Angela Rayner‘s workers’ rights revolution started to unravel today as ministers ditched plans to give people the right to claim unfair dismissal from day one.
Industry sources told the Mail that the government has performed a dramatic U-turn over the issue which has dogged relations with business for months.
Ministers have thrashed out a compromise behind the scenes that will see the TUC and Labour-supporting unions back the move.
However, it is likely to provoke a backlash from some Labour MPs and is a blow to former deputy prime minister Angela Rayner who had championed the plan.
The U-turn comes just days after Downing Street said it would resist all attempts to water down the plan.
Shadow business secretary Andrew Griffith said: ‘This humiliating U-turn on a Labour flagship bill is a Conservative victory and will give some relief to business. But this is just one element of this rushed 330-page, job-killing legislation. It doesn’t change the fact the Bill is still not fit-for-purpose, nor does it change the fact it will give Unions the ‘Right to Roam’, ban banter in pubs, or end flexible working.
‘Keir Starmer must grow a backbone, stand up to his union paymasters and ditch every single job-destroying anti-growth measure in the employment rights bill now.’
Ditching day one rights is blow to Angela Rayner who had championed a revolution in workers’ rights
CBI chief Rain Newton-Smith had urged ministers to climb down on the ‘damaging’ Employment Rights Bill
The move will be seen as a sign that Ms Rayner’s workers’ rights revolution is starting to unravel following her departure from government in September.
Ms Rayner had claimed the ‘basic rights’ would be ‘truly transformative’ for many workers.
A Whitehall sources said ministers recognised employer concerns about the impact on jobs.
The source said workers would not now get the right to claim unfair dismissal until they have been in the workplace for at least six months. The period is shorter than the current two years but is designed to ease fears among employers that they could become the target for vexatious claims from staff who have only just started.
Ministers have also agreed that the new six-month entitlement can only be reduced in future by primary legislation.
They are also desperate to end a standoff with the Lords over the measure which threatens to derail Labour’s flagship Employment Rights Bill.
A spokesman for the Department for Business and Trade said ministers had brokered talks between employers and unions in recent days to reach the compromise.
The spokesman said day one rights to sick pay and paternity leave would still be introduced in April next year. But the right to claim unfair dismissal from the first day of employment has been dropped.
The spokesman said: ‘Reforms to benefit millions of working people, including some of the lowest paid workers, would otherwise be significantly delayed if the Bill does not reach Royal Assent in line with our delivery timetable. Businesses too need time to prepare for what are a series of significant changes.’
Business leaders have savaged the Employment Rights Bill, which the government’s own assessment shows will cost firms £5 billion a year in extra red tape. But the right to claim unfair dismissal has been the biggest single bone of contention.
CBI chief rain Newton-Smith described the legislation this week as ‘disappointing and damaging’ and accused ministers of ignoring employers’ concerns.
‘Business is not just a resource to be taxed when the going gets tough. They are the ones creating jobs, building opportunities, lifting living standards and driving real change in communities,’ she said.
Business secretary Peter Kyle came under fire over the issue at this week’s CBI conference and hinted at a potential climb down.
But No 10 ruled out any concessions, saying the Prime Minister would resist all attempts to water down the Employment Rights Bill in the House of Lords.
The PM’s spokesman said: ‘The Employment Rights Bill is good for workers, good for businesses, and good for the economy.
‘We will overturn all attempts to scupper our plans, including watering down day one protection from unfair dismissal and limiting the ban on exploitative zero hours contracts.
‘The best British companies already have these protections, and we want to raise the standard that creates the right conditions for long term sustainable growth.
‘As we’ve said throughout, we’re committed to getting the detail right on these reforms. That’s why we’re asking businesses and workers to share their views as part of our consultation.’
Tory peer Lord Leigh, who helped lead opposition in the Lords, told the Daily Mail: ‘I am pleased that the government has finally listened to the points made in the House of Lords explaining that this bill would have caused enormous damage to British business. There was not one business representative body or even one business who was in favour of these proposals . However there are still some very unsatisfactory changes in particular giving enormous powers to the unions and these also need to be challenged.
