Rayner’s workers’ rights revolution unravels  as ministers U-turn on ‘job killing’ right for workers to claim unfair dismissal from DAY ONE

Angela Rayner’s workers’ rights revolution began to unravel today as ministers abandoned plans to give people the right to claim unfair dismissal from day one.

Industry sources told the Mail the government has made a dramatic U-turn on the issue, which has disrupted relations with business for months.

Behind the scenes, ministers reached a compromise that would see the TUC and Labor-backing unions support the move.

But the plan is likely to provoke a backlash from some Labor MPs and will be a blow to former deputy prime minister Angela Rayner, who has championed the plan.

The U-turn comes just days after Downing Street said it would resist any attempts to water down the plan.

Shadow business secretary Andrew Griffith said: ‘This humiliating U-turn on Labour’s flagship bill is a victory for the Conservatives and will provide some relief for business. But that’s just one element of a rushed, 330-page, job-killing bill. This doesn’t change the fact that the bill is still not fit for purpose, nor does it change the fact that it would give unions the ‘Right of Movement’, ban joking in pubs or end flexible working.

‘Keir Starmer must develop a backbone, stand up to union paymasters and scrap every job-destroying anti-growth measure in his employment rights bill.’

CBI chief Rain Newton-Smith has urged ministers to abandon ‘damaging’ Employment Rights Bill

The move will be seen as a sign that the workers’ rights revolution is unraveling after Ms Rayner left the government in September.

Ms Rayner claimed ‘fundamental rights’ would be ‘truly transformative’ for many workers.

A Whitehall source said ministers understood employers’ concerns about the impact on employment.

The source said workers would no longer have the right to claim unfair dismissal unless they had been at work for at least six months. This period is shorter than the current two years but is designed to ease fears among employers that they could become the target of vexatious allegations from junior staff.

Ministers also agreed that this new six-month entitlement could only be reduced in the future through primary legislation.

They are also desperate to end their row with the Lords over the measure, which threatens to derail Labour’s flagship Employment Rights Bill.

A Ministry of Business and Trade spokesman said ministers had mediated talks between employers and unions in recent days to reach a compromise.

Day one sick pay and paternity leave entitlements will be introduced in April next year, the spokesman said. However, from the first day of employment, the right to claim unfair termination was lost.

The spokesman said: ‘Reforms that will benefit millions of workers, including some of the lowest-paid workers, will otherwise be significantly delayed if the bill does not reach Royal Assent in line with our delivery timetable. ‘Businesses also need time to prepare for a series of significant changes.’

Business leaders have slammed the Employment Rights Bill, which the government’s own assessment shows will cost firms £5bn a year in extra red tape. However, the right to claim unfair dismissal was the biggest controversy.

CBI chief Rain Newton-Smith described this week’s legislation as ‘disappointing and damaging’ and accused ministers of ignoring employers’ concerns.

‘Business is not just a resource to be taxed when the going gets tough. “They are the ones creating jobs, creating opportunities, raising standards of living and driving real change in communities,” he said.

Business Minister Peter Kyle faced criticism over the issue at this week’s CBI conference and hinted at a possible downturn.

But No 10 has ruled out any concessions, saying the Prime Minister will resist any attempt to water down the Employment Rights Bill in the House of Lords.

A spokesman for the Prime Minister said: ‘The Employment Rights Bill is good for workers, good for businesses and good for the economy.

‘We will defeat any attempts to undermine our plans, including diluting day one protection against unfair dismissal and limiting the ban on exploitative zero hours contracts.

‘The best British companies already have these protections and we want to raise the standard, creating the right conditions for long-term sustainable growth.

‘As we have said from the beginning, we are determined to get the details of these reforms right. That’s why we’re asking businesses and employees to share their views as part of our consultations.’

Conservative Lord Leigh, who leads the opposition in the House of Lords, told the Daily Mail: ‘I am pleased that the government has finally heard the arguments in the House of Lords, which explain how this bill could cause huge harm to British business. There was not a single business representative body or even a single business that supported these proposals.

‘However, there are still some changes that are unsatisfactory, particularly regarding the granting of enormous powers to unions, and these must also be opposed.’