This discussion encouraged participants to share reflections and experiences of the relationship between employment rights and economic growth/productivity, and the role of enforcement.
Participants reflected that the rapidly evolving labour market poses opportunities and challenges and that given the fast pace of change,policymakers need to be proactive to both seize new opportunities and to address current and future labour market challenges, to enable long-term economic growth. In the UK context, the Employment Rights Act 2025 and the broader Plan to Make Work Pay were cited as examples of being proactive, as the UK government was updating the employment rights framework to strengthen employment rights and better align it to a modern economy.
Employment protections and economic growth can be mutually reinforcing. This dynamic underpins a pro innovation, pro worker response to the changing nature of work. There was consensus that stronger employment rights, with more secure, fairer work, leads to people staying in work for longer. This would allow businesses to benefit from their experience, skills and leadership over time, and higher levels of productivity – and therefore supporting economic growth. Notably, for economic growth to be inclusive, productivity gains and economic benefits – such as higher incomes, more jobs and greater living standards – need to be distributed fairly across our societies.
Recommendations
Research has shown that improving employment rights can increase economic growth[1]. For example, maternity protections allow women to stay in the workforce, Statutory Sick Pay boosts individual welfare and productivity, and guaranteed hours help minimise uncertainty.
Increased productivity of workers gained through stronger employment rights can be a key driver of long-term growth. Further productivity improvements discussed included utilising the benefits that artificial intelligence can bring to the nature of work. Discussion recognised that AI could increase productivity by automating burdensome tasks, which has the potential to free up more time and space for workers to use their own critical thinking and judgement, and to be more creative. AI can also increase productivity through the creation of new jobs (despite its potential to negatively impact and displace other jobs across the labour market). However, as with employment growth, there is a challenge to ensure productivity gains from AI are fairly distributed. Theme 4 gives a detailed overview of the discussions on AI.
Other policy suggestions for increasing productivity and economic growth include:
- Creating a tangible structure for worker engagement so that workers are involved in discussions with their employers on how to respond to the changing nature of work. This is especially necessary in countries with low trade union membership;
- Designing and implementing a crisis management mechanism to respond to un/expected labour market shocks. Inspiration can be taken from Covid-19 crisis management;
- Increased government and employer investment in workforce upskilling, and in quality jobs; and
- Exploring increasing worker flexibility which participants suggested could lead to more efficient work, better work-life balance, reduced burn out and sickness, and higher staff retention.
Enforcement plays a crucial role in upholding employment rights, preventing exploitation, and ensuring fair competition between businesses. However, it is important that enforcement mechanisms are designed in a way that encourage and incentivise businesses to comply rather than relying on enforcement, such as through employment tribunals, which can be disproportionately costly for small and medium sized businesses. In the UK context, HMRC’s enforcement of the national minimum wage was shared as a strong positive case study of effective enforcement. The new UK Fair Work Agency launched on 7 April 2026 as a single enforcement body for employment rights, was also highlighted.
There is no-one-size-fits-all way to responding to the changes in the labour market, in the same way that there is no single labour market. Policy interventions should consider the differences across labour markets, including geographic disparities, sectors, sizes of business, and demographics. A combination of interventions, which take account of these nuances, is required. This will also help to reduce unintended consequences e.g., where regulation does not necessarily strengthen secure employment and instead pushes people into platform work because they seek flexibility.
The key to intervention design is to develop these in partnership with businesses, trade unions and civil society organisations. Social dialogue plays an important role in facilitating this. In the context of Spain, sector-level collective agreements are an effective model of tripartite working through national framework agreements.
[1] Christine Carter, Simon Deakin and Kamelia Pourkermani (University of Cambridge), Conor McCormack (Department for Business and Trade), Assessing the legal and economic implications of the Employment Rights Act 2025, 7 January 2026. Link: https://assets.publishing.service.gov.uk/media/695e23e88832ab3a48513801/assessing-the-legal-and-economic-implications-of-the-employment-rights-act-2025.pdf