How a small restaurant group prepares for ERA 2025 changes from October 2026

The scenario

The Riverside Kitchen Group operates two independent restaurants in Bristol city centre. The business employs approximately 25 staff: 8 full-time kitchen staff, 12 part-time front-of-house workers, 3 supervisors, and 2 office staff (owner-manager and part-time bookkeeper). The restaurants have been trading for six years.

Like many city centre restaurants, they experience seasonal variation — summer months and the run-up to Christmas are busy, whilst January and February are quieter. Tips and service charges are distributed via a tronc scheme managed by a head server acting as troncmaster. Several front-of-house staff are on zero-hours contracts to accommodate the variable demand.

The business has had occasional issues with drunk or aggressive customers directing harassment at front-of-house staff, particularly on Friday and Saturday evenings. Until now, the response has been informal — managers intervening to eject problem customers and supporting affected staff — but nothing systematic.

Third-party harassment: the biggest operational change

For the Riverside Kitchen Group, the introduction of employer liability for third-party harassment represents the most significant operational change. The government's planned date for the new obligation is 30 October 2026, subject to parliamentary processes. From then, the business will be treated as permitting harassment of its staff by customers if it happens in the course of their employment and the business failed to take "all reasonable steps" to prevent it. The existing duty to prevent sexual harassment, in force since 26 October 2024, will also be strengthened from "reasonable steps" to "all reasonable steps".

The owner recognised immediately that their current approach — reactive intervention when incidents occur — would not meet the "all reasonable steps" test. Their HR consultancy advised that hospitality businesses face particular scrutiny because customer-facing roles inherently involve exposure to third-party behaviour.

Actions taken: The business implemented a comprehensive harassment prevention programme over a four-month period between June and September 2026. This included:

• Developing a written anti-harassment policy explicitly covering third-party harassment, distributed to all staff and discussed in team meetings
• Mandatory training for all staff (2 hours for front-of-house, 1 hour for kitchen staff) covering how to recognise harassment, how to report it, and the business's commitment to support them
• Manager training (half-day session) on responding to harassment incidents, de-escalation techniques, and when to eject customers
• Visible signage in both restaurants stating "We do not tolerate harassment of our staff" and making clear that harassment may result in customers being asked to leave
• A confidential reporting mechanism (dedicated email address and WhatsApp contact for the owner) so staff can report incidents without confronting customers directly
• An incident log to track patterns and identify repeat problems

Cost: The business spent approximately £2,800 on harassment prevention measures: £1,200 for external training delivery (provided by a hospitality HR consultancy), £800 in staff time for attending training (calculated at average hourly rates), £400 for signage and materials, and £400 for legal review of the policy.

Fire and rehire: restructuring risks

The fire and rehire protections, which the government has planned for January 2027, have implications for the Riverside Kitchen Group's approach to seasonal variation. In previous years, the business had occasionally restructured zero-hours contracts or reduced guaranteed hours for supervisors during quiet periods.

Once in force, dismissing an employee because they do not agree to a restricted variation to their contract (such as reduced hours or lower pay), or in order to re-engage them or someone else on such changed terms, will be automatically unfair dismissal. The only exception is where the employer shows the reason for the change was to eliminate, prevent, significantly reduce or mitigate financial difficulties affecting, or likely in the immediate future to affect, its ability to carry on the business as a going concern, and that it could not reasonably have avoided the change. Even then, the dismissal is not automatically fair. This is a very high bar.

Practical impact: The owner decided that the business could not realistically meet the going concern exception simply because January and February are quieter. Instead, they adopted a more flexible approach:

• For zero-hours staff, maintaining existing contractual terms but being transparent about expected hours during quieter periods when recruiting
• For supervisors, offering voluntary temporary reductions in guaranteed hours with written agreement (not dismissal and re-engagement)
• Building a contingency fund to cover payroll during quieter months rather than restructuring contracts

The business consulted an employment solicitor for £600 to review their approach and ensure they were not inadvertently triggering the fire and rehire provisions.

Tipping law: tronc scheme review

The Riverside Kitchen Group already operated a tronc scheme, distributing tips via a troncmaster (the head server). However, the strengthened tipping law, which the government plans to bring in by the end of 2026, adds requirements to the written tipping policy:

• Consultation requirements: Employers must consult workers (or their recognised trade union or elected representatives) before producing the first version of a tipping policy and as part of every review
• Regular review: Tipping policies must be reviewed at least once every three years
• Transparency: Employers must make an anonymised summary of the views expressed in each consultation available to all workers at the place of business

The business held a staff consultation in August 2026 to review the existing tronc scheme. The consultation confirmed broad support for the current 60/40 split between front-of-house and kitchen staff, but identified a desire for more transparency about the calculation method.

The owner updated the written tronc policy to include clearer explanations of the allocation formula, shared an anonymised summary of the consultation feedback, and committed to sharing monthly distribution reports with staff. The owner plans to repeat the consultation and review once the new requirements are in force, and at least every three years after that.

