Employment Rights Bill 'not without cost' for sector

The Employment Rights Bill, introduced in Parliament today (Thursday 10 October), aims to tackle poor working conditions and benefit businesses and workers alike with 28 new measures detailed.

UKHospitality (UKH) chief executive Nicholls said: “Ultimately, as it has done so far, working with business groups and unions to strike a balance for the good of businesses and workers alike will be critical to the success of this Bill.”

Under the new “pro-business, pro-worker” approach, workers will receive stronger protection from unfair dismissal from the first day in a job.

Though new starters will be subject to a nine-month probation period where they can be sacked without a full process.

Employees will also be able to claim statutory sick pay from the first day they are ill as well as unpaid parental leave from day one.

Positive and necessary steps

Night-Time Industries Association (NTIA) CEO Michael Kill said the bill represented a “significant shift” for workers across the UK, in particular for sectors like hospitality.

He continued: “Provisions such as day-one rights for unfair dismissal, enhanced protections for parental leave and sick pay, and a statutory probation period for new hires signal a new era for employee rights."

In addition, Kill praised the introduction of more “inclusive” policies, including flexible working conditions alongside requirements for action plans addressing gender pay gaps and support for female employees through menopause, which he said were “positive and necessary steps”.

Though the changes do not come without some difficulties for employers.

“However, it is vital these adjustments are balanced with the operational realities faced by businesses, especially those that operate during night hours and have specific staffing needs”, the CEO cautioned.

The Government also revealed plans to eradicate zero-hours contacts, which it described as “exploitative”, unless an employee chooses a zero-hours contract, as well as age bands in the minimum wage.

"These changes are not without cost. That’s why the Government should take its time to get the details right, through close consultation with businesses to avoid unintended consequences."

This, Kill warned, would have a “profound effect” and presented a “significant challenge” for the sector, which he said was one of the largest employers of those aged under 30.

He continued: "While we fully support fair pay and would like to offer higher wages to our younger staff, these changes must be made in a way that businesses can afford.

“If wage increases outpace a business’s ability to manage rising costs, it could be counterproductive, leading to reduced job creation and even closures.
"Many businesses in the night-time economy and events sectors also rely on the flexibility of zero-hours contracts, particularly around seasonal work, and any drastic changes could impact our ability to remain competitive.”

Though Nicholls praised the decision to allow workers to choose a zero-hours contract if desire.

She said: “One of our primary messages during a long period of dialogue with Labour in opposition and in Government was to recognise the importance of flexibility to both workers and businesses, and I’m pleased it has done that today.

Inflicting damage 

“Protecting the right for employees to access zero hours contracts when they want them, instead of an outright ban, is a good example of how working together can avoid those potential pitfalls but still eliminate exploitative practices.

"Zero hours contracts are the desired contract for 90% of people on them, who actively seek the flexibility to accommodate their lives as working parents, carers, students and many more who lead busy lives.”

Most of the planned changes will not take effect before autumn 2026 following a period of consultation, which Kill said afforded the sector time to “engage with the Government”.

Nicholls added rushing to introduce the measures would be the “wrong thing to do”.

She continued: “These changes are not without cost. That’s why the Government should take its time to get the details right, through close consultation with businesses to avoid unintended consequences.

“Rushing to introduce measures too quickly would be the wrong thing to do and would increase the chances of inflicting damage to sectors like hospitality, an employer of 3.5m people and a provider of some of the most flexible roles in the economy.”