The Employment Rights Act 2025 is bringing some of the most significant changes to employment law in a generation. For hospitality businesses, the implications are real and immediate. From 6 April 2026, employers are required to keep detailed holiday pay records. The new Fair Work Agency launched this month, consolidating enforcement of holiday pay, national minimum wage and employment agency standards with its powers being phased in over the coming months. Additional tipping obligations, including a duty to consult workers on tipping policies and review them every three years, are due in October 2026. With trade union recognition rules already simplified and further access rights expanding later this year, businesses that have never had to think about collective bargaining may need to start doing so. And from January 2027, the qualifying period for unfair dismissal reduces from two years to six months with the compensation cap removed entirely. In a sector where short-term and seasonal contracts have traditionally offered a degree of protection from tribunal risk, that changes the picture significantly. And that is before we even start talking about changes to zero and low hour contracts.

This is not a moment to be reactive. Yet many hospitality businesses still approach HR that way, seeking support only when issues escalate into absences, grievances, or tribunal claims. In an industry where margins are tight and staff retention is a constant challenge, that approach is a risk businesses can no longer afford.

Moving Away from Reactive HR

When HR is managed reactively, problems are addressed only once they have reached a critical stage. This leads to inconsistent decision-making, increased legal risk, low engagement, and manager stress.

• The financial impact of a single poorly handled grievance or unfair dismissal claim can far outweigh the cost of getting things right from the start.
• Add potential enforcement action from the Fair Work Agency and the stakes are even higher.

Building Strong Foundations

Proactive HR ensures that clear policies, procedures, and people practices are in place before problems arise. Managers are supported to act early, communicate clearly, and handle issues fairly and consistently. This builds a workplace culture grounded in trust, accountability, and genuine engagement - the key drivers of performance and retention in hospitality. Employees who feel supported and treated fairly are more likely to stay, perform well, and deliver excellent customer experiences.

Supporting and Developing Managers

Many hospitality managers rise through operational experience rather than formal people management training. That is simply the reality of the sector. Proactive HR bridges this gap, giving managers the confidence to handle absence, performance, and conduct issues early, before they become expensive problems. With the right support in place, managers spend less time firefighting and more time leading.

How Impact Lawyers Can Help

This is where Impact Lawyers, working alongside one of our Senior HR Consultants, adds real value. Our consultants have a proven track record in hospitality environments, supporting businesses to build strong people practices, stay legally compliant as the law evolves, and move confidently from reactive to proactive HR.

Proactive HR is not an added cost. It is a strategic investment. With the right partner, you can move forward with confidence, clarity, and control.