A series of concessions to Labour's flagship workers' rights reforms will save businesses billions of pounds, according to a government impact assessment released Wednesday. An initial analysis by officials estimated that implementing the party's measures to bolster workers' rights would cost firms up to £5 billion annually. However, the updated analysis, which accounted for major concessions made by ministers, now projects the cost to companies at £1 billion a year.

The concessions were met with approval from business groups, but sparked criticism from some left-wing Labour MPs and union leaders. The Employment Rights Act aims to provide workers with access to sick pay and paternity leave from their first day on the job, while also introducing new protections for pregnant women and new mothers.

In November, Labour abandoned plans to grant all workers the right to claim unfair dismissal from their first day in a job. Instead, enhanced protections will be implemented after six months of employment, representing the bill's most significant measure. Alongside the concessions on unfair dismissal, the government intends to phase in the overall package over several years.

The move to scale back the initial proposals reflects a balancing act between bolstering worker protections and mitigating the potential financial burden on businesses. The government hopes that the phased implementation will allow companies to adjust to the new regulations without facing immediate economic strain. The debate surrounding the Employment Rights Act highlights the ongoing tension between advocating for workers' rights and fostering a business-friendly environment. The coming months will reveal the full impact of these concessions on both businesses and the workforce.