Employment Rights Bill could spell challenges for hospitality trade
The first House of Lords committee debate took place this week on the Employment Rights Bill after its successful passage through the House of Commons.
The bill, which will see signification changes to the zero-hour contract model, has garnered a mixed response from the hospitality and retail sectors.
A recent British Retail Consortium survey showed that 70% of HR directors from leading retailers felt the new legislation could have a negative impact on their business. The most significant concern was the right to guaranteed hours encoded in the bill. This is likely reflective of concerns in hospitality due to the similarities in employment models used in the two sectors.
The proposed changes mean employers will now have to offer workers on zero or low hours contracts a guaranteed number of hours. This figure is based on the average number of hours worked per week, likely calculated over a 12-week reference period.
The aim of the employment law refresh is to end one-sided flexibility and exploitative zero hours contracts. This is touted to ensure greater security and employment predictability for workers, allowing them to better plan their finances and lives.
Audit, tax and consulting firm RSM UK warns, however, that changes could lead to pain for hospitality employers with a greater administrative and financial burden placed upon them.
Charlie Barnes, RSM UK’s head of employment legal services, commented: “While the government has taken a sensible step in not banning flexible contracts completely, there are still grave concerns from the hospitality and retail sectors already struggling with national insurance and wage cost increases.
"If the bill is implemented in its current form, the general consensus is that this will lead to a reduction in hiring as employers look to offset increased administration costs and take a more cautious approach on recruitment.
“The harsh reality is that this could even lead to less opportunities for those who value or rely on the flexible nature of casual work. Unfortunately, those employers trying to do the right thing will find themselves burdened with increased administration, and an obligation to provide work for a set number of hours, even where the need isn’t there.
“This will ultimately drive-up prices and push employers to consider other ways to plug labour gaps, e.g. offering more overtime to existing workers, or turning to automation and new technologies where possible, rather than hiring more people.”
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