Angela Rayner, Deputy Prime Minister, is set to grant an additional 9 million UK workers the right to sue their employers for unfair dismissal from the first day of their employment, as part of a sweeping overhaul of workers’ rights.

Currently, employees must be with a company for two years before they qualify for these powers.

Business leaders have criticised the reform package, calling it “chaotic” and warning that it risks damaging companies’ willingness to hire new recruits. The Federation of Small Businesses and the Recruitment and Employment Confederation have expressed concerns about potential economic inactivity and reduced business confidence.

The reforms, described as the “biggest upgrade” to workers’ rights in a generation, include measures such as banning fire and rehire practices and ending exploitative zero-hours contracts. However, elements of the package have been watered down, including extending the recommended probationary period for new hires.

Labour’s new measures aim to drive productivity by modernising workplaces, with Rayner stating: “We’re replacing a race to the bottom with a race to the top.” However, critics argue that the changes will empower unions to hold businesses to ransom and stifle investment, with shadow business secretary Kevin Hollinrake warning that Labour’s policies may negatively impact business confidence.

The new Employment Rights Bill is expected to be introduced this week, with further reforms, such as access to flexible working and improved parental leave, also on the agenda.