Labor MPs are preparing to demand further concessions on workers’ rights as the price of accepting ministers’ decision to scrap the scheme’s first-day protections against unfair dismissals.
MPs who are unhappy with the move will push for stronger protections in other areas such as fraudulent self-employment arrangements as part of Labour’s “work and pay” agenda.
But the Government looks set to get its revised employment rights package through the Commons despite backbench anger over the eleventh-hour deal, which critics say violates Labor manifesto commitments.
Ministers announced on Thursday they are scrapping plans to give workers the right to make unfair dismissal claims against employers from their first day in a new job. Andy Macdonald, Neil Duncan-Jordan and Rachel Maskell are among the Labor MPs to criticize the decision.
But it is understood that former Deputy Prime Minister Angela Rayner, who spearheaded the legislation and previously warned against attempts to weaken it, is not planning to lead a rebellion over it.
One source said Rayner wanted to see the bill passed through its final Commons stage next month rather than risk further delays, and she intended to hold talks with colleagues on the government’s amendments next week.
Another source familiar with his thinking said he had no objection to opposing the deal because it had been rejected by the unions. Business Secretary Peter Kyle is understood to have spoken to Rayner about the deal on Thursday.
Justin Madders, the former employment rights minister who helped shape the legislation with Rayner until September, said the government’s collapse “raises questions about how committed the government is to the rest of the bill and the wider working pay agenda. We need to see some serious assurances that they will get the rest of it through.”
One priority backbenchers have identified is to review worker status to crack down on fraudulent self-employment – the practice of employing people as freelancers so that they are not eligible for basic protections.
The government now intends to introduce the right to unfair dismissal after six months’ service rather than the first day, while other rights to paternity leave and sick pay are still set to go ahead, coming into effect in April 2026.
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Government sources have insisted that the agreement was necessary to pass legislation before Christmas to implement those protections in April, rather than risk a lengthy parliamentary process.
The deal emerged in secret talks between business and union representatives on Monday and Tuesday.
The talks were called by the government to break the parliamentary deadlock over the proposals. Conservatives, Liberal Democrats and cross-bench members of the House of Lords strongly opposed the plan on its first day to protect workers against unfair dismissal.
Major concessions have been made to unions in return for the climbdown. A six-month right to unfair dismissal will be enshrined in primary legislation, and the government will completely remove limits on the amount workers can claim.
Downing Street and senior ministers have insisted that the change is not a breach of Labour’s election promises, pointing out that the manifesto promised to “consult fully with businesses, workers and civil society on how to put our plans into practice before the legislation is passed”.
The manifesto promised that the bill’s provisions “will … include basic rights such as parental leave, sick pay and protection from unfair dismissal from day one”.
Employment Rights Minister Kate Dearden held a virtual meeting with Labor MPs on Friday morning in an attempt to ease concerns. Kyle and Dearden plan to continue talks with backbenchers over the weekend.
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