Lucy Burton Employment Editor

15 September 2024 6:00am

Close to two thirds of British businesses think Labour’s reforms to workers’ rights will make the country a less attractive place to invest.

Proposals being put forward by Angela Rayner will mean staff no longer have to wait two years until they qualify for full employment rights, instead giving immediate protection from unfair dismissal. The proposals are part of a package meant to strengthen workers’ rights and “make work pay”.

However, the plans have alarmed company leaders who fear they will face a wave of employment tribunals as a result of the changes. There is also confusion as to how probation periods would work under the new system. Many companies have said the plans will put them off hiring.

Matthew Percival, of the Confederation of British Industry (CBI), said that day one workers rights were the “biggest concern” among businesses.

A survey of CBI’s members, who include FTSE 100 giants including AstraZeneca, Unilever and GSK, found 62pc predict a decline in the UK as an attractive place to invest and do business over the next five years.

Similar polling among smaller businesses have reflected similar anxiety.

Mr Percival said there were concerns that new recruits won’t be given “a chance” if the day one rights are too rigid.

He said: “I don’t find that anyone is saying to me ‘we need two years’ but people get nervous when it comes down to 12 months.”

He added: “The hard reality is that companies are...

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