Labour MPs are preparing to demand further concessions on workers’ rights as the price of accepting ministers’ decision to ditch plans for day-one protection against unfair dismissal.
MPs who are unhappy about the move will push for stronger protections in other areas, such as bogus self-employment arrangements, as part of Labour’s “make work pay” agenda.
But the government looks set to get its amended employment rights package through the Commons despite backbench anger at the eleventh-hour compromise, which critics say breaches a Labour manifesto commitment.
Ministers announced on Thursday that they were axing a plan to give workers the right to make an unfair dismissal claim against an employer from the first day in a new job. Andy McDonald, Neil Duncan-Jordan and Rachael Maskell have been among the Labour MPs to criticise the decision.
But it is understood that Angela Rayner, the former deputy prime minister who spearheaded the legislation and has previously warned against attempts to water it down, is not planning to lead a rebellion over the climbdown.
A source said Rayner wants to see the bill pass its final Commons stages next month rather than risking further delay, and that she intends to engage with colleagues over the government’s amendments next week.
Another source familiar with her thinking said she was not minded to oppose the compromise because it had been thrashed out by the unions. It is understood that Peter Kyle, the business secretary, spoke to Rayner about the compromise on Thursday.
Justin Madders, the former employment rights minister who helped shape the legislation alongside Rayner until September, said the government’s climbdown “raises questions about how committed the government are to the remaining bill and the wider make work pay agenda. We need to see some serious assurances that they will deliver on the rest of it.”
One priority backbenchers have identified is a review of worker status to crack down on bogus 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 over unfair dismissal after six months of service instead of on day one, while other day-one rights to paternity leave and sick pay are still due to go ahead, coming into effect in April 2026.
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Government sources have insisted that the compromise was necessary to pass the legislation before Christmas in time to enforce those protections in April, instead of risking a protracted parliamentary process.
The deal was thrashed out in secret negotiations between business and union representatives on Monday and Tuesday.
The talks were convened by the government to break a parliamentary impasse over the proposals. Conservative, Liberal Democrat and cross-bench members of the House of Lords had strongly resisted the plan to give workers protection against unfair dismissal on day one.
Key concessions have been made to the unions in return for the climbdown. The six-month right over unfair dismissal will be enshrined in primary legislation, and the government will entirely remove the cap on the amount that employees can claim.
Downing Street and senior ministers have insisted that the change does not amount to 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 legislation is passed”.
The manifesto pledged that the bill’s provisions would “include … introducing basic rights from day one to parental leave, sick pay and protection from unfair dismissal”.
Kate Dearden, the employment rights minister, held a virtual meeting with Labour MPs in an attempt to mollify concerns on Friday morning. Kyle and Dearden are planning to continue engaging with backbenchers over the weekend.