The Employment Rights Act: what hospitality employers must do, and when
Benjamin Sawyer · 6 July 2026 · 5 min read
Updated 30 October 2026
The Employment Rights Act 2025 is arriving in stages. Statutory sick pay from the first day of absence is already law. From 30 October 2026, employers must take all reasonable steps to prevent sexual harassment, including by guests. From 1 January 2027, staff can claim unfair dismissal after six months' service, not two years, with no cap on compensation. Guaranteed hours for zero-hours staff are still being consulted on. Update your contracts, probation, and policies now, and cost the sick pay into your rota.
Position as at 30 October 2026. I update this guide as each stage comes into force.
The timetable
| When | What changes | What it means in a venue |
|---|---|---|
| In force since 6 April 2026 | Statutory sick pay from day one, with no lower earnings limit; day-one paternity and unpaid parental leave; holiday records kept for six years | Every absence now costs from the first day, including for low-paid and part-time staff |
| In force since 1 October 2026 | Employment tribunal claims can be brought up to six months after the event, not three | Problems you handle badly stay live for longer |
| From 30 October 2026 | A duty to take all reasonable steps to prevent sexual harassment, including by third parties such as guests | Your team must be protected from customers, not only from each other |
| From 1 January 2027 | Unfair dismissal claims after six months' service; the cap on compensation removed; dismissing someone to force new terms becomes automatically unfair | Probation, records, and fair process matter from the first week |
| By the end of 2026 | New tipping duties: consult staff on your tipping policy and review it every three years | See my guide to tips and troncs |
| 2027, dates to be confirmed | Guaranteed hours for zero- and low-hours workers; reasonable notice of shifts; payment for short-notice cancellations | The flexible rota as most venues know it will change |
Sick pay from day one
Statutory sick pay is now paid from the first day of absence, at the lower of £123.25 a week or 80% of the employee's average weekly earnings, and it applies to everyone, however little they earn. For venues that relied on the old three-day wait, it is a real cost.
Cost it in. Look at your absence over the last year, multiply it out at the new rules, and add it to your labour budget. Then look at why people are off. Absence is often a sign of rotas that are too long, too unpredictable, or too unfair, and fixing those saves more than any policy.
Harassment, including by guests
From today, employers must take all reasonable steps to prevent sexual harassment of their staff, and that includes harassment by customers. In hospitality, where staff deal with the public late at night and often around alcohol, this matters more than in most sectors.
Reasonable steps means a written policy people actually know about, a clear way to report a problem, managers who act on it, and a team who know they will be backed if they refuse to serve someone or ask them to leave.
Six months, not two years
From 1 January 2027, anyone with six months' service can claim unfair dismissal, and the cap on compensation goes. Because of the six-month qualifying period, that effectively covers staff who started from 1 July 2026.
This is where many independents are exposed. Use probation properly: set clear standards at the start, review them in writing, and deal with problems early and fairly. Keep notes of conversations and warnings. A dismissal that would have been safe in month eighteen under the old rules can now be challenged in month seven.
Guaranteed hours: prepare, do not change yet
The rules for zero- and low-hours workers, guaranteed hours based on what people actually work, notice of shifts, and payment when a shift is cancelled at short notice, are still being consulted on, with no date fixed. Do not rewrite contracts yet. Do start recording the hours your flexible staff actually work, week by week, so you know what you will be dealing with when the rules arrive.
What to do this month
- Check that payroll is paying sick pay from day one, and add it to your labour budget.
- Write or update your harassment policy, brief the team, and make sure managers know they will be backed.
- Review your contracts and probation process before 1 January.
- Start recording actual hours for flexible staff.
This is general information, not legal advice. Take advice on your own contracts and policies.
If you would like help rebuilding your rotas, policies, and labour budget around the new rules, Run does that alongside everything else in the business.