Workers' rights compromise will not fix problems

THE UK's autumn Budget tried to appeal to both workers and employers.

- Danny Buckley, workplace learning director, Loughborough University

But the decision the very next day to soften a key plan to improve workers’ rights shows how difficult that balance has become.

Just hours after Chancellor Rachel Reeves delivered her Budget, the government announced it would backtrack on a manifesto pledge to give all workers the right to claim unfair dismissal from day one of their employment.

Business groups had warned that the plan could discourage hiring, particularly for smaller firms that depend on probation periods to assess staff. Critics, of course, call it a broken promise.

Other planned day-one rights - to sick pay and paternity leave - will still go ahead from next year.

But the government argued that delaying protection from unfair dismissal until six months after someone starts a new job (it is currently two years) is a practical compromise.

The decision is supposed to be pro-business and pro-hiring. But while workers will now miss out on what would have been a major change to their rights as a new employee, the move is unlikely to be enough to encourage under-pressure firms to take on staff.

The fact is that this debate sits within a wider policy environment where employing people has become harder.

Regardless of dismissal rights, rising labour costs, tight margins and increasingly complex rules mean many firms are hesitant to take on staff.

But this is not to say that watering down workers’ protections in a bid to help firms is the way forward.

The standard employment relationship is still the main way workers access rights and social protection, so its erosion raises serious concerns for working conditions and basic benefits.

When formal employment offers fewer protections, the gap between secure jobs and insecure arrangement narrows.