Employers have told Tony Blair that the code of practice which accompanies the Employment Relations Bill would place unacceptable burdens on business.
The Bill gives employees the right to be accompanied by a trade union official at disciplinary hearings, where such a mechanism exists.
Controversially, the code will advise employment tribunals to take a dim view of companies that fail to establish such procedures.
Business leaders, including Rupert Murdoch, have registered deep misgivings about the whole initiative, which they believe will strangle industry in red tape. They contend that it will be far more difficult to get rid of troublemakers and employees who are simply incompetent.
Business representatives, however, have failed to dilute a clause that stops employers dismissing strikers for the first eight weeks of industrial action. Companies wanted the period reduced to four weeks, but Ian McCartney, Trade Minister, successfully resisted the intervention.
Mr McCartney argued that ministers should not try to re-open negotiations on the proposals, which led to conflict inside the Government and damaged relations with trade unions.
Employees' representatives have warned that the unions' continued financial support of the Labour Party was being put in jeopardy.
Meanwhile, the Low Pay Commission may be asked to reconsider the amount allowed for tied accommodation where an employee is paid the national minimum wage of pounds 3.60 per hour, introduced last Thursday.
Employers believe that pounds 20.00 per week for housing is too little, although the Commission has so far resisted attempts to increase it.
Mr Blair is also keen to alter the way in which the European working time directive has been implemented. Businesses have been critical of the requirement to keep detailed time records of staff who have agreed to work more than 48 hours per week.
The Prime Minister has become increasingly persuaded that the combination of European employment law and home-grown legislation on union recognition may be difficult for businesses to cope with. Downing Street is also conscious that New Labour's business-friendly image may be tarnished.
Acting through Lord Falconer, a Cabinet Office minister, Mr Blair has sought amendments to the Employment Relations Bill as it passes through Parliament.Reuse content