave, and bereavement leave from their first day of employment. For the first time, bereavement leave may be extended to include pregnancy loss before 24 weeks.

Statutory Sick Pay (SSP) enhancements

The Bill proposes the removal of the Lower Earnings Limit for SSP eligibility, extending coverage to approximately 1.3 million low-paid workers. Additionally, SSP will be payable from the first day of sickness absence, eliminating the current three-day waiting period.

What does this mean for hospitality operators?

With a large, casual workforce and a heavy reliance on agency staff, the hospitality industry is very exposed to these changes. Operators need to be prepared for an increase in administrative responsibilities, as well as the additional costs associated with expanded employee rights, such as covering leave.

To navigate these changes effectively, hospitality businesses should:

• Review employment contracts to ensure they comply with the new day-one rights and accurately reflect working hours.
• Update HR policies to accommodate the enhanced SSP provisions and leave entitlements.
• Train managers to ensure they’re aware of the implications of the new laws and how to implement them.

What to expect after April 2026

While April 2026 marks the first wave of changes under the Employment Rights Bill, there are more legislative updates planned.  Hospitality employers should begin preparing now for the next phase of reforms, particularly those that will affect scheduling practices and contract structures.

Here’s what to keep on your radar:

Zero-Hours contract updates (expected 2027)

Employees working under zero-hours or on unpredictable contracts will gain the right to request a contract with guaranteed hours; those who are happy to continue on zero-hour contracts will be able to opt in to them. Employers will no longer be able to include exclusivity clauses in zero-hours contracts to prevent staff from taking on secondary employment.

Employers will also be required to give sufficient notice when scheduling shifts and avoid last-minute changes. If shifts are cancelled, shortened, or rescheduled without enough notice, they’ll need to compensate staff. These shift management rights and payment protections will likely be extended to agency workers, as well.

Abolition of ‘Fire and Rehire’ practices

Employers will be prohibited from using ‘fire and rehire’ tactics – where an employer fires an employee and then immediately rehires them on more favourable terms. This change aims to protect workers from abrupt and unfavorable changes to their contracts. The ban is expected to come into effect in October 2026.

Establishment of the Fair Work Agency

A new Fair Work Agency will be launched to enforce employment rights, including holiday pay and protections against unlawful practices. This body will serve as a regulatory authority to ensure compliance with the new laws. The agency is anticipated to become operational in late 2026.

Day-one employment rights (expected 2027)

From April 2026 employees will gain the right to claim unfair dismissal from their first day of employment, a shift from the current two-year qualifying period. Probationary periods will still be permitted, but employers must manage them carefully to ensure compliance. While this change is expected to increase the number of tribunal claims, it will improve job security for workers, giving them more rights from day one.

Preparing for long-term change

The Employment Rights Bill marks a major shift in the UK’s employment landscape, and the newly published Implementation Roadmap is just the beginning. While some reforms will take effect in April 2026, others are slated for later implementation, giving businesses time to adapt. For hospitality operators, who are particularly exposed to the changes, staying on top of incoming legislation will be critical.