The Embattled Care Sector Faces Another Perfect Storm

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The Employment Rights Bill is due to overhaul the rights of employees in this country. Although some of these changes will be consulted on and won’t be introduced for months or even years, major change is on the way.  This will require employers to get to grips with the risk of unfair dismissal claims from day one, rather than after two years, such that the business will need to put in place new policies and procedures around probationary periods.  The use of zero hours contracts for bank workers will become more complicated and the rights of trade unions will be expanded meaning care providers should expect to see a stronger trade union presence in their services and increased requests for formal recognition as the recognition process is simplified.

The right to request flexible working became a day one right in April 2024 and the Bill is set to make it more challenging to refuse a flexible working request.  Flexible working is something that is hard to manage in the sector but is a growing trend as the demand for a better work-life balance is increasing.  This will require operators and managers to look at how they can support their staff, potentially through shorter, or split-shifts.

Add to this another change for businesses to contend with, which is the requirement for employers to take reasonable steps to prevent sexual harassment of their staff by other employees and third parties, which came into effect on 26 October 2024.  This has always been a consideration for employers but this new law explicitly requires preventative steps and applies to third parties, including care home residents, service users and visitors and contractors to the service. Failure to take these steps can result in an increase in the worker’s compensation by up to 25%.  For anyone who has not already put in place risk assessments, policies and training to protect the business and its staff, get in touch for details of our compliance toolkit.

And then there are the spiralling costs.  The double-whammy of the Bill and the budget last month has meant that operating costs will increase significantly.  This removal of the three-day waiting time for Statutory Sick Pay will require sickness absence to be paid from day one.  The 6.7% increase in national living wage will hit from April 2025.  There is the potential for the introduction of a fair pay agreement in adult social care, and then of course the staggering increase in employers’ National Insurance contributions will come into effect in April too.  It goes without saying that providers recognise the benefit of these changes for their workforce but most will simply not be able to pass these on to their residents, whether privately or state funded.

So what next?  The coming months should be used to plan and budget.  Putting in place the foundations to deal with these changes is essential, whether that is reviewing contracts, discussing price increases, rolling out new policies and processes to ensure legal compliance or focussing on staff retention and alignment with company values to reduce turnover and agency spend.

The Ward Hadaway team have substantial experience working with operators in this sector, so do get in touch for us to hear your challenges, share our experiences and help you prioritise and plan.  Contact me on flora.mewies@wardhadaway.com or 0752 522 5480.