Introduction
Running a care home or social care service is demanding at the best of times. Staff management, compliance, and resident care all compete for your attention. Soon, there will be another important factor to add to the list: the Employment Rights Bill.
Expected to become law later in 2025, this Bill is being described as the biggest upgrade to employment rights in a generation. It will introduce new entitlements for employees and new responsibilities for employers. For care providers, where workforce stability is essential and costs are already tightly controlled, these reforms could bring significant change.
Although the Bill is still progressing through Parliament and may be amended, owners and managers should begin preparing now. In this blog, we’ll cover:
- What the Employment Rights Bill is and why it matters.
- Key timelines from 2025 through to 2027.
- The implications for care providers.
- Practical steps to start preparing.
- Useful resources and how LSW Care Solutions can support you.
What is the Employment Rights Bill?
The Bill forms part of the government’s wider Plan to Make Work Pay. The aim is to create a fairer, more secure employment landscape while supporting productivity and living standards.
For employers, this means updates to the familiar Employment Rights Act 1996 and several brand-new obligations. Among the most notable measures are:
- Zero-hours contracts: Ending exploitative practices by requiring guaranteed hours, reasonable notice of shifts, and pay if shifts are cancelled at short notice. Agency workers will also have equivalent rights.
- Fire and rehire: Dismissals for refusing contractual changes will be automatically unfair, except in very limited cases.
- Unfair dismissal: The two-year qualifying period will be removed. Employees will have the right to claim unfair dismissal from day one, balanced with a new statutory probation period.
- Statutory Sick Pay: The lower earnings limit and the waiting period will be scrapped, widening eligibility and access.
- Family-friendly rights: Paternity leave and unpaid parental leave available from day one, a new right to unpaid bereavement leave, parents able to take paternity leave after shared parental leave, and stronger protections against dismissal for pregnant women and mothers for six months after their return to work.
- Flexible working: Employers must explain refusals clearly, and refusals must be reasonable.
- Fair Pay Agreements: A process to set minimum pay and conditions in adult social care in England, Scotland, and Wales.
- Harassment protections: Stronger duties on employers to prevent sexual harassment, including from third parties.
- Enforcement: Creation of the Fair Work Agency, bringing together enforcement of minimum wage, agency regulation, and labour exploitation, with extended powers to investigate and take cases to tribunal.
Key Timelines for Change
The reforms will not come all at once. Some will begin in late 2025, while the bigger shifts take effect in 2026 and 2027.
Autumn 2025 (expected)
- The Bill passes into law (Royal Assent).
• Early measures around shift notice, cancellation pay, and agency worker protections may begin.
• Foundations laid for the Fair Work Agency.
• Consultations on secondary regulations and codes of practice.
Early 2026
- Day-one rights for unfair dismissal, paternity leave, unpaid parental leave, and statutory sick pay.
• Statutory Sick Pay reforms: no lower earnings limit and no waiting period.
• Flexible working strengthened: refusals must be reasonable and explained.
• New family rights: unpaid bereavement leave and extended protections for pregnant women and returning mothers.
2027 and beyond
- Fair Pay Agreements in adult social care: expected to be fully operational, with sector-wide impact on pay and conditions.
• Fair Work Agency fully up and running, with new enforcement powers and remit.
• Trade union reforms: easier recognition processes, broader access rights, and protection for union representatives.
Why This Matters for Social Care
The care sector is particularly exposed to these reforms. Here are some of the key reasons:
- Reliance on flexible working: Many providers use zero-hours contracts and agency workers to manage fluctuating demand. The Bill introduces guaranteed hours and cancellation payments, likely to increase costs and reduce flexibility.
- Budgetary pressures: Expanded sick pay and family leave will mean more staff are entitled to paid time off. For services already operating on slim margins, this could impact financial stability.
- Recruitment and retention: Fair Pay Agreements could standardise pay and conditions, reducing competition between providers but also limiting flexibility in setting terms. This may improve recruitment in the long term but requires careful financial planning.
- Compliance risks: With unfair dismissal becoming a day-one right, outdated contracts or policies could expose providers to tribunal claims.
- Cultural obligations: Stronger duties to prevent harassment, new protections for whistleblowers, and equality action plans mean providers must invest in building supportive, compliant workplaces.
These are not abstract changes. They will affect day-to-day operations, costs, and the way you manage staff.
Preparing for the Changes
Getting ready now will make the transition smoother. Here are five areas to prioritise:
- Review contracts and working arrangements: Audit how many staff are on zero-hours contracts. Consider whether guaranteed hours should be offered. Put systems in place for giving reasonable notice of shifts and paying staff if shifts are cancelled at short notice. Review agency worker arrangements for compliance with the new rules.
- Strengthen HR policies: Update disciplinary and grievance policies to reflect day-one unfair dismissal rights. Introduce clear probationary clauses in contracts to help manage new staff fairly. Review sickness absence policies in line with enhanced Statutory Sick Pay.
- Plan for family-friendly rights: Update policies on parental leave, paternity leave, and bereavement leave. Train managers on the new flexible working rules so they can respond lawfully and consistently. Ensure record-keeping systems are robust in case decisions are challenged.
- Prepare for collective changes: Familiarise yourself with new redundancy consultation requirements. Start modelling the potential impact of Fair Pay Agreements on staffing budgets. This could be one of the most significant financial changes for care providers.
- Build a culture of compliance and support: Train managers to prevent and address harassment, and make sure whistleblowing policies are up to date. Develop action plans around gender pay gap reporting and menopause support, as required. Foster open communication with staff to maintain trust during times of change.
How LSW Care Solutions Can Help
Adapting to these reforms may feel overwhelming, particularly when you are already managing the daily demands of running a care service. That is where LSW Care Solutions can help.
Our team has extensive experience in HR, governance, and compliance across the care sector. We can support you by:
- Reviewing your contracts, policies, and procedures to ensure compliance.
- Carrying out workforce audits and financial modelling for the impact of Fair Pay Agreements.
- Providing tailored HR advice on dismissals, grievances, and disciplinary processes.
- Helping design induction and onboarding programmes that reflect the new rights.
- Working with your leadership team to embed a compliance-first culture that supports both staff and residents.
To make preparation even easier, we’ve created a Care Provider Readiness Checklist for the Employment Rights Bill. This free tool helps you review everything from resident support agreements and rota planning through to contracts, policies, and workplace culture.
We’re here to make sure you’re not only compliant but confident as these changes roll out.
Complete the form below to download our checklist.
Conclusion
The Employment Rights Bill will transform employment law between 2025 and 2027. For care providers, the impact will be wide-ranging, from contracts and pay to workplace culture and compliance.
Although the Bill has not yet become law, taking action now will save time, money, and stress later. Updating your policies, reviewing your contracts, and preparing your managers will put your service in the best position to adapt.
At LSW Care Solutions, we are here to support you every step of the way. Whether you need a policy review, HR advice, or a full business compliance check, our expert team is ready to help.
Get in touch today to discuss how we can help your service prepare for the Employment Rights Bill and stay compliant as the new rules come into force.
Support Resources
There are already a number of resources to help you track and prepare for these changes:
It is also advisable to follow sector bodies such as Care England and Skills for Care, who are expected to publish further guidance for care providers.