Deputy Prime Minister Angela Rayner is at odds with Business Secretary Jonathan Reynolds over plans to give workers full employment rights from their first day of work, as business concerns grow over the impact of proposed reforms.
At the heart of the disagreement is how probationary periods will work in the new system, part of Labor’s wider effort to overhaul workers’ rights within the government’s first 100 days.
Rayner is pushing for employees to be given full employment rights after a short probationary period, including the ability to bring unfair dismissal claims in employment tribunals. Currently, workers must work for at least two years to be eligible for this protection. In contrast, Reynolds supports a longer probationary period of up to nine months, arguing that it provides an appropriate balance between employee rights and business needs.
A Whitehall source described the debate as “intense” and pointed out that an agreement within the next two weeks remained uncertain. “Angela is less interested in a longer probationary period, Reynolds thinks nine months is appropriate. It is unclear whether an agreement will be reached,” the source said.
The discussions come amid growing discontent among business leaders who argue that eliminating or dramatically shortening probation periods could discourage hiring and slow growth. Companies view probation periods as crucial when assessing new employees and there are fears the changes could lead to a rise in costly and time-consuming unfair dismissal claims.
The proposed reforms, led by Rayner, are part of Labor’s manifesto to strengthen workers’ rights, including ending zero-hours contracts, banning “fire and rehire” practices, increasing the minimum wage and strengthening the right to Require flexible working hours four day week. Labour’s pledge aims to “make work pay” and guarantee basic individual rights from day one, ending the current system that gives workers up to two years of unfair dismissal protection, parental leave and sick pay lets wait.
While Rayner and Reynolds have held joint meetings with CEOs, unions and lobby groups to explain the proposed reforms, business leaders have raised significant concerns. A survey by the Confederation of British Industry (CBI) found that 62% of members, including major companies such as AstraZeneca, Drax and PwC, believe the UK is becoming less attractive as a place to do business and invest, citing impending labor market reforms Main concern.
The Institute of Directors’ economic confidence index, sometimes referred to as the “chief union” index, fell sharply from +7 in July to ‑12 in August, with recent news about workers’ rights cited as a key factor in the decline.
The disagreement between Rayner and Reynolds follows other internal disagreements within the Labor cabinet, including dissatisfaction over the decision to scrap the winter fuel allowance. Health Minister Wes Streeting recently expressed his dissatisfaction with the policy, citing wider tensions within the party as it balances reform ambitions with economic concerns.
This week is expected to be crucial in resolving the dispute as the government prepares to unveil its workers’ rights bill next month. Ministers have pledged to introduce the bill within the first 100 days of taking office, but sources say it remains “unclear” whether an agreement on day one rights can be reached in time. “If we get (Chancellor) Rachel Reeves, Jonathan (Reynolds) and Angela (Rayner) together in one place, we can complete the whole thing,” noted a Whitehall source.
A government spokesperson stressed that economic growth and wealth creation remains a priority, adding: “Our plan for better workers’ rights is designed to help people find secure jobs and lead to a more productive workforce.” This is why we work “Working in close partnership with business and civil society to find a balance between improving workers’ rights and supporting the great companies that pay people’s wages.”
As Labor conducts these complex negotiations, the outcome will be closely watched by both workers and employers, which will have a significant impact on the UK labor market and economic outlook.
