Keir Starmer is poised to encounter fierce pressure from both corporate leaders and trade unions regarding former deputy prime minister Angela Rayner's landmark Employment Rights Bill, as the reform package continues its journey through parliament.
The prime minister and recently appointed business secretary Peter Kyle must balance the competing demands of employers and unions, which constitute a substantial share of Labour Party funding, as reported by .
Top government figures are expected to address union chiefs at the Trade Union Congress in Brighton this week, whilst debates and resolutions concerning the Employment Rights Bill will dominate proceedings.
Christina McAnea, head of Britain's biggest trade union, declared it would be a "huge mistake" for Labour to dilute the legislation following the removal of several ministers leading the reforms during a comprehensive government reshuffle at the weekend.
"It doesn't send out a very good message that the people who were absolutely committed to driving through the employment rights bill are no longer doing those jobs," she said.
Sharon Graham, the general secretary of Unite, has warned the union might sever ties with Labour should it change course on the bill, with a ballot scheduled to take place.
Labour backbenchers are equally concerned that postponements to the bill's enactment could leave it exposed to modifications. Downing Street officials have initiated talks about diluting the Rayner-spearheaded legislation following sustained pressure from leading business organisations, the Financial Times reports, amid concerns that additional bureaucracy surrounding "fire and rehire" tactics and zero-hour contracts might increase operational expenses.
Starmer's growth ambitions under pressure
Shadow business secretary Andrew Griffith dispatched correspondence to Kyle urging him to prioritise the "national interest first" and heed worries expressed by º£½ÇÊÓƵHospitality and the British Retail Consortium.
"Any credible 'reset' of this government requires that this Bill be shelved and the government look afresh at measures to promote growth and competitiveness of the º£½ÇÊÓƵ economy," Griffith said.
Parliamentarians are poised to examine amendments suggested in the House of Lords to substitute fresh protections against unjust dismissal from day one of employment and a dilution of zero-hours arrangements.
Justin Madders, the previous employment minister who was substituted during the cabinet reshuffle, expressed disappointment at not witnessing the Bill receive Royal assent whilst in office, stating he would campaign for it to reach "over the line as per our manifesto".
The 200-page legislation's journey through Westminster could impact the Autumn Budget in November. The Office for Budget Responsibility (OBR) did not fully assess the bill's impacts on growth and employment at the Spring Statement in March, following claims from economists about a lack of detail within the bill.
It proposed that the bill will have a "net negative effect" on the º£½ÇÊÓƵ economy.
The government has contended that the bill is "pro-growth" and "pro-worker", however, business surveys have highlighted owners' concerns about potential additional bureaucracy.
Its own analysis indicated that policies could impose an annual cost of up to £5bn on businesses, with small and medium-sized enterprises likely to bear the brunt of extra regulation.
