Employers in the hospitality and leisure sector are experiencing a higher volume of employment tribunal claims than the national average, with legal experts warning that proposed reforms could drive cases even higher.
New research from Birketts solicitors shows that businesses in the sector faced an average of 44.53 tribunal claims in the past two years, which is 12% above the average. The figures are drawn from The Birketts View: Employment Tribunals in the Hospitality and Leisure Sector Impact Report 2025, which surveyed HR professionals across England and Wales.
The most common type of claim was harassment linked to a protected characteristic, representing 15% of all cases. Ordinary and constructive unfair dismissal claims were less frequent, reflecting the prevalence of short-term and seasonal contracts in the sector.
Risk set to rise under Employment Rights Bill
The proposed Employment Rights Bill will introduce “day one” rights to claim unfair dismissal, removing the need for a qualifying period of service. Birketts warns this is likely to increase tribunal activity in hospitality and leisure, particularly around harassment and discrimination.
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“The hospitality and leisure sector is particularly vulnerable to employment claims due to its reliance on casual and seasonal staff,” said Catherine Johnson, Partner in Birketts’ Employment Team.
“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.”
She added that employers should strengthen internal processes, train line managers, and handle grievances effectively to avoid costly disputes. Johnson also noted that AI tools are making it easier for employees to draft lengthy and detailed complaints, which can contain legal and factual inaccuracies, urging organisations to develop AI policies to manage this emerging risk.
Grievances more likely to escalate
While hospitality and leisure employers reported fewer grievances overall – an average of 27.62 in the past two years – a higher proportion resulted in tribunal claims compared to other sectors. Discrimination was the leading grievance type (24.2%), followed by pay disputes, workload concerns and strained relationships with managers.
The sector also saw fewer disciplinary matters than the national average (28.9 compared to 36.5), but discrimination was again the most common reason for dismissal (17%).
Settlements more frequent than hearings
Over 70% of tribunal claims in hospitality and leisure were settled before reaching a final hearing, exceeding the cross-sector average. However, Acas Early Conciliation was used in only 10% of cases, suggesting employers may be missing opportunities to resolve disputes sooner.
The leading reasons for settlement included the time required to manage claims (28%), poor case prospects and reputational risk. On average, HR teams spent 4.32 working weeks dealing with tribunal matters over the two-year period.
Recommendations for employers
Birketts advises hospitality and leisure businesses to:
- Introduce clear workplace policies and maintain open channels of communication with staff.
- Provide targeted training for managers on managing grievances, discrimination, and harassment.
- Use early and decisive strategies when claims arise.
- Prepare for new legal requirements under the Employment Rights Bill, including measures to prevent harassment by third parties.
Of the 500 HR directors and managers surveyed, 100 were from the hospitality and leisure sector. Most respondents (467) worked in organisations with more than 1,000 employees, all based in England and Wales.
