The debate over proposed reforms to workers’ rights has intensified, with Angela Rayner and Business Secretary Jonathan Reynolds embroiled in a contentious disagreement.
The central issue lies in the functioning of probation periods under the new system, which forms part of Labour’s broader agenda to overhaul workers’ rights within the first 100 days of their governance. Angela Rayner advocates for full employment rights, including the ability to bring unfair dismissal claims to employment tribunals, after a brief probation period. Currently, employees need to work for a minimum of two years to qualify for such protections. In contrast, Jonathan Reynolds argues for a longer probation period of up to nine months, deeming it a reasonable balance between employee rights and business needs.
A Whitehall source described the debate as “intense,” highlighting the uncertainty of reaching an agreement within the next fortnight. “Angela is less keen on a longer probation period, Reynolds thinks nine months is reasonable. It’s unclear if an agreement will be reached,” the source said.
The discussions are taking place amidst growing discontent among business leaders who argue that removing or significantly shortening probation periods could deter hiring and impede growth. Businesses view probation as critical for evaluating new hires, with concerns that changes could lead to a surge in costly unfair dismissal claims.
The proposed reforms, spearheaded by Rayner, are a key component of Labour’s manifesto commitment to strengthen workers’ rights. This includes ending zero-hour contracts, prohibiting ‘fire and rehire’ practices, increasing the minimum wage, and enhancing the right to request flexible working and a four-day week. Labour’s aim is to ‘make work pay’ and provide basic individual rights from day one, moving away from the current system that leaves workers unprotected for up to two years against unfair dismissal, parental leave, and sick pay.
While Rayner and Reynolds have conducted joint meetings with CEOs, unions, and lobby groups to elucidate the proposed reforms, business leaders have expressed significant objections. A survey by the Confederation of British Industry (CBI) indicated that 62% of its members, including major companies such as AstraZeneca, Drax, and PwC, feel that the UK is becoming less attractive for business and investment, with impending job market reforms cited as a primary concern.
Additionally, the Institute of Directors’ economic confidence index plummeted from +7 in July to -12 in August, with recent news regarding employment rights reforms identified as a significant factor in the decline. The disagreement between Rayner and Reynolds follows other internal divisions within Labour’s cabinet, including dissatisfaction over the decision to eliminate the winter fuel allowance. Wes Streeting, Health Secretary, recently expressed his dissatisfaction with the policy, underscoring broader tensions within the party as it seeks to balance reform ambitions with economic concerns.
This week is expected to be pivotal in resolving the dispute, as the government prepares to introduce its employment rights bill next month. Ministers have committed to presenting the bill within the first 100 days of taking office, but sources indicate uncertainty regarding an agreement on day one rights in time. “Getting [Chancellor] Rachel Reeves, Jonathan [Reynolds], and Angela [Rayner] in the same place will be the point at which we can close it off,” a Whitehall source noted.
A government spokesman emphasised that the priority remains economic growth and wealth creation, adding, ‘Our plan for better workers’ rights is designed to help people into secure work and lead to a more productive workforce. This is why we are working in close partnership with business and civil society to find the balance between improving workers’ rights while supporting the brilliant businesses that pay people’s wages.’
As Labour navigates these complex negotiations, the outcome will be closely watched by both employees and employers, with significant implications for the UK’s labour market and economic outlook.
