Libby Hubbard, a Professional Support Lawyer at Anthony Collins, outlines the key changes introduced by the Employment Rights Act 2025 and what social care providers must do now to prepare for its impact on sick pay, pay negotiations, and zero‑hour contracts.
The Employment Rights Act 2025, which came into law on 18th December 2025, was introduced with a promise of “generational change” to redress the balance between employer and employee — a commitment made by the newly elected Labour Government when the Act was published in October 2024. It is a worthy aim, but one that will require more than a swiftly drafted piece of legislation. Providers now face the challenge of embedding new practices and strategies ahead of the reforms coming into force over the next two years.
This article examines three of the most significant changes for social care: statutory sick pay, (SSP) reform, the creation of an Adult Social Care Negotiating Body, and the measures affecting zero‑hour contracts.
From April 2026, eligible workers will be entitled to SSP from day one of their sickness; the three waiting days will be removed. In addition, workers who earn below the lower earnings limit will be entitled to payment during sickness absence (80% of their recent earnings). No provider wants a potentially contagious worker coming to work when they are ill because they cannot afford to lose three days’ pay. However, there remains the risk that some workers may exploit this new provision to take paid time off when they are not sick.
In the short term, we are advising clients to ensure sickness reporting provisions are robust but fair. There needs to be a trust relationship between employer and worker, alongside clear expectations around reporting sickness correctly, holding back‑to‑work meetings, and monitoring absence trends.
The long‑term issue for providers is one of cost: the increased cost of the SSP bill and the cost of covering such absences. Providers should be factoring these costs into new contracts going forward. Failure to do so will impact their financial bottom line at a time when margins are already tight.
The second change to note is the Government’s intention to introduce a sector‑wide pay agreement. The Employment Rights Act 2025, ushers in the formation of an Adult Social Care Negotiating Body to thrash out this agreement. Providers have for too long been aware of the disparities between pay rates in social care when compared with similar roles in the health sector. The providers we speak to want to ensure their staff are well paid for the long hours they work and the tough roles they carry out. However, those same providers voice concerns that without meaningful financial support from the Government, such parity is impossible.
The Government has recently closed its initial consultation on the composition and workings of the negotiating body; however, we would advise all providers to get involved with this process — whether through an umbrella body, representative organisations, or by contributing to further consultations. A pay agreement that has any chance of working must have the input and expertise of those in the sector behind it.
The final change is the Government’s measures to “outlaw” zero‑hour contracts. For this sector, the intention to introduce a highly complex regime of Guaranteed Hours Offers to zero‑hour workers who work regularly over a reference period is problematic. We are advising clients to audit current working practices and assess whether any reliance on zero‑hour contracts can be reduced to mitigate the impact of these changes.
These measures are not due until 2027, and we still await details of the regime; however, providers who can minimise their use of zero‑hour contracts now will reduce the risk of further surprises and additional measures over the next 18 months.
Libby Hubbard, Professional Support Lawyer, Anthony Collins