Deputy Prime Minister Angela Rayner has been warned that her workers’ rights overhaul could lead to a number of people losing their jobs.

The Labour Government’s policy will see sick workers claim sick pay from the first day of their illness rather than the fourth.

More staff will also be eligible for statutory sick pay. Under current rules, workers need to earn at least £123 a week to qualify.

But this threshold could soon be removed.

But Shazia Ejaz at the Recruitment and Employment Confederation believes that this will add further costs to businesses with 60% of new statutory sick pay already being paid by employers.

She warned: “Small businesses, which make up a significant portion of the market, would bear a disproportionate cost burden, with 60% of new statutory sick pay (SSP) costs falling on them.

“We urge the Government to set the rate of SSP at a level that encourages employers to retain staff, rather than having to move swiftly to capability-based dismissal.”

Ms Rayner’s reforms also include restrictions for zero-hours contracts and a clamp down on ‘fire and rehire’.

The Deputy Prime Minister has said the reforms are “the biggest upgrade to rights at work for a generation, boosting pay and productivity with employment laws fit for a modern economy”.

A spokesman for the Department for Work and Pensions added: “No one should be forced to choose between their health and financial hardship, which is why we have consulted on plans to strengthen statutory sick pay and make sure everyone is entitled from the first day they are sick, regardless of earnings.

“That consultation closed this week and we’ll be considering responses at pace. These reforms as part of the employment rights Bill will support people managing a health condition to stay in work and raise living standards across the country.”

Earlier this week, some of the country’s biggest recruiters said the reforms will damage the economy.

They wrote to Jonathan Reynolds, the Business Secretary, saying: “Growth is the Government’s priority … Yet the approach taken in the current consultation delivers the opposite of this.

“If applied, it would undermine both the temporary and permanent jobs markets, slowing job search by reducing opportunities and potentially exposing workers to poorer treatment and false self-employment.”