The hospitality and leisure (HAL) sector is already grappling with a surge in Employment Tribunal claims, a situation set to escalate further when the Employment Rights Bill is enacted.
Birketts law firm has shared new research with City AM, revealing that over the past two years, the hospitality and leisure sectors have received an average of 44.53 Tribunal claims, a figure 12 per cent higher than the average across all sectors, as reported by .
The study, which surveyed 500 HR professionals in England and Wales, found that the most frequent claim lodged against businesses in this sector was harassment based on a protected characteristic.
Over 70 per cent of claims in the hospitality and leisure sector were settled before reaching a final hearing, a rate Birketts noted as higher than the average across all sectors.
The most common reasons for settling claims included management time (28 per cent), poor merits and reputational risk. As a result of the increase in claims, HR teams spent an average of 4.32 working weeks dealing with Tribunal claims over the two-year period.
However, the forthcoming Employment Rights Bill, if passed, will bring about a significant revamp of workers' rights, including the introduction of 'day one rights'.
The Employment Tribunal is already contending with a backlog of cases stemming from the pandemic, during which some courts were closed for extended periods.
In June, figures from the Ministry of Justice (MoJ) showed that the outstanding caseload at the Tribunal rose by 32 per cent from January to March 2024/25 compared to the same quarter the previous year.
The º£½ÇÊÓƵ hospitality sector is already grappling with the consequences of the autumn Budget, which witnessed a rise in employers' NICs.
Figures last month showed that the industry lost 69,000 positions since Chancellor Rachel Reeves's tax hikes came into force.
Catherine Johnson, partner in Birketts, cautioned: "The introduction of 'day one' rights under the Employment Rights Bill will likely increase the volume of claims, especially in areas like harassment and discrimination.
"Employers must act now to strengthen their internal processes, provide robust training to line managers, and ensure grievances are handled effectively. Failure to do so could result in costly and time-consuming Tribunal proceedings," she added.
