Published: 5 June 2025
By: Ellie Fletcher, Citation
The new Employment Rights Bill (ERB) is shaping up to bring in the most dramatic overhaul of employment law we’ve seen in nearly 30 years. Since its announcement in October 2024, many changes have already been set in motion as it makes its way through parliament (currently in the House of Lords as of May 2025).
The changes
For the care industry, several changes present potential issues. In this article, Citation’s Director of Employment Law, Gill McAteer, details five of the most important changes, so you can be better prepared for when they become law.
The Bill is expected to pass in July before the summer recess, with most changes coming into force from April 2026 onwards – although some are anticipated to be enforced from October 2025. With 30 significant reforms coming your way, now is the time to start preparing your business.
Unfair dismissal protection from day one
What’s changing:
Employees will be able to bring a claim for unfair dismissal from day one of their employment, replacing the current two-year qualifying period.
Why it matters:
Most small and medium sized enterprises (SMEs) are used to a two-year buffer where they can end employment with minimal risk. When the Employment Rights Bill brings this to an end, it’ll mean that every dismissal will have to be handled with a great deal of care – even for brand-new hires still in their probation period.
Also, tribunal risks will be much higher, and employers may face legal action if dismissals aren’t managed properly. Poor documentation will mean poor defence – without evidence of a fair reason and fair process, employers will be vulnerable to losing a claim. And, even if you win a tribunal case, it can still be a very stressful process, costing you thousands in legal fees, and disrupting operations.
Make sure you’ve got a solid plan to adapt to the new changes and familiarise yourself on what exactly the law will require of you.
Statutory Sick Pay (SSP) available from day one of sickness absence
What’s changing:
The new Bill is introducing two big changes to SSP:
- SSP will be paid from day one of sickness absence (currently it starts on day four).
- All employees will be eligible, regardless of how much they earn (currently, they need to be earning at least £125 per week).
Why it matters:
These changes will mean employers face increased costs, as you’ll have to pay for short-term absences that weren’t previously covered. This is estimated to cost UK employers over £1 billion.
There’s also a greater risk of abuse of the system. Without proper absence management policies consistently put into practice, employers may see an increase in short-term sickness absence levels, which can put pressure on already stretched teams. Unplanned absences throw schedules into chaos – so it’s vital that you’ve got a system in place to not only cover the costs but also minimise the impact of short notices on your business.
Changes to zero-hours contracts
What’s changing:
The ERB is introducing three key rights for workers on zero-hours contracts:
- Right to guaranteed hours: Those who work regular hours over a period of time (expected to be 12 weeks) must be offered a contract based on those hours.
- Right to reasonable notice of shifts: Employers must give reasonable notice of shifts.
- Right to reasonable notice of changes: Employers must give reasonable notice to any change of shifts, including outright cancellations, shortening of hours, and moving a shift to a different day. If workers don’t get enough notice, they have a right to compensation.
Why it matters:
These changes will mean less flexibility, especially if you currently rely on workers on zero-hours contracts. What’s more, the new changes are extremely complex, and you’ll need to understand exactly what’s required, and whether any exceptions apply.
If these new rules aren’t followed correctly, it could open you up to tribunal claims and additional costs. It’s important to get a head start on who is currently on zero-hours contracts at your workplace and see how that contract can be changed ahead of time to make the transition easier.
New rules on harassment
What’s changing:
Under the ERB, employers will be legally required to take all reasonable steps to prevent any type of harassment of their workers by third parties, building on the sexual harassment protections introduced by the Worker Protection Act in October 2025.
Why it matters:
This change will make you potentially liable not just for your employees’ behaviour, but also harassment by third parties such as service users, suppliers, and contractors. If it’s found that you haven’t taken all reasonable steps to prevent harassment, you could face penalties as a result.
Make sure that your business meets the new rules for preventing harassment, so that, if an employee makes a complaint, you know that you’ve taken all reasonable steps to prevent it from happening.
Creation of the Fair Work Agency (FWA)
What’s changing:
The government is creating a new Fair Work Agency (FWA) – a powerful enforcement body that will replace several existing regulators and bring enforcement of many employment rights under one roof. The new body will take over enforcement in existing areas such as SSP and National Minimum Wage, but also new areas such as holiday pay.
Why it matters:
The FWA will have stronger enforcement powers and a wider remit, designed to crack down on non-compliance by employers. They’ll be able to inspect workplaces, request documents and require evidence of compliance. What’s more, these inspections can be carried out proactively, without the need of an existing complaint to trigger action.
The FWA will have the power to:
- Issue Notices of Underpayment (payable within 28 days)
- Impose penalties of up to 200% of the amount underpaid
- Introduce new rules to impose charges to recover the costs of enforcement where employers are found to be in breach of their obligations
- Bring tribunal proceedings on behalf of workers
- Provide legal advice and assistance to workers in tribunal claims
When you’re unsure, Citation’s here to help
In an environment as stressful and overworked as the care sector, don’t struggle alone. If you need advice or support, we’re here to help.
For more information, you can read our comprehensive guide on the ERB, which you can find here.
As partners of care bodies like Care England, Scottish Care and several regional care associations, we really do understand the unique challenges faced by care businesses. So, if you’re looking for quality HR or Health & Safety support, call 0345 844 1111 or visit our website to have a chat with our friendly team of experts.
