Civil war within Labour as Angela Rayner's proposed changes to workers' rights are challenged by colleague | Politics

Labour is facing a huge backlash over its plans to introduce extreme labour reforms which business has warned could cause “real damage” to the economy.

Angela Rayner is reportedly at odds with Economic Affairs Minister Jonathan Reynolds over the hard-left reforms, with less left-wing members of the government concerned they could deter businesses from hiring.

The Labour Party’s manifesto commits to a “new deal for working people”, which would include the right to flexible working, a ban on zero-hours contracts and fire and rehire.

The controversy was sparked by Ms Rayner’s push to guarantee all workers the same rights from day one, including parental leave, sick pay and protection against unfair dismissal.

Businesses are already warning about the cost and regulatory burden the bill will create, with one source recently telling the Times that the bill is like “using a sledgehammer to crack a nut.”

A row has now broken out between Ms Rayner and Mr Reynolds over when those employment rights should apply to a worker.

The Deputy Prime Minister, one of the few left-wingers still at Sir Keir’s table, is pushing for rights to be guaranteed from day one, whether or not the employee is on probation.

This could include the right to sue their company in an employment tribunal for unfair dismissal, a right currently reserved for those who have worked somewhere for two years.

Meanwhile, the Trade Secretary is pushing for workers to wait nine months before getting extra rights, while he also wants a one-year trial period before someone can take their employer to court for unfair dismissal.

A Whitehall source told the Telegraph: “Day one rights are proving very difficult.

“Angela is less in favour of a longer trial period, Reynolds thinks nine months is reasonable. It is not yet known whether an agreement will be reached.”

Even more embarrassing for the government, Sir Keir promised that historic reforms to workers’ rights would be passed within Labour’s first 100 days in government.

Sir Keir is now on his 73rd day in the job, giving his team less than a month to iron out the fundamental differences between Ms Rayner and Mr Reynolds.

A Labour source stressed that the two ministers were “close friends” and their disagreements were “not acrimonious”.

Companies are concerned about the plans, which they say amount to a ban on trial periods.

Martin McTague, national chairman of the Federation of Small Businesses, said the changes would hit small businesses hardest, which employ around 60% of the UK workforce.

“The biggest dangers will come from the increased risks and costs in determining who to hire and whether to hire. A formal layoff process on day one would increase the risks and could cause real damage to the economy,” he said.

“Anyone who looks at record economic inactivity without thinking about how small businesses are hiring is looking at the problem the wrong way.”

The FSB is calling on the government to reconsider its position on duties from day one, as well as to exempt companies with fewer than 250 employees.