Labour pulls back from ‘day one’ protections as it unveils workers’ rights overhaul

Labour has pulled away from its pledge to give employees protection from unfair dismissal from the first day in a job, according to reports, as it unveils its long-awaited package of employment reforms today.

The Employment Rights Bill, which Labour promised to introduce within its first 100 days, is set to be laid before Parliament today.

The 28 individual measures in the bill will include ending exploitative zero-hour contracts and banning fire and rehire tactics, while establishing bereavement and parental leave rights from day one of employment, as well as removing the lower earnings limit and waiting period on statutory sick pay.

One million people on zero hours contracts will gain guaranteed working hours if they want them, while some 1.5m parents will gain flexibility with unpaid parental leave, Labour said, but most measures are not expected to be implemented before the autumn of 2026.

A new Fair Work Agency will bring together existing enforcement bodies to enforce rights such as holiday pay and support employers looking for guidance, the government added.

Separately, the government will publish a breakdown of future reforms it hopes to implement, including – subject to consultation – a right for workers to switch off, a consultation on the move to a single worker status, and reviews of the parental and carers leave systems.

However, in a concession to business, it will consult on whether the new probation period for workers should have a maximum length of six months or nine months, the Financial Times reported.

Starmer had initially promised to give employees protection from unfair dismissal from their first day at work – a pledge that had rattled Britain’s top business groups.

The report comes after Business secretary Jonathan Reynolds recently confirmed to The Guardian that the government’s reforms would likely mean a maximum probation period of about six months at the vast majority of businesses.

Despite the reported concession, Labour framed the overhaul as a bid to supercharge economic growth and make firms and workers more productive.

Business secretary Jonathan Reynolds said: “It is our mission to get the economy moving and create the long term, sustainable growth that people and businesses need.

“Our plan will give the world of work a much-needed upgrade, boosting pay and productivity.”

And deputy prime minister Angela Rayner called it “replacing a race to the bottom with a race to the top, so employers compete on innovation and quality”.

She added: “By making work more secure and modernising workplaces, we will drive up productivity, improve living standards, generate jobs and investment, and pave the way for sustained economic growth that benefits working people.”

Reacting to the news, Jane Gratton, from the British Chambers of Commerce (BCC), called it “encouraging” that ministers “recognise the importance of effective consultation in getting the balance right”.

She added: “Employers, and SMEs in particular, need reassurance that these proposals will be affordable and proportionate. They are nervous about additional costs and restrictions, including how these new laws will impact their business operations.”

While Caspar Glyn KC, chairman of the Employment Lawyers Association, said: “Labour is trying to navigate a tricky tightrope to strengthen workers’ rights without creating undue costs and restrictions on businesses.

“Companies will want to have sufficient time to ensure they can dismiss employees who are unsuitable… if they feel unable to remove workers who are not a good fit, then businesses will hire more slowly and conduct more checks before bringing someone on board, which could have negative repercussions for the labour market.”

Alex Hall-Chen, from the Institute of Directors (IoD), said the government’s “commitment to consult thoroughly on the related secondary legislation will be essential to addressing unintended consequences of the reforms”.

He added: “Providing details on how this consultation will be carried out will help to mitigate the negative impact on business confidence from uncertainty.”

Unions broadly welcomed the package, with Paul Nowak, general secretary of the Trades Union Congress (TUC), saying: “This bill highlights Labour’s commitment to upgrade rights and protections for millions. 

“While there is still detail to be worked through, this bill signals a seismic shift away from the Tories’ low pay, low rights, low productivity economy.”

Gary Smith, GMB general secretary, called it “a significant and groundbreaking first step” but warned “there is long way to go… [the government] must make sure unions and workers are front and centre of the detailed discussions needed to deliver it.

“The legislation must be watertight and without loopholes that could be used by those wanting to delay the rights workers so desperately need.”