Employment Rights Bill will hit the hospitality sector hard - ​Finlay McKay

While the implications of this Bill are far-reaching, Scotland’s hospitality sector is likely to be significantly impacted by this new legislation. The measures that will likely have the greatest impact on this key sector are new rights which aim to tackle zero hours contracts by giving workers guaranteed hours contracts, reasonable notice of shifts, and compensation for short-notice cancellation of shifts.

Employers will be obliged to offer employees deemed as ‘low hours’ staff a contract with increased hours if, over a 12-week period, their actual working hours exceed those set out in their contract. While much of the detail for these measures is still unknown, there are concerns that the onus is on the employer to offer the guaranteed hours, rather than the previous Government’s solution where a worker would have a right to request a predictable working pattern.

The removal of the current three-day period before workers are entitled to Statutory Sick Pay is also set to have a profound effect on the hospitality sector. This measure imposes a direct increase on wage costs for employers at a time when the National Living Wage is also due to rise next year.

Along with a proposed lowering of thresholds for union recognition, another key aspect of the ERB which raises particular concerns within the hospitality sector is the provision enabling employees to bring a claim for third-party harassment. This would effectively mean that a bar or restaurant worker who is subjected to racist or sexist comments from a customer could bring a claim against their employer if they believed their employer had failed to take ‘all reasonable steps’ to prevent this.

While they will enhance workers’ rights, these new measures are likely to significantly increase the cost of employing casual labour. This is a real concern for the Scottish hospitality sector which contributes £8bn to the economy and currently employs over 220,000 people.

The ERB brings significant administrative burdens including the requirement to track shifts and offer new contracts to certain employees with variable hours. While this will impact many sectors, it’s set to have a particularly stark effect on hospitality employers who must deal with seasonal fluctuations and can be reliant on flexible working practices often involving agency staff.

The UK Government is still to set out many of the details regarding the definition of low hours staff and notice periods for shift cancellations but there seems little doubt that it will be a challenge for the sector to manage this loss of flexibility.

UKHospitality, the trade body representing British hospitality, is pressing the UK Government on its concerns, calling on ministers to ensure the “unique circumstances” of the industry are reflected in the ERB legislation as it goes through Parliament.

In the meantime, it is important for all employers, especially those within industries like hospitality that will be most impacted by the ERB, to prepare themselves as best they can for the forthcoming legislative changes. Introducing a system that better enables employers to track hours worked and monitor shifts and making improvements to work allocation planning is strongly advised as we await clarification of the further details around the Bill.

Improving UK workers’ rights was a key election manifesto pledge and is broadly welcomed by employers including those within the hospitality sector. It is however important that the final legislation strikes the right balance between achieving this intended aim while not stifling economic growth.

Finlay McKay is a Partner and employment law specialist at CMS