Labour workers’ rights concessions to cut cost to business by billions, analysis shows

The Guardian - World NewsCenter-LeftEN 2 min read 100% complete by Richard Partington Senior economics correspondentJanuary 7, 2026 at 03:00 PM

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A government analysis reveals that Labour's revised workers' rights bill is projected to cost UK businesses significantly less than initially estimated, around £1 billion compared to a previous estimate of up to £5 billion. This reduction is attributed to phasing in changes over several years and policy design developments. The bill, which includes day-one employment rights and banning zero-hours contracts, was amended after business lobbying, with ministers abandoning day-one unfair dismissal claims in favor of a six-month threshold. While the government acknowledges increased costs for businesses, including changes to sick pay and paternity leave, it argues the benefits outweigh the costs, representing a modest increase compared to total UK employment costs. The analysis estimates that 18 million workers could benefit from the changes.

Key Entities & Roles

Key Player Opposition Context

Unite 40% Conservatives (UK) 40% Sharon Graham 50% House of Lords 60% UK ×380% Labour Party (UK) ×490%

Keywords

workers' rights 100% employment rights bill 90% business costs 80% government analysis 70% unfair dismissal 60% zero-hours contracts 60% trade unions 50% paternity leave 40% sick pay 40%