Rena Magdani, National Head of Employment at law firm Freeths, outlines key 2025 employment law changes for care providers, drawing on insights from the firm’s latest survey into this year’s HR priorities and challenges.
The top priority for businesses, according to our survey, is adapting to the new Employment Rights Bill. The biggest cause for concern is the introduction of day one unfair dismissal rights. The government is considering an initial employment period during which this right will not have full effect. The majority of respondents to our survey favour an initial period of six months or more—but we’ll have to wait and see what the government ultimately decides.
Businesses expect day one unfair dismissal rights to place greater emphasis on the quality of recruitment. Nearly half of respondents plan to give recruitment teams additional training; 46% expect to change their recruitment procedures, and more than one in 10 businesses plan to increase their use of agency workers.
However, the government announced in March that agency workers will now receive the same protections as directly engaged zero-hours or low-hours workers. This means any employers hoping to use agency workers to circumvent new restrictions on zero-hour contracts will find that loophole closed.
Care businesses may be particularly impacted by the proposed reforms to zero-hours contracts, given that around a quarter of the care workforce were on zero-hours contracts in 2023/24, according to a UK Parliament research briefing. Under the reforms, employers will be required to offer staff a contract with guaranteed hours, based on the hours worked during an initial reference period—likely to be 12 weeks. If workers exceed a certain number of hours during this time, employers must offer a contract reflecting those hours. Additionally, employers must give staff more notice of their shifts and compensate them for last-minute cancellations.
Another major concern arising from the bill is the entitlement to statutory sick pay (SSP) from day one. Previously, SSP kicked in after three waiting days. This requirement was removed in the original version of the bill introduced in October, and in March, the government extended SSP to include low earners.
Currently, workers must earn on average £123 a week to qualify for SSP. From 2026, low earners will be entitled to either the flat rate of SSP or 80% of their normal weekly earnings, whichever is lower. Businesses will need to cost-model not just for the removal of the waiting days but also for the new obligations to lower-paid employees.
The bill will also increase employers’ duties regarding sexual harassment. Employers will now be expected to take all reasonable steps—not just reasonable steps—to prevent harassment and will also be liable for harassment by third parties. Our survey revealed that
many businesses have not yet implemented adequate training to meet these new responsibilities.
We strongly recommend that employers who don’t already have anti-harassment training in place take action. Many are opting for a mix of in-person and online training, including e-learning courses developed by Freeths, to ensure staff are well-informed and prepared.