Rayner’s reforms in the area of ​​workers’ rights prevent the majority of employers from hiring new employees

Angela Rayner’s plans for a radical overhaul of workers’ rights are deterring most companies from hiring new employees.

More than half of employers said they were less inclined to hire new employees due to the proposed Workers’ Rights Act being pushed by the Deputy Prime Minister.

As part of the comprehensive reforms, employees will be granted “basic rights” from day one, including continued pay in the event of illness and the right to ignore emails outside of regular working hours.

The government has also announced that it will ban “exploitative zero-hours contracts” and give workers more opportunities to demand flexible working hours, including a four-day week.

About 57 percent of executives surveyed by the Institute of Directors (IoD) said the changes would make them “less likely to hire new staff.”

While a third of executives surveyed said the plans would have “no impact,” only two percent said they would hire more staff as a result of the changes.

Alexandra Hall-Chen of the IoD said the new legislation could have a deterrent effect on employers who would otherwise expand their payrolls.

She said: “Business leaders are concerned about the impact of the proposed new reforms on staff costs.”

In the run-up to the July election, many business leaders supported the Labour Party, but sentiment has soured in the months since.

The IoD warned last week of a collapse in business confidence triggered by fears of a tax raid in the autumn.

Ms Hall-Chen called on the government to involve business in the implementation of its workers’ rights plan.

She said: “The government’s self-imposed deadline for introducing workers’ rights legislation is just over a month away.

“Time is running out. It is therefore crucial that the government begins to negotiate seriously with business on the details of its proposed reforms to ensure that its growth objective is not jeopardised.”

Separately, the Low Pay Commission has recommended raising the minimum wage for the first time by six percent to over £12 an hour.

The advisory body also announced that it may recommend an even higher amount than £12.10 after the Labour Party changed its guidelines when it came to power to ensure a “real living wage”.

Business groups warned that higher wages would also jeopardise investment. Tom Ironside of the British Retail Consortium said: “Retailers strongly support the goal of higher wages and wage growth in the sector has outpaced that of the UK economy for eight of the last nine years.”

“However, as retailers face rising business costs, including rising business rates and fees, the combined impact of additional costs will increase pressure on businesses and limit their ability to invest.

“That is why it is so important that decisions on the national living wage take into account wider economic conditions and take a moderate approach to increases.”

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.