Recent high profile court cases involving Uber and Deliveroo have highlighted disputes over the employment status of gig economy workers. Employment status affects eligibility for employment rights, but without clear and consistent legislative definitions, it can be difficult to understand what atypical workers are entitled to.

In Great Britain there are broadly three types of employment status – employee, worker or self-employed – which determine what employment rights they are entitled to.

Employees receive the full set of employment rights, including parental leave, protections against unfair dismissal and redundancy pay. Workers who are not employees are entitled to the National Minimum Wage, annual leave and protections against discrimination, but overall receive fewer rights than employees. Self-employed people are excluded from almost all employment rights, except for some limited discrimination and health and safety protections.

Legal tests for employment status

How employment statuses are defined varies across different pieces of legislation. They also differ from how employment status is defined for tax purposes, where only two statuses (employed and self-employed) exist.

The legal tests depend heavily on case law rather than being set out in statute. Three of the most important tests relied on by the courts have been:

  • the employer’s degree of control over the person
  • whether there is ‘mutuality of obligation’, where the employer is obliged to provide work and the worker is obliged to perform it
  • the test of personal service – whether the person is free to send a substitute to do the work in their place

Confusion and disputes have arisen over the employment status of certain groups. There have been several proposals for reform of the law in this area over the past two parliaments, as well as high-profile court rulings.

Atypical workers

As noted by Advisory, Conciliation and Arbitration Service (Acas) guidance, the employment status of atypical workers can be difficult to work out. This can make it unclear to some, such as those on zero-hours contracts or working in the ‘gig economy’, whether they qualify for certain employment rights.

Zero-hours contracts

People working on zero-hours contracts face two difficulties in qualifying for employment rights.

First, demonstrating the mutuality of obligation needed to qualify for employee status could be difficult in cases where the employer has no obligation to provide working hours and the worker has no obligation to accept. However, as noted by law firm Warner Goodman, tribunals have found that if work is regular enough in practice, this test can still be met.

Second, those on zero-hours contracts may find it difficult to build up enough continuity of service to qualify for certain rights, such as unfair dismissal, if there are breaks in their service of a week or more when they do not receive any work.

Agency workers

Agency workers can be difficult to classify because the role typically performed by a single employer is split between two organisations: the agency, which pays them for their work, and the end client, who receives the benefits of their work and instructs them on a day-to-day basis.

Agency workers can have different statuses depending on their contracts and how their arrangements work in practice. However, as noted by law firm Lewis Silkin, they are usually a worker or employee of the agency rather than the end client.

Gig economy workers

Workers in the ‘gig economy’ provide their services to end customers through online platforms, often on a task-by-task basis. This includes companies such as Uber, Deliveroo or Taskrabbit.

These companies have often maintained that they do not act as employers at all – that they provide services to independent contractors who are self-employed. However, this has been disputed in several high-profile legal cases. These include cases over individual rights, (see example 1) but also over collective rights and the application of trade union law (see example 2). Different circumstances in each case has led to different outcomes.

1 Uber BV v Aslam


On 19 February 2021, the Supreme Court gave a landmark judgment in Uber BV v Aslam. The court ruled that the drivers who brought the case were not self-employed contractors but in fact workers for Uber and therefore entitled to certain employment rights such as the National Minimum Wage.


The judgment was partly based on the degree of control Uber exercised over its drivers. The ruling was significant in how it said courts should determine worker status: not by looking at the wording of the contract, but by the reality of how the arrangements worked on the ground.


2 Independent Workers Union of Great Britain v Central Arbitration Committee


The 2023 case of Independent Workers Union of Great Britain v Central Arbitration Committee concerned couriers for Deliveroo. The Supreme Court found in this case that Deliveroo couriers were not workers for the purpose of collective bargaining and trade union law. This was largely because of their unlimited right to substitution (to send someone to do the work in their place), along with a range of other relevant factors.

Proposals for legislative reform in previous parliaments

The Taylor Review

On 1 October 2016, then Prime Minister Theresa May commissioned Matthew Taylor to conduct a review of how employment law interacts with new forms of work, such as digital platforms and the gig economy. The report, titled Good Work: The Taylor Review of Modern Working Practices, was published on 11 July 2017.

The report recommended various amendments to employment law, alongside strengthening enforcement and guidance. In particular, it recommended putting the tests for employment status, currently found in case law, into legislation.

It also recommended renaming workers who are not employees as ‘dependent contractors’ to provide a clearer distinction and placing a greater emphasis on the test of control rather than on the requirement to perform work personally.

The report recommended harmonising the definitions for employment law and tax law, so that all employees and dependent contractors would be treated as ‘employed’ for tax purposes, as well as reversing the burden of proof so it was presumed people were entitled to rights unless employers could prove they weren’t.

Responses

The government published a response to the Taylor Review in February 2018, launching four consultations in areas of employment law, including one on employment status. In the Good Work Plan, published in December 2018, the government said it would legislate to clarify the employment status tests.

However, in 2022 in its response to its consultation, the government decided not to pass new legislation in this area, but instead published new non-statutory guidance for employers.

Further reading


Author: Patrick Briône

    The economy and finance

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