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Sir Keir Starmer’s Labour party is set to unveil a weakened package of workers’ rights in the coming weeks in its latest softening of radical policies ahead of the upcoming general election, the Financial Times has learnt.
Labour has vowed to include in its manifesto a long list of employment policies ranging from higher sick pay to ending employers’ use of “fire and rehire” and reversing anti-strike legislation as part of its “New Deal for Working People”.
The package, first outlined in 2021, has been billed by Starmer as the biggest increase in workers’ rights for decades, with the Labour leader warning business leaders in February it would “not please everyone in the room”.
But behind the scenes shadow ministers have been discussing how to tone down some of the pledges to ease employer misgivings as the party tries to boost its pro-business credentials, according to people familiar with the matter.
Those talks, along with a period of focused outreach to business on the policies, have now concluded and the finessed package of measures is set to be published in the coming weeks, the people said.
The move is likely to anger some trade union leaders but please business groups, which have become more vocal in raising concerns since Starmer’s February speech.
“The whole tone of everything they’ve been saying on workers rights has been attempting to be constructive compared to a couple of months ago,” said one lobbyist.
One business leader said that after several meetings with the party they were now “pretty relaxed” about its plans.
Shadow ministers will hold a meeting with union general secretaries in the coming weeks to seek their approval for the new version of the workers rights package, or at least minimise their resistance, according to Labour figures.
The renewed New Deal will emphasise that many of the policies will be subject to formal consultation with business, allowing for dilution of the promises when turned into practice and the potential for significant delay.
Labour originally said it would bring forward legislation within its first 100 days in office to enact the reforms. Some of this could come in the form of “draft legislation” that will be subject to consultation before it begins the formal process of becoming law, according to Labour officials. Other policies could come in later through secondary legislation.
One Labour official said: “While we want to hit the ground running, some policies will take time to implement and deliver.”
At a meeting with business groups last week, deputy Labour leader Angela Rayner and shadow business secretary Jonathan Reynolds said there would be consultations on many of the employment policies.
Reynolds and Rayner told businesses they wanted to “raise the floor of employment standards and to get rid of unscrupulous employment practices” rather than eliminate flexibility, according one attendee.
The shadow ministers said there would be opportunities to raise any concerns around the workability of the plans, the attendee added.
Rayner, who has spearheaded the New Deal, in March pushed back against former Labour cabinet minister Lord Peter Mandelson after he criticised the pledges. She likened his complaints to the “squealing” by business over the introduction of the minimum wage a generation ago. The deputy leader could now face a backlash from union leaders.
“It won’t be an easy sell for Angela but . . . this is still a substantial package of reforms which will improve life for workers,” said a second Labour official.
“There’s a clarification going on,” said a third person close to the process. “There will be far more consultation than before.”
A Labour spokesperson said the New Deal would remain a “core part of Labour’s offer to the country” at the general election expected this year.
“Our commitments to bring forward legislation to parliament within 100 days to deliver the New Deal and to consult widely on implementation have not changed,” they said.
People familiar with the updated version of Labour’s programme said it would include a promise to consult on its plan to create a “single status” for all workers except those who are genuinely self-employed.
There will also be a review of parental leave within the first year of a Labour government, they added.
The original New Deal envisaged “fair pay agreements” in all sectors which would see collective bargaining in each different industrial sector. This will become a promise to consult on a fair pay agreement only in the social care sector.
Plans to give workers a “right to switch off” will not be enshrined in law but instead will be in a code of practice overseen by the government’s Acas employment arbitration service, with the smallest companies exempted.
Although Labour will still vow to give workers basic job protections from day one of employment, companies under the revised plans would be able to use probationary periods and staff could still be dismissed for “fair reasons”.
Labour will also clarify that its promised ban on zero-hours contracts will be a right to a contract reflecting a worker’s regular work pattern over the previous 12 weeks, the people said.
The New Deal is the latest Labour policy package to be dialled down after the party in February slashed its previous pledge to borrow £28bn a year for green investment.