The report for the UK Department of Business and Trade, entitled Assessing the legal and economic implications of the Employment Rights Act 2025, is co-authored by Christine Carter of the Faculty of Law at the University of Cambridge and a CBR researcher, Professor Simon Deakin of the Faculty of Law and Director of the CBR, Conor McCormack of the Department of Business and Trade, and Kamelia Pourkermani, Research Fellow at the University of Cambridge and a CBR researcher.
The CBR Labour Regulation Index, led by Professor Deakin, is used in the report to benchmark the new rights conferred by the Act against other OECD countries. The Index provides a measure of the extent of worker protection in law in 117 countries around the world between the 1970s to the present day.
UK is still less protective than the OECD overall, but leads in some areas
The report finds that despite improvements under the new law, which took effect on 18 December 2025, the UK would remain less protective than the OECD average overall. However, it would be a leader in some areas. For example, UK labour law would be at or above the average level of protection in the OECD with respect to zero-hours contracts, leave rights and certain aspects of trade union rights.
The report also uses the Labour Regulation Index to conduct econometric analysis of the relationship between labour law and the economy over the past 50 years in the UK. This indicates that the new Employment Rights Act is likely to have a small positive effect on employment, representing an increase of around 0.1% in the employment level.
Employment Rights Act is central to a new package of reforms
The report says that the Employment Rights Act plays a key role in the UK government’s Plan to Make Work Pay, a package of reforms that will “upgrade the UK’s employment rights framework, ensuring it is fit for a modern economy, empower working people and contribute to economic growth”. These reforms include greater protection against unfair dismissal and sexual harassment, strengthening statutory sick pay, and ending exploitative zero-hours contracts.
Featured research
Carter, C., Deakin, S., McCormack, C. and Pourkermani, K. (2026) Assessing the legal and economic implications of the Employment Rights Act 2025. Department for Business and Trade.
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