Employment status

Employment law has several mechanisms for determining whether or not an individual is eligible for any particular employment right.  The primary mechanism is the individual’s status.  While there are a variety of statuses under employment and related areas of law, the main ones in employment law are: employee, worker and self-employed independent contractor.  Employees have the full range of employment rights; workers have fewer rights although retain many of the most basic entitlements; and the truly self-employed, in business on their own account, are largely outside the scope of employment law.

There have long been calls for reform.  Both employer and employee representatives describe the law as overly complex, with its consequences difficult to predict.  Atypical workers – such as agency workers or those working under zero-hours contracts –find it particularly difficult to acquire rights due to the way the law applies to their circumstances. 

Successive governments have reviewed and consulted on the law around employment status.  None of the recent government reviews yielded any fundamental change.  All emphasised the need to balance individual rights with preserving labour market flexibility.  Most recently, the Prime Minister commissioned Matthew Taylor, the Chief Executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce, to lead an independent review of modern employment practices.  The Taylor Review reported on 11 July 2017.  The Government published its response on 7 February 2018, along with a consultation document on employment status.  The consultation closes on 1 June 2018.

The following provides an outline of the relevant law; sets out data on the growth in self-employment and atypical