The long-awaited consultation on reforming employment status is finally out. The current three categories of employment status will stay put, but more people will be brought into worker status, with some limited additional rights for the self-employed.
UK employment law recognises three main categories: employees, workers and self-employed independent contractors. Employees benefit from the broadest range of rights, including protection against unfair dismissal and rights to family leave and pay. Workers have a narrower set of protections, including holiday pay and the national minimum wage. Self-employed independent contractors may have limited protection against discrimination and detriment for whistleblowing but generally do not benefit from employment rights. In the event of a claim, it is up to employment tribunals and courts to rule on someone’s status, relying on caselaw tests that have evolved over the years.
For tax purposes, the position is binary: individuals are either employed or self-employed. There is no intermediate ‘worker’ category.
The Labour Party has long argued that ambiguity within the current model has fuelled “bogus self-employment” with some individuals classified as self-employed independent contractors when they should instead be treated as workers. Its original manifesto commitment was to replace the three-category system with a simpler framework comprising only workers and the self-employed.
However, the absence of anything about worker...
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