Wed, 07 Jan 2026

Wed, 07 Jan 2026 Labour's workers' rights concessions to save businesses billions, assessment shows

The government will phase in the reforms over several years, with many measures subject to consultation.

* A government impact assessment shows that Labour's workers' rights reforms will save businesses £4bn a year.
* Initial analysis estimated costs at up to £5bn, but updated estimate is £1bn due to concessions made by ministers.
* The Employment Rights Act will give workers access to sick pay and paternity leave from the first day on the job, introduce new protections for pregnant women and new mothers, and enhance unfair dismissal protections after six months in employment.
* 18 million workers are expected to benefit from stronger workers' rights, up from an earlier estimate of around 15 million.
* The measures will have a small positive impact on employment, boosting the number of people in work by 0.1%, and could have a "small, positive direct impact on economic growth".
* Trade unions welcome the impact assessment, but left-wing Labour MPs and union leaders criticise the concessions as watering down the original reforms.
* The British Chambers of Commerce says the £1bn estimate is likely to be an underestimate and doesn't account for harder-to-quantify costs.
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