Will Labour Really Abolish Workers Status?

There are currently, I would argue, four key statuses for people in work (excluding volunteers and officer holders):

1. Employee.
2. Worker.
3. Genuinely self-employed - running their own business.
4. People who have set up a personal service company, the company then contracts to provide a service to (often a small) number of businesses, but in reality, the work is done by that person e.g. Joe Bloggs Ltd is the party to the agreement but Joe Bloggs does all the work.

In basic terms, the usual ‘legal’ characteristics of an employee are:

• Have some or all set hours.
• Must attend and undertake work personally.
• Equipment to do the work is provided by the employer.
• Tax and NI paid by the employer.
• Paid holiday is taken.

The law gives the greatest rights and protections to employees e.g. redundancy, unfair dismissal, TUPE transfer rights etc. plus holiday pay, SSP.

The law gives very few rights to the genuinely self-employed.

A worker is someone who is:

• not employed;
• but is also not genuinely self-employed either.

Uber drivers are a good example of a worker. A worker has some rights e.g. to statutory sick pay and holiday pay, rights to bring discrimination claims etc.

The Government appears to be proposing to abolish the worker status

It wishes to “simplify” the law.

But if it abolishes worker status, we will be left with self-employed or employee.

Many self-employed are legally workers, that would mean they would become employees, then meaning they may be treated differently via PAYE.

Also, what happens to all the agency workers, they are by in large all workers, not employees?

Labour pledged not to increase tax and NI for “working people” and more recently stressed people will not see any effect in their “pay packet”.

If Labour go ahead with this, will we see more self-employed status, thus, reducing the rights of what were many workers? If they become self-employed, then their rights will reduce significantly.

Does the Labour Party really intend to reduce the rights of working people?

Apparently, the Government has embarked on a consultation – due to last till 2026.

My prediction

They will realise it is not as simple as they may now think to “simplify” the law.

They will realise the unintended consequences.

It will be put into the ‘too difficult to do anything’ draw.

So, no change in the law for at least two years and probably longer!

Book A Free chat with Shaun Pinchbeck, Senior Employment Law Solicitor

Status can be a complex and very significant issue. It can be a big problem if a business gets it wrong and now is the time to take a look at the issue if you engage self-employed people or workers.

I can help determine the correct status of your staff. I have been advising on these issues for over 30 years and offer a free-of-charge, informal chat with no commitment. Simply email me to arrange: enquiries@bridgeehr.co.uk.