Cost: Minimal direct cost (internal staff time for consultation meetings), but the business engaged their accountant to review the tronc scheme for compliance (£350).

Longer tribunal time limits: risk management

The extension of employment tribunal time limits from 3 months to 6 months does not require the Riverside Kitchen Group to take specific action, but it does increase their exposure to potential claims. Previously, if an employee left and did not bring a claim within 3 months, the business could be reasonably confident the matter was closed. From 1 October 2026, where the matter complained of happens on or after that date, that window extends to 6 months.

The practical implication is that the business needs to maintain more careful records for longer periods and cannot assume disputes are resolved simply because 3 months have passed.

Actions taken: The business implemented a new record-keeping protocol: all disciplinary meetings, grievances, and exit interviews are documented in writing and retained for at least 12 months (double the new tribunal time limit). They also introduced a checklist for exit interviews to ensure potential issues are identified and, where possible, resolved before the employee leaves.

Trade union disclosure and access rights

The government plans to bring in the trade union measures on 30 October 2026, subject to parliamentary processes. Employers will have to give workers a written statement that they have the right to join a trade union, at the same time as their written statement of employment particulars, and trade unions will have a strengthened right of access to workplaces. For the Riverside Kitchen Group, this was a straightforward administrative change rather than a significant burden.

The business updated their written statement of employment particulars (issued to all new starters) to include explicit notification of the right to join a trade union. They also confirmed with their HR consultant how the access process will work: an independent trade union can send an access request asking to enter the workplace or communicate with workers; the employer can respond agreeing or disagreeing, in whole or in part; and if the two sides cannot agree terms, the Central Arbitration Committee can decide whether, and on what terms, access is given.

In practice, the owner does not expect many access requests. However, the owner views the disclosure requirement as good practice — transparency about workers' rights reduces the risk of disputes.

Steps taken to prepare

The Riverside Kitchen Group began preparing for the reforms due from October 2026 in June 2026, giving themselves four months to implement the most pressing changes. The preparation timeline looked like this:

June 2026: Initial legal review of the new requirements with an employment solicitor (half-day consultation, £600). The solicitor provided a prioritised action plan and template policies.

July 2026: Developed anti-harassment policy and organised training. Engaged a hospitality HR consultancy to deliver harassment prevention training. Updated written statements to include trade union disclosure.

August 2026: Delivered harassment prevention training to all staff over two weeks (scheduled during quieter service periods to minimise disruption). Held tronc scheme consultation and updated tronc policy. Reviewed fire and rehire risks with solicitor.

September 2026: Installed visible anti-harassment signage in both restaurants. Implemented new record-keeping protocols for tribunal time limit extension. Conducted final compliance check with HR consultant.

Total cost: Approximately £5,150 (legal advice £1,200, training £1,200, staff time £800, signage and materials £400, accountant review £350, HR consultant final review £1,200). The owner estimates this represented about 1.2% of annual turnover, but viewed it as essential risk management.

Time investment: The owner spent approximately 40 hours over four months managing the compliance project. Supervisors contributed an additional 20 hours combined for training delivery and staff consultation.

Lessons for similar businesses

Start early: The Riverside Kitchen Group gave themselves four months, which proved just enough time to implement everything without rushing. Businesses waiting until September would have struggled to complete training and policy development.

Third-party harassment is the big one: Of the changes due from October 2026, third-party harassment liability (planned for 30 October 2026) requires the most significant operational response for customer-facing businesses. Don't underestimate the time needed to develop policies, deliver training, and embed new practices.

Use sector-specific resources: Hospitality HR consultancies and training providers understand the specific risks restaurants face (drunk customers, weekend evening pressures, seasonal staff). Generic harassment training may not cover the scenarios your staff actually encounter.

Fire and rehire: rethink seasonal restructuring: If your business has historically used dismissal and re-engagement to manage seasonal variation, you need a new approach before the protections come in (planned for January 2027). The exception (financial difficulties affecting the ability to carry on the business as a going concern) is very narrow, and few seasonal businesses will meet it.

Document everything: With tribunal time limits extending to 6 months, you need robust records of disciplinary processes, grievances, and exit discussions. If a claim is brought 5 months after the event, you'll need contemporaneous evidence of what happened.

Budget realistically: The Riverside Kitchen Group spent just over £5,000 on compliance — about 1-2% of turnover for a small restaurant. This is not insignificant, but it's cheaper than defending a tribunal claim or suffering reputational damage from harassment incidents.

Northern Ireland

Employment law is devolved to the Northern Ireland Assembly. Most of the Employment Rights Act 2025 does not apply in Northern Ireland. If you operate a hospitality business in Northern Ireland, the harassment, fire and rehire, tipping and trade union changes described here do not apply to you, though separate legislation may be introduced in future. Some of the tribunal time limit changes also cover industrial tribunals in Northern Ireland (section 152).