Zarah ChoudharyChancellor Rachel Reeves is set to meet with regulators this week to step up pressure on Britain’s watchdogs to scrap ‘anti-growth’ rules, as she faces strong criticism from business leaders.
The Confederation of British Industry (CBI) told the BBC that Labour’s proposed ‘making work pay’ reforms could force companies to shed jobs and create “an adventure playground for employment rights lawyers.”
Among the most contentious proposals were restricting exploitative zero-hours contracts (such as requiring minimum notice for shift changes), ending ‘fire and rehire’ practices, and removing the two-year qualifying period for unfair dismissal.
Critics argued that these measures would reduce employers’ flexibility and discourage hiring.
Jonathan Mansfield, employment law partner at Spencer West LLP, highlighted the challenges these reforms could pose for businesses.
He said: “The removal of the two-year cushion for unfair dismissal rights is a major shift.
“Currently, many employers rely on this period to address hiring mistakes or adapt to financial changes.”
Mansfield noted that while previous Labour Governments compromised on a one-year qualification period, this proposal marked a bolder stance under Keir Starmer’s leadership.
Mansfield concluded by predicting that the reforms, set for implementation in August 2026, would lead to a “wait-and-see period” as employers adapt to the changes.
“While some concessions around probationary periods are expected, the uncertainty surrounding these reforms is likely to have significant implications for workplace practices and employment trends,” he explained, warning that many businesses may turn to contractors or short-term hires to mitigate the risks.
