Angela Rayner has urged Labour leader Sir Keir Starmer and government ministers not to make further concessions on the party’s proposed Employment Rights Bill, stressing the importance of maintaining strong protections for workers amid ongoing parliamentary debates. Speaking in the House of Commons on Tuesday, Rayner emphasized that it is “not the time to blink or buckle” on legislation designed to strengthen the right to strike and improve workers’ rights, despite concerns from employers about its potential economic impact.
The Bill has been under scrutiny for several months, particularly in the House of Lords, where it has faced resistance and calls for amendments. The Labour leadership faced criticism last month after abandoning a key manifesto commitment to allow workers to claim unfair dismissal from their first day in a new job. Instead, ministers agreed to extend the qualifying period to six months, a reduction from the current requirement of two years, in an effort to secure parliamentary approval. However, the government also decided to remove the existing £118,223 cap on unfair dismissal payouts, a move that experts say could significantly increase the financial liabilities for businesses.
Rayner, who served as deputy prime minister and is seen by some as a potential successor to Starmer, accused members of the House of Lords of siding with “vested interests” to block the manifesto pledge, urging them to move forward without further delay. Former Labour frontbencher Andy McDonald echoed her concerns, criticizing the Lords for obstructing the government’s mandate and advising ministers not to yield to pressure.
The Employment Rights Bill has drawn sharp criticism from business groups and economic analysts. Research from the think-tank Growth Commission suggests the legislation could cost the UK economy up to £38 billion over five years. This estimate accounts for both the extension of unfair dismissal protections and the removal of the payout cap, which could expose employers to substantial compensation claims. Shanker Singham, chairman of the Growth Commission, warned that restricting employers’ ability to dismiss workers could chill hiring, further complicating the country’s declining labour force participation rate.
Business representatives have voiced concerns over the Bill’s impact, with the British Chambers of Commerce describing it as “hugely damaging” and legal experts from Lewis Silkin characterizing the changes as a “seismic” shift potentially detrimental to economic growth. Tory business spokesman Andrew Griffith criticized the government’s approach, claiming the legislation’s increased regulatory burden risks “snuffing out jobs” and imposing unsustainable costs on small businesses and the public sector. Griffith also highlighted new requirements for employers to distribute Government-approved statements intended to encourage union membership, a provision described by opponents as “pro-union propaganda.”
Unions have welcomed the proposed measures, viewing them as vital tools to halt decades-long declines in membership and strengthen collective bargaining power. As the Employment Rights Bill continues to move through Parliament, MPs were expected to reject several attempts by peers to dilute its provisions, keeping the future of workers’ rights and business interests at the heart of a contentious political battle.