Employment Rights Bill could drive further increase in claims
New research from law firm Birketts has revealed that employers in the hospitality and leisure (HAL) sector are facing a growing number of employment tribunal claims, driven by high staff turnover, casual working arrangements, and challenges in managing grievances effectively.
The report, The Birketts View: Employment Tribunals in the Hospitality and Leisure Sector Impact Report 2025, surveyed HR professionals across England and Wales and found that HAL businesses had received an average of 44.53 tribunal claims over the past two years – 12%higher than the average across all sectors.
The most common claims brought against HAL businesses were harassment related to a protected characteristic (15%), with significantly fewer claims for ordinary and constructive unfair dismissal due to the prevalence of short-term contracts and seasonal work.
Birketts warns that the Employment Rights Bill, which introduces ‘day one’ rights to claim unfair dismissal, could lead to a surge in claims from employees who previously lacked the required length of service.
Grievances and disciplinaries: a growing concern
While HAL businesses reported fewer grievances overall (27.62 on average), a higher proportion of grievances led to tribunal claims – suggesting that internal processes may be failing to resolve issues effectively. Discrimination was the most common grievance type (24.2%), followed by concerns around pay, workload, and relationships with managers.
On average, HAL businesses dealt with 28.9 disciplinary matters in the past 24 months, below the cross-sector average of 36.5. However, the most common disciplinary issue leading to dismissal was also discrimination (17%).
Settlements and HR impact
The report found that over 70% of claims in the HAL sector were settled before reaching a final hearing – higher than the average across all sectors. However, Acas Early Conciliation was used in only 10% of cases, suggesting missed opportunities for early resolution.
The most common reasons for settling claims included management time (28%), poor merits, and reputational risk. HAL HR teams spent an average of 4.32 working weeks dealing with tribunal claims over the two-year period.
Expert commentary
Commenting on the findings, Catherine Johnson, Partner in Birketts’ Employment Team, said:
“The hospitality and leisure sector is particularly vulnerable to employment claims due to its reliance on casual and seasonal staff. 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: “AI tools make it easier and faster for employees to draft detailed complaints about workplace issues. As a result, employers appear to be increasingly faced with grievances that are longer, more complex, and sometimes contain significant inaccuracies, particularly in the interpretation of legal principles and even in the factual details. It is important to put an AI policy in place to proactively manage this.”
Recommendations for HAL employers
Birketts advises HAL businesses to:
- Implement clear workplace policies and maintain open communication.
- Provide training for managers on proactively managing grievances, discrimination, and harassment.
- Consider early and robust tactics when claims are brought.
- Prepare for the new legal duties under the Employment Rights Bill, including the requirement to prevent harassment by third parties.
The full report can be found in the The Birketts View: Employment Tribunals in the Hospitality and Leisure Sector Impact Report 2025.
