You already know April 2026 has been brutal for costs. The NMW rise, the SSP changes, the full cost cliff hitting from every direction. But behind all of those individual changes sits something bigger - the Employment Rights Act 2025.

It received Royal Assent last year. It is the most significant reform of UK employment law in a generation. And it is not a single change landing on one date. It is a rolling programme of reforms being phased in across 2025, 2026, and 2027, each one changing how you hire, schedule, and manage your team.

Some of it is already in force. Some is coming in the next few months. Here is what you need to know - and what to do about it right now.

What the Employment Rights Act 2025 actually is

The Act is a sweeping overhaul of workers' rights. It covers everything from day-one protections against unfair dismissal to zero-hours contract reforms, shift scheduling rules, and new harassment obligations.

For hospitality, it touches almost every part of how you run your team. Hiring, probation, rotas, contracts, and even how you handle difficult customers all fall within scope.

The government is phasing provisions in gradually, which is sensible, but it also means you cannot just prepare once. You need to stay on top of what is coming and when.

What is already in effect

The Tipping Act (October 2024)

The first piece of the puzzle landed back in October 2024. The Employment (Allocation of Tips) Act requires you to pass on all tips, gratuities, and service charges to staff in full. You must have a written tipping policy, and you must distribute tips fairly and transparently.

If you are running a café or restaurant and have not already updated your tipping policy and processes, you are behind. This one is already enforceable, and staff can take you to tribunal if tips are not being allocated fairly.

Day-one unfair dismissal rights

This is the change that will affect how every café owner hires. Currently, employees need two years of continuous service before they can claim unfair dismissal. Under the new rules coming into force in 2026, that protection starts from day one.

What this actually means

It does not mean you cannot dismiss someone. It means you need a fair reason from the start - not just during the first two years. The Act introduces a statutory probation period of nine months, during which a lighter-touch dismissal process applies. But "lighter-touch" still means documented and fair. You cannot just let someone go because it is not working out without any process at all.

How to use the nine-month probation period properly

Think of it this way. You hire a new barista. Within the first nine months, if they are not meeting standards, you can dismiss them with a simpler process than a full disciplinary. But you still need to:

Set clear expectations from the start. What does good look like? Put it in writing during onboarding.
Give feedback early and often. Do not wait until month eight to mention they have been making flat whites wrong since week two.
Document the conversation. A quick email summarising a chat is enough. "We discussed X, agreed you'd work on Y, and we'll review in two weeks."
Follow a reasonable process. Even a short meeting where you explain the issue and give a chance to respond counts.

The nine-month window is generous. Use it well, and it protects you. Ignore it, and a dismissed employee could still bring a claim from day one.

What to do now

Review your onboarding process. If you do not have written probation objectives, create them. If you do not document feedback conversations, start. StaffBrik tracks probation periods and prompts review dates automatically - so nothing slips through when you are busy running the floor.

Zero-hours contract reforms

This is the big one for hospitality. Zero-hours and low-hours contracts are the backbone of how many cafés and restaurants staff up. The reforms being phased in across 2026 and 2027 will change the deal fundamentally.

Right to guaranteed hours

After a qualifying period (expected to be 12 weeks), workers on zero-hours or low-hours contracts will have the right to be offered a contract reflecting the hours they have actually been working. If someone has been doing 20 hours a week every week for three months, you will need to offer them a contract that reflects that.

This does not mean you cannot use variable-hours contracts at all. It means the days of keeping someone permanently on zero hours while scheduling them for regular shifts every week are coming to an end.

What this means in practice

If you have a team member who works every Saturday and Sunday brunch service - let's say 14 hours a week, reliably, for months - they will be entitled to a guaranteed-hours offer reflecting that pattern.

You can still have genuine casual workers who pick up shifts occasionally. The reform targets the practice of using zero-hours contracts as a permanent staffing model while avoiding employment obligations.

How to prepare

Audit your current team. For each person on a zero-hours or casual contract, look at their actual working pattern over the last three to six months. If any of them are working regular, predictable hours, start planning now for what their guaranteed-hours contract would look like. Building a rota that properly accounts for labour costs becomes essential when guaranteed hours mean guaranteed wage commitments.

