The new Government faces challenges in delivering on promises made in opposition and during the election. Promises of fiscal reform and sweeping changes to Employment Law may have appealed to voters but they could be difficult to fulfil.
The British Retail Consortium recently warned the Chancellor that the impact of budget increases to National Living wage and Employers’ National Insurance contributions would be increases in prices and job cuts. The Hospitality sector may face further cost challenges resulting from new employment rights contained in the Employment Rights Bill 2024 which sets out plans for wide ranging changes to UK employment law.
The bill contains ambitious proposals for changes to UK employment practices but much of the detail of how the new law will be implemented is unclear pending parliamentary debate and public consultation. The most significant changes impacting the hospitality sector are likely to be the right to protection against unfair dismissal for employees from day one of their employment and a right to guaranteed hours.
Day 1 protection against unfair dismissal:
For many years employees were required to work for a period of 2 years before they qualified protection against unfair dismissal. This permitted maximum flexibility for businesses to restructure or fast track the departure of new employees who did not meet expectations.
The new legislation will repeal the 2-year qualification period and employees will be protected against unfair dismissal from the first day of employment. Employers must ensure that every dismissal is technically “fair” or risk facing an expensive and time-consuming Employment Tribunal claim. This risk will result in more emphasis on following recognised policies and procedures prior to terminating employment and prevent on the spot/heat of the moment dismissals.
These legal changes will have a significant impact on the way that businesses manage staff and inevitably increase time spent on HR issues. However, in guidance issued to accompany the Bill it is suggested that Government will consult on the concept of a “statutory probationary period” (possibly for the first 9 months of employment), during which a “lighter touch and less onerous process” would apply. The outcome of this consultation will be significant because this has the potential to water down the impact of the day 1 rights and allow employers some time to decide whether a new employee can make the grade.
Zero Hours/Guaranteed hours
The Government has said that it is committed to ending Zero-hour contracts but the new legislation does not implement a ban. Instead, there is a new obligation to offer guaranteed hours to “qualifying workers” (who will be able to reject the offer). Further details of this proposal are awaiting following consultation, but the intention will be to require an offer of the hours actually worked over the preceding “reference period”. The Hospitality sector will have the opportunity to engage in the consultation process and until that process is complete, the details of the scheme are vague. It appears that Zero hours contracts will remain an option for those employees who wish to work on that basis, and this may cover many casual/student workers who are employed in the sector.
Further provisions in the Bill will give employees the right to reasonable notice of a change in shift as well as a right to payment for a shift which is cancelled, moved or curtailed at short notice. Following consultation, it will become clear what minimum period of notice would be required to be “reasonable”.
UK Hospitality have already informed the UK Government that these changes will come at a cost and a better understanding of the level of additional expense will be clearer when the consultation process is complete and further Regulations are issued which set out the details of how the changes will be implemented.
If you have any queries about these suggestions, or the management of employees with the virus please do not hesitate to get in touch.
