Seven of Britain’s most influential industry bodies have urged MPs to accept an array of House of Lords amendments to the government’s workers’ rights package, warning the overhaul is already having a “chilling” impact on jobs and the economy.

The cohort of heavyweight lobby groups – which includes all the so-called ‘Big Five’ business bodies as well as the British Retail Consortium (BRC) and UK Hospitality – said some of the changes to the contentious Employment Rights Bill proposed by peers gave businesses “real hope”, and called on MPs to accept them when the Bill reaches the Commons.

David Hale, government affairs director at the Federation of Small Businesses, told City AM it was “essential” the government accepts improvements made to the workers’ rights bill by the Lords, including a “crucial” proposal to extend workers’ qualifying period to six weeks.

And the BCC’s Jane Gratton said parliamentarians must back the amendments to the package if they want businesses to help “grow the economy and create more opportunities for people across the country”.

Peers tabled several amendments to the government’s flagship Employment Rights Bill during a report stage debate this week, many of which sought to water down some of the overhaul’s burdensome demands on businesses.

Chief among them was an attempt to remove the provision to protect workers from unfair dismissal at “day one” of employment – instead installing a probation period of six months. Lords also suggested MPs vote to retain the turnout threshold of 50 per cent of union members voting in a ballot for it to be valid.

The changes were hailed as “positive, practical and pragmatic” by Helen Dickinson, chief executive of the British Retail Consortium, who warned that ignoring them would undermine ministers’ stated ambition to “get Britain working again”.

But she cautioned: “Even with these amendments accepted, retailers remain worried about the consequences for jobs from other areas of the bill.”

The ‘biggest upgrade to workers’ rights in a generation’

The Labour party made delivering the “biggest upgrade to workers’ rights in a generation” one of its flagship manifesto pledges in the run-up to last year’s general election. Deputy Prime Minister Angela Rayner has spearheaded the drive, which contains several measures popular across UK plc and unions, including banning so-called ‘fire and rehire’ practices.

But businesses have warned that other reforms – like handing workers a horde of new rights from day one of a new job and putting bosses on the hook to pay statutory sick pay from the first day of a staff member’s illness – will harm their ability to take on new staff and leave them vulnerable to costly and “vexatious” lawsuits.

The Institute of Directors (IoD) found that seven in 10 of its members believe the overhaul would lead to fewer new hires and kibosh the government’s hopes of kickstarting the economy.

Responding to the Lords amendments, the lobby group’s principal policy adviser for employment, Alex Hall-Chen, said: “Recent amendments… are a welcome reflection of engagement with the business community to understand its key concerns with the bill.

“[They] will go a considerable way to stemming the negative impacts that the bill’s measures are already having on employers’ appetite to hire.”