Business bosses have reacted with outrage to Labour's landmark employment reforms.
Bosses say the biggest shake-up to workers' rights in a generation, which ministers reveal today, will be “bad for jobs” and “bring fear” into the workplace.
The new law will give nine million workers the right to make a claim for unfair dismissal from their first day on the job.
Where possible, flexible working, including working from home, will also become the “default solution for everyone”.
Labor says its reforms will ensure “economic prosperity” under Sir Keir Starmer's growth agenda.
Labor MPs and trade unions welcomed the reforms, with Ms Rayner saying the Government “needs time for the Tories' scorched earth approach to industrial relations”. Pictured: Deputy Prime Minister and Secretary for Equalities, Housing and Communities, Angela Rayner
Where possible, flexible working, including working from home, will also become the 'default option for everyone' (stock)
New law will give nine million workers the right to make unfair dismissal claims from their first day of work (provisions)
However, there are concerns that the bill could tie up small businesses in red tape, causing a “hiring freeze” by bosses.
Martin McTague, national chairman of the Federation of Small Businesses (FSB), warned last night: “For all his good intentions, this (Bill) will strike fear into the employment relationship. This is very upsetting to most small businesses.”
Tina McKenzie, the FSB's policy chair, described the new regulations as “rushed, clumsy, chaotic and poorly planned work.”
She added: “Apart from the warm words, it lacks any real pro-growth element and will result in a lack of economic activity, seriously jeopardizing the government's 80% employment target.”
Referring to the right to claim unfair dismissal from the first day of work, Ms McKenzie said the reform would “increase the risks associated with employing staff”.
You will be entitled to bereavement leave, paternity leave and parental leave from your first day of employment – although it will not be paid
Under the new laws, you can apply for sickness benefit from the first day of illness, and not from the fourth (backup)
She added: “This increased risk will inevitably discourage small employers from taking on new staff for fear of an employment tribunal just because the new employee proves unsuitable for the job. This is harmful to jobs and is a barrier to economic growth.
The Employment Rights Act, which includes 28 solutions, will also ban zero-hour contracts and introduce a nine-month trial period.
Many of the proposals will be subject to consultation, with some significant changes not expected until autumn 2026.
However, some proposals submitted during the election campaign, including the so-called Angela Rayner's “right to opt out” was not included in the bill at all.
Advertising tycoon Sir Martin Sorrell has previously described the Deputy Prime Minister's flagship plan for reforming workers' rights as Labour's “Achilles heel”.
Last night he said: “(The latest proposals) will threaten and discourage manufacturing expansion and new investment in the UK and encourage investors to look elsewhere.”
However, Labor MPs and trade unions welcomed the reforms, with Ms Rayner saying the Government “needs time for the Tories' scorched earth approach to industrial relations”.
Christina McAnea, general secretary of Unison, which represents public sector workers, said: “Rights from day one, job flexibility, an end to exploitative working practices and measures to ensure trade unions can be a force for good are what millions of people desperately need . This bill will change workers' lives for the better.”
Kate Nicholls, chief executive of UKHospitality, said she was “pleased” that Labor recognized the “importance of flexibility”. However, she cautioned the government to “take its time (to) avoid unintended consequences.”
