Hospitality sector faces rising tribunal claims

The hospitality and leisure (HAL) sector is grappling with an increase in employment tribunal claims, driven by a combination of high staff turnover, casual working arrangements, and difficulties in managing employee grievances. According to a recent report from law firm Birketts, titled The Birketts View: Employment Tribunals in the Hospitality and Leisure Sector Impact Report 2025, employers in this sector have seen a staggering average of 44.53 tribunal claims over the past two years. This figure is 12% higher than the average across all sectors, highlighting a troubling trend.

The report indicates that harassment related to a protected characteristic was the most prevalent type of claim against HAL businesses, making up 15% of the total claims. In contrast, claims for ordinary and constructive unfair dismissal were significantly fewer, an outcome attributed to the high prevalence of short-term contracts and seasonal work within the industry.

As the Employment Rights Bill introduces ‘day one’ rights for employees to claim unfair dismissal, Birketts raises concerns that this could fuel an even greater increase in claims, particularly from employees who previously did not have the necessary length of service to bring forward such complaints. Catherine Johnson, Partner in Birketts’ Employment Team, stated “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.”

Despite HAL businesses reporting an average of 27.62 grievances, a worrying trend emerges: a higher proportion of these grievances are leading to tribunal claims, indicating potential shortcomings in how issues are resolved internally. Discrimination was identified as the most common grievance type (24.2%), followed by issues related to pay, workload, and relationships with managers. Furthermore, HAL employers handled an average of 28.9 disciplinary matters over the past two years, a figure that sits below the cross-sector average of 36.5, with discrimination being cited as the most common disciplinary issue leading to dismissal (17%).

Interestingly, the report reveals that over 70% of claims in the HAL sector are settled before they reach a final hearing, which is notably higher than the sector-wide average. Yet, the use of Acas Early Conciliation in only 10% of cases points to potential missed opportunities for resolution before escalating to tribunals. The primary motives for settling claims include management time constraints, poor merits of the claims, and reputational risks. HR teams within the HAL sector reportedly spent an average of 4.32 working weeks managing tribunal claims over the two-year investigation period.

To mitigate these challenges, Birketts recommends that HAL employers implement clear workplace policies and maintain open lines of communication. It also advises providing comprehensive training for managers on effectively handling grievances, discrimination, and harassment. Johnson added, “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.”

Additionally, Johnson urges employers to consider proactive strategies when faced with claims and to prepare for the new legal duties mandated by the Employment Rights Bill, which includes preventing harassment by third parties. This encompasses the need for organisations to adopt AI policies as employees leverage technology to draft increasingly complex complaints regarding workplace issues. As Johnson notes, “AI tools make it easier and faster for employees to draft detailed complaints about workplace issues,” and employers must be prepared for this evolving landscape.