Will the social care sector benefit from the Employment Rights Act?
The Employment Rights Act 2025 came into force on the 18th December 2025.[1] Through this legislation, the government has established the ‘Fair Pay Agreement’ and the ‘Make Work Pay’ initiative. Both government initiatives aim to improve pay and working conditions across the UK. This article explores the impact these plans have had so far on the social care sector.
The Employment Rights Act is part of the first phase of the government’s plan to ‘Make Work Pay’[2]. The ‘Make Work Pay’ initiative aims to ‘grow the economy, raise living standards across the country and create opportunities for all’[3]. This initiative includes employment law reforms which were implemented in late 2025 and will continue until 2028[4]. Through the ‘Make Work Pay’ initiative, the framework for ‘Fair Pay Agreements’ has been introduced; this aims to ensure ‘the care workforce can get long overdue boosts to their pay, terms and professional development.’
Minister of State for the Department of Health and Social Care Stephen Kinnock has released a statement[5] confirming that the Fair Pay Agreement ‘will introduce annual negotiations between employer and worker representatives to agree improvements to pay and conditions for the adult social care workforce for the first time’. The ‘Adult Social Care (ASC) Negotiating Body’ is to be established as part of the Fair Pay Agreement to ‘bring together trade unions and people representing employers to negotiate on pay, terms and conditions, and related matters’[6]. The ASC Negotiating Body is proposed to be set up as a non-departmental public body; operating independently from the government with strong governance and support structures[7].
The Department of Health and Social Care announced on the 30th September 2025 that it will provide £500m for councils to implement the changes for 2028-29. This amount of funding has brought mixed reviews from organisations, with some citing this is not enough to deliver the proposed changes to the social care sector. Analysis by the Health Foundation has suggested that the additional £500 million would only cover about 20p extra per hour if applied to the social care workforce for the years 2028/2029[8].
Dr Jane Townson OBE, Chief Executive of the Homecare Association, has stated
‘The funding announced today barely scratches the surface of the multi‑billion‑pound gap in homecare[9]’.
In an economic review by the government, eight measures in the Employment Rights Act 2025 will drive the act into force, these are[10]:
- Fair Pay Agreement in Adult Social Care (ASC).
- The right to a guaranteed hours contract.
- The right to payment for short-notice shift cancellation.
- Reducing the qualifying period for unfair dismissal to six months.
- Reforms to Statutory Sick Pay (SSP).
- The repeal of elements of the Trade Union (2016) Act.
- Strengthening the rules around ‘Fire and Rehire’ practices.
- The Fair Work Agency (FWA).
How will this affect social care?
The Fair Pay Agreement will include a ‘set of terms and conditions that all workers covered by the agreement are entitled to’[11]. As it stands now, the terms have not been decided, however, with the introduction of the ASC Negotiating Body, employees have the opportunity to negotiate these terms and conditions.
One change that the Employment Rights Act has brought into place is the increase for statutory sick pay (SSP)[12]. The government has said that ‘the rate of Statutory Sick Pay will be 80% of an employee’s earnings or the current flat rate whichever is lower’.[13]
Another change that the Employment Rights Act will bring is ‘reinstating the two-tier code to ensure outsourced private sector employees are offered no less favourable terms and conditions to employees transferred from the public sector’[14]. Employees who have been moved to the private sector will receive equal terms and conditions as those in the public sector; private companies cannot avoid this[15].
As the Employment Rights Act continues to be implemented into law, changes will continue to take place, with further changes to be introduced from October 2026[16]. We will continue to monitor these changes and the effect they will have on the social care sector.
[1] https://www.legislation.gov.uk/ukpga/2025/36
[2] https://www.gov.uk/government/consultations/fair-pay-agreement-process-in-adult-social-care/outcome/fair-pay-agreement-process-in-adult-social-care-government-response
[3] https://www.gov.uk/government/consultations/fair-pay-agreement-process-in-adult-social-care/fair-pay-agreement-process-in-adult-social-care-consultation-document
[4] https://www.makeuk.org/news-and-events/news/plan-make-work-pay-reaction-employment-law-changes-timetable
[5] https://www.theyworkforyou.com/wms/?id=2026-07-16.hcws281.h
[6] https://www.gov.uk/government/consultations/fair-pay-agreement-process-in-adult-social-care/fair-pay-agreement-process-in-adult-social-care-consultation-document#adult-social-care-negotiating-body
[7] https://www.gov.uk/government/consultations/fair-pay-agreement-process-in-adult-social-care/fair-pay-agreement-process-in-adult-social-care-consultation-document#adult-social-care-negotiating-body
[8] https://www.nuffieldtrust.org.uk/resource/good-intentions-aren-t-enough-implementing-a-fair-pay-agreement-that-works-for-social-care
[9] https://www.homecareassociation.org.uk/resource/fair-pay-must-mean-fair-funding-homecare-association-warns-government-social-care-pledge-falls-short.html
[10] https://assets.publishing.service.gov.uk/media/695d3ebfbd1c076f787e7399/employment-rights-act-2025-economic-analysis.pdf 87
[11] https://www.gov.uk/government/consultations/fair-pay-agreement-process-in-adult-social-care/fair-pay-agreement-process-in-adult-social-care-consultation-document#equalities-impact
[12] https://www.legislation.gov.uk/ukpga/2025/36
[13] https://assets.publishing.service.gov.uk/media/695fb36d47867b8e14f764fb/statutory-sick-pay-factsheet.pdf page 1
[14] https://www.gov.uk/government/publications/implementing-the-plan-to-make-work-pay-and-employment-rights-act/plan-to-make-work-pay-and-employment-rights-act-timeline-update
[15] https://www.acas.org.uk/employment-rights-act-2025
[16] https://www.gov.uk/government/publications/implementing-the-plan-to-make-work-pay-and-employment-rights-act/plan-to-make-work-pay-and-employment-rights-act-timeline-update
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