This article examines the legal and economic effects of the Employment Rights Act 2025. It applies the Cambridge Centre for Business Research Labour Regulation Index (CBR-LRI), together with newly developed subindices, to measure the Act's effect on the strength of labour law protections in the UK, and to benchmark those changes against OECD countries. This legal analysis is combined with time-series analysis for the UK and panel-data analysis for selected OECD jurisdictions. The findings indicate that the Employment Rights Act produces only an incremental increase in the overall strength of labour law protections in the UK, although the subindices reveal more substantial changes in areas where the Act introduces new rights relating to zero-hours contracts, leave entitlements and trade union rights. The time-series analysis indicates that comparable reforms have historically been associated with small but positive increases in the UK employment rate, while the panel-data analysis identifies positive associations between stronger labour laws and higher employment, lower unemployment and higher productivity rates. Overall, this suggests that the strengthening of labour laws can yield positive economic effects.
Deakin et al. (Tue,) studied this question.