Cambridge researchers coauthor government report on new Employment Rights Act

Legal protection for UK workers will move closer to the OECD average, according to a new report coauthored by a team of Cambridge researchers, and published last week by the Department of Business and Trade.

'Assessing the legal and economic implications of the Employment Rights Act 2025' is co-authored by Christine Carter, Simon Deakin, and Kamelia Pourkermani of the Cambridge Centre for Business Research and ESRC Centre for Digital Futures at Work, together with Conor McCormack of DBT.

The report uses the Cambridge Centre for Business Research Labour Regulation Index to benchmark the new rights conferred by the Act against those in 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 and the present day.

For the purposes of the report, the Cambridge team updated the Index to 2025 for the UK and other OECD countries, and added new indices on zero hours contracts, leave rights and trade union rights, in order to capture the changes made by the Act.

Benchmarking UK employment rights against the OECD

The report finds that, as a result of the Act, UK labour law protections, as whole, would move closer to the OECD average.

Whilst the UK would remain less protective than the OECD average overall, 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 those aspects of trade union rights addressed in the Act.

Economic impacts

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.

In those areas where the Act breaks new ground for UK law, including zero hours contract laws, analysis indicates that the adoption of similar laws in other OECD countries in the recent past has led to productivity and employment improvements.