Yesterday (Tuesday 1 July), the Government published its implementation roadmap for its Employment Rights Bill.
From early next year until 2027, various employment rights will be extended in stages.
This includes changes to statutory sick pay (SSP), day one rights for paternity and parental leave, zero-hours contracts reforms and day one rights for protection against unfair dismissal.
Trade body UKHospitality called on the Government to use the timelines to constructively engage with businesses on the detail of the policy.
Rethink required
Greater Manchester-based law firm Myerson Solicitors warned of the impact this will have on operators.
Senior associate in the company’s employment law team and head of the firm’s hospitality and leisure sector Jack Latham said: "Pubs have traditionally operated on tight budgets and low margins and have used every tool available to them to lower staffing costs.
“This has included employing younger staff on flexible terms to suit the needs of the businesses and having high staff turnover.
“The changes in the Employment Rights Bill, particularly relating to zero-hours workers having to be offer guaranteed hours and employees being protected from unfair dismissal from day one, will force businesses to rethink their recruitment strategies.
“The likelihood is that these changes will mean less flexibility and potentially higher labour costs, as well as increasing the risks of employment tribunal claims.”
Rocky road ahead
While longer term, the changes could be positive for businesses, the short term could be challenging, according to the expert.
“The changes to SSP, which are due to come into force in April 2026 include removing of the lower earnings threshold (where currently employees had to earn £125 per week to qualify) and ending the three-day waiting period before SSP is payable," Latham added.
“These changes may have the double effect of increasing paid sickness absences as well as creating the need to pay staff to cover missed shifts. The key to dealing with changes to SSP are for businesses to have robust absence procedures in place to manage absences correctly.
“While costs are obviously a key concern for pub businesses, the Government clearly hopes the effect of these changes will be a more stable and productive workforce.
“In our view, lower turnover in staff and recruitment costs can only benefit business in the long-term but it will be a rocky road”.
