Is your care business prepared for the upcoming employment reforms?

The Government has announced new legislation that contains substantial reforms for adult social care providers. With an emphasis on improving worker protections and tackling inequality, these changes will reshape employment practices in the care sector.

Chris Amys of rwkgoodman provides a breakdown of the key provisions of the Employment Rights Bill and what they mean for care providers.

 
1. Fair Pay Agreement for care workers

One of the most significant provisions is the introduction of a Fair Pay Agreement. A central body, made up of unions and representatives, will set pay and conditions for social care staff. This is intended to address the ongoing issue of low pay and staff shortages. Unions are likely to push for a minimum rate of £15 per hour, but how would this be funded?

2. Changes to Statutory Sick Pay

It is proposed that statutory sick pay will be available from the first day of absence, rather than after four days, and that the lower earnings limit will be removed, both of which will further increase provider costs, especially when providers will already be struggling with increasing National Minimum Wage rates, National Insurance Contributions and insufficient funding increases.

3. Reforms to zero-hours contracts

Zero hours contracts (whether for employees or casual bank staff) will not be outlawed; however the draft legislation introduces the right to guaranteed minimum hours after 12 weeks of service, advance notice of shifts, and compensation if shifts are cancelled at the last minute. Many zero hours workers are happy with the arrangement and are therefore unlikely to accept an offer of guaranteed hours, so the impact for providers (particularly in residential care) may be low. However, the requirement for advance notice and compensation for cancellations could negatively impact the flexibility afforded by these arrangements.

4. Unfair dismissal from day one

The Employment Rights Bill makes provision for employees to claim unfair dismissal from their first day of employment, rather than after two years. A light-touch dismissal process is being proposed during the first 9 months of employment, which would have to be followed to avoid an unfair dismissal claim.

As these reforms increase legal risks when hiring and managing new employees, providers will need to review their recruitment and probationary practices and ensure managers have the necessary support and training to handle them effectively.

5. Stronger protection against harassment

The Government is proposing to raise the standard for preventing sexual harassment in the workplace, requiring providers to take “all” reasonable steps to prevent it. It is also proposed to extend liability to cover harassment by third parties, such as service users and visitors.

6. Increased rights for Trade Unions

The role of trade unions in the workplace is likely to be strengthened, including a requirement for providers to inform workers of their right to join a union, allowing unions greater access to the workplace, and lowering the thresholds for union recognition. This may lead to more unions seeking recognition within the care sector, so providers should begin developing strategies and understanding the role of a union in negotiating pay and conditions.

7. Tougher restrictions on ‘Fire and Re-Hire’

It will become harder for providers to fire employees and rehire them on less favourable terms. Providers will need to demonstrate that they have explored all alternatives before making changes to terms and conditions.

What’s next?

Although the legislation is still at consultation stage, most changes are set to come into force by 2026. This gives you time to prepare, but we recommend you start planning for the impact of these reforms now.