A year in employment law and hospitality

Written by Jillian McLaughlan, senior solicitor, and Debbie Fellows, partner, Thorntons

Looking through the lens of the hospitality sector, Thorntons’ Jillian McLaughlan and Debbie Fellows reflect on last year’s changes in employment law.  

Holiday pay

In the first change of 2024, the Working Time Regulations 2024 were amended in January to simplify the calculation of holiday pay for part-year and irregular hours workers. This clarified the position following the much-discussed decision in the Harpur Trust v Brazel Supreme Court case. The new legislation allows for rolled-up holiday pay and holiday accrual on a pro-rata basis but only for part-year and irregular hours workers. For employers in the hospitality industry, in particular, the new rules are no doubt a hugely welcome change given the number of employees who work irregular hours and the potential for part-year workers.

Business transfer regulations

New regulations were introduced in July 2024 relating to the transfer of employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Previously, prior to a TUPE transfer employers were required to inform and consult with employee representatives; when there were none in place, representatives had to be elected for that purpose. Employers would only be able to consult directly with individual employees about a transfer where there were fewer than 10 employees working for the organisation in total.

However, the new regulations mean that where there is no existing representation, employers can consult directly with employees if:

• the business has fewer than 50 employees; or
• fewer than 10 employees are affected, regardless of the business size.

For small-to-medium employers, this is a significant change and should be a welcome one. This reduces the administrative burden and complexity of smaller-scale TUPE transfers that come in many forms and which we often see taking place across the hospitality sector.

Tips

October 2024 saw the implementation of the Employment (Allocation of Tips) Act 2023, which requires employers to ensure that tips, gratuities and services charges are passed on to their workers and employees in full. This applies to cash and card tips. There is also a requirement to have a policy in place for tipping. There will be more to come from this Act in the coming year, with it being a feature in the new Employment Rights Bill – specifically the obligation to consult on the employer’s policy on tipping. However, for now, employers must ensure they have mechanisms in place to allocate tips correctly and fairly among employees and that there are clear mechanisms in place for managing this.

Duty to prevent sexual harassment

The Worker Protection (Amendment of Equality Act 2010) Act 2023 came into force on 26th October, placing a statutory duty on employers to be proactive in preventing sexual harassment in the workplace. It provides that an employer must take all reasonable steps to prevent sexual harassment of employees in the course of their employment. For hospitality employers, the most important part of this legislative change is likely to be in relation to harassment by third parties. The new law provides that an employer must not permit a third party to harass their employee in the course of their employment and should take all reasonable steps to prevent the third party from doing so. Given the largely customer-facing nature of the hospitality industry, employers must update and ensure that policies and procedures for training employees around anti-harassment are tight. They must also ensure there are clear lines drawn in respect of what is and isn’t acceptable by employees and members of the public. Clear reporting lines for concerns need to be established and promoted and employers will need to act where there are any instances of harassment (or behaviour that may lead to this) being reported. There is an argument, given the potential ramifications for employers who don’t put these steps in place, that a zero-tolerance approach (particularly to customer harassment) should be taken.

Written by Jillian McLaughlan, senior solicitor, and Debbie Fellows, partner, Thorntons