Shift notice and cancellation compensation

This reform will change how you plan and manage rotas. The Act introduces:

Reasonable notice of shifts. You will need to give workers reasonable advance notice of their shifts and any changes to them.
Compensation for short-notice cancellations. If you cancel or curtail a shift at short notice, you will need to compensate the worker.

The exact notice periods and compensation rates are still being finalised through secondary legislation expected later in 2026 and into 2027. But the direction is clear - last-minute rota changes will have a direct cost.

Why this matters for cafés

Hospitality lives and dies by flexibility. A quiet Tuesday means sending someone home early. A sudden rush means calling someone in. Rain means fewer covers at your outdoor tables. These are daily realities.

The new rules will not eliminate flexibility entirely, but they will put a price on it. If you regularly cancel shifts within 24 or 48 hours, you will need to factor compensation costs into your planning.

What to do now

Start building rotas further in advance. Track how often you cancel or curtail shifts - this data will help you understand your exposure when the rules take effect. Use our new hire calculator to model the true cost of each team member, including the impact of guaranteed hours and potential cancellation costs.

Fire-and-rehire restrictions

The Act places significant new restrictions on "fire and rehire" - the practice of dismissing an employee and immediately rehiring them on less favourable terms. This was already controversial, and the new rules make it automatically unfair dismissal in most cases.

For small café operators, this might feel irrelevant. But consider this: if you have ever restructured someone's role - changed their hours, adjusted their duties, moved them from one site to another - and the conversation did not go smoothly, you were in fire-and-rehire territory.

The new rules mean you need a genuine consultation process before making changes to employment terms. You cannot simply impose new terms and tell someone to take it or leave it.

Third-party harassment

Here is one that is directly relevant to every café and restaurant with a front-of-house team. The Act introduces employer liability for third-party harassment. That means harassment of your staff by customers, delivery drivers, suppliers, or anyone else who is not an employee.

What this looks like in hospitality

Your barista gets racially abused by a customer. A delivery driver makes repeated unwanted comments to your server. A regular customer makes your team member uncomfortable with persistent personal remarks.

Under the new provisions, you have a duty to take reasonable steps to prevent this. If you knew or should have known it was happening and did nothing, you could be liable.

Reasonable steps

You do not need to station a bouncer at the door. Reasonable steps include:

A clear policy that your team knows about - staff should know they can refuse service and that you will back them up
Training so managers and team leads know how to handle incidents
A reporting process so staff can flag issues without fear of being told to just deal with it
Visible action - if a customer is warned and continues, they are banned. Full stop.

This is good practice regardless of the law. But the Act gives it legal teeth.

Your preparation checklist

The Employment Rights Act 2025 is not coming. It is here. Parts are already in force, and the rest is rolling out across the next 12 to 18 months. Here is what to do now.

Contracts and policies

Review all employment contracts. Do they reflect current working patterns?
Update your tipping policy if you have not already
Draft a third-party harassment policy
Ensure probation terms are clearly stated in contracts

Hiring and onboarding

Create written probation objectives for each role
Set up a system for documenting feedback conversations during probation
Plan review checkpoints at 3, 6, and 9 months

Rotas and scheduling

Audit zero-hours workers against their actual hours over the last 3 to 6 months
Start building rotas further in advance to reduce last-minute cancellations
Track shift cancellation frequency - you will need this data

Team culture

Brief your team on the third-party harassment policy
Make sure managers know how to handle and escalate incidents
Create a simple reporting process for harassment or difficult customer situations

The bigger picture

The Employment Rights Act 2025 is landing at the same time as NMW increases, SSP reform, employer NI changes, and rising business rates. Each one is manageable on its own. Together, they represent a fundamental shift in the cost and complexity of employing people in UK hospitality.

The operators who will manage this best are the ones who are not scrambling to react to each change as it arrives, but who have systems and processes in place that make compliance the default. Good records, clear contracts, fair rotas, documented feedback - these are not bureaucratic overhead. They are the foundation of a well-run operation.

And honestly? Most of what the Act requires is just good management practice with legal backing. If you are already treating your team fairly, documenting decisions, and planning rotas properly, you are closer to compliance than you think.

The ones who will struggle are the ones still running everything off the back of a napkin.

Ed O'Brien has run Hunters Cake Company for 17 years across cafés in Witney, Burford, and a bakery in Carterton, Oxfordshire. He's building Brikly - modular tools that give independent café owners the same data the big chains have, without the big chain price tag.