The Employment Rights Bill introduces sweeping reforms set to come into force by way of scheduled waves of changes during the next two years – 2026 and 2027.These changes will reshape employment standards across the UK with particular impact on adult social care.
Given the impact on the social care sector, there are key reforms of which you should be aware that will help keep you compliant. Now is the time to start putting steps in place that will put you ahead of the curve before employment law changes significantly. Making changes now gives you the opportunity to turn new legal obligations into strategic advantages, including for retention and engagement.
Unfair Dismissal Protection
The government has recently changed its plans for unfair dismissal rights reform. Instead of giving employees protection from day one, the latest proposal sets a six-month qualifying period. At present, employees usually need two years’ service before they gain protection against unfair dismissal. This is a big shift from the current two-year rule, making it much easier for employees to bring unfair dismissal claims.
Another major change is around compensation. At the moment payouts for unfair dismissal are capped at the lower of 52 weeks’ pay or a set statutory limit. If the new rules go through, that cap will be removed, meaning compensation could be much higher. The Bill also proposes locking in the six-month qualifying period so that any future changes would require full parliamentary legislation, making it harder to alter quickly. It this is accepted by the House of Lords, this will all increase the financial risk for employers if a dismissal ends up in dispute.
According to press reports, the reforms are expected to start on 1 January 2027. Final approval by the House of Lords is still pending. The government has sped things up by changing its plans for day one unfair dismissal rights. The qualifying period will simply reduce from 24 months to six.
In preparation for these changes, employers should:
- Recruit carefully by make sure roles are clearly defined and candidates are well-vetted.
- Use probation effectively, set clear expectations, review progress regularly, and keep good records.
- Act promptly on issues, don’t delay addressing concerns; early action reduces risk later.
Zero Hours Reform
While not banning zero-hour contracts, the Bill will introduce significant restrictions, aimed at curbing what the Labour Government has described as “exploitative” use. Employers will need to review zero and low-hour contracts, offer guaranteed hours where patterns require it under the new rules (likely to be after a repeated reference period of 12 weeks), and compensate staff for late shift changes and cancellations.
This will also apply to agency workers with the employer generally responsible for making the offer of guaranteed hours. Again, the changes are expected to take effect in 2027, and in preparation, employers should:
- Audit and review zero and low hour contracts, including for agency staff, to identify roles likely to trigger the guaranteed hours requirement.
- Aim to reduce reliance on zero-hours arrangements and prepare for predictable working pattern offer requirements.
- Consider negotiating updated collective agreements with recognised trade unions (if applicable) as this can allow more flexibility in the use of zero-hour contracts.
Sexual Harassment Duty
The Bill raises existing standards to ensure employers take more proactive steps to prevent sexual harassment, i.e. “all reasonable steps”. This legal duty will be extended to employers taking action to protect staff against third parties. For those in the social care sector, this will include preventing harassment from contractors, visitors and service users,
To prepare for the new standards, providers should update anti-harassment policies and provide training to cover third-party harassment, with clear guidance for staff interactions with each other and third parties. These changes are due to take effect from October 2026.
Flexible Working
The right to request flexible working from day one will be strengthened, with proposals to require any employer refusal of flexible working to be reasonable. Employers may still refuse requests based on one of the existing statutory grounds but must explain in writing their ground for refusal and why they consider the refusal reasonable.
While roles within care homes and adult social care services may limit flexibility in working arrangements, the expectation of staff for an employer to accommodate a flexible working request is increasing, especially in the context of recruitment and retention pressures. To balance operational needs with employee expectations employers should:
- Review flexible working policies to prepare for the shift to flexible working refusals to be explained in writing on the basis of being reasonable.
- Identify those roles where flexible working may be operationally challenging and be prepared to document the reasons why.
- Train managers to assess requests, fairly and consistently, and to explain refusals clearly with reference to statutory grounds.
Sick Pay Reform
Statutory sick pay will be another immediate right for employees rather than having to wait to qualify on the fourth day of sickness absence. The lower earnings limit will be removed, so sick pay will be paid to all eligible staff whatever their earnings, Those with wages below the lower earnings limit (currently £123 a week) do not currently qualify. Employers should be prepared to update both payroll systems and their absence policies. This reform is due to come into effect from April 2026.
Contracts and Employee Voice
The Bill introduces measures to enhance trade union access and strengthen employee voice. A new duty on employers to inform employees of their right to join a trade union will be in force, along with enhanced rights of unions to access workplaces.
Given these changes, advisable action points for employers are to:
- Prepare to issue to new starters a statement about their right to join a trade union when onboarding.
- Engage with unions where relevant and prepare for increased expectations around access and consultation.
- Engage staff without formal union recognition to strengthen employee voice mechanisms. This could include staff forums or representative bodies.
Equality and Menopause Action Plans
From April 2026, large employers (250+ staff) will be encouraged on a voluntary basis to publish details on enhanced pay transparency and menopause-related workplace support as part of an equality action plan. During 2027 this becomes mandatory.
For smaller care providers, they should prepare for a trickle-down effect in staff expectations and what will be considered good practice for employers.
Proactive steps employers can take in anticipation of new legal requirements include:
- Audit current pay data and consider if action should be taken to address a gender pay gap.
- Develop or review menopause support policies, provide guidance for managers, and access to occupational health.
- Prepare for the publication of workforce data and consider voluntary reporting even if below the threshold, especially where values or sector expectations align.
Fair Work Agency and Adult Social Care Negotiating Body
The Bill will create a Fair Work Agency designed to oversee compliance and enforcement standards including on minimum wage, holiday pay and statutory sick pay. Employers can expect to face increased scrutiny and reporting. This is expected to happen in April 2026.
The Bill also provides for the establishment of sectoral collective bargaining bodies. The Adult Social Care Fair Pay Body is identified as the first to be established, with implementation expected in October 2026. It will be an industry-wide body set to represent employers and trade unions to introduce legally binding, sector-wide minimum standards for pay and conditions in adult social care, affecting employer budgets, contracts, and workforce planning. Care home businesses should monitor developments including government guidance and implementation timelines.
This article reflects the current proposals and commentary surrounding the Employment Rights Bill as of 8 December 2025. Some provisions remain subject to consultation and final legislative approval. Employers should seek legal advice before making significant changes to policy or practice.
If you wish to discuss this further please get in contact with Laura McFadyen in our Employment team or call us on 0345 540 5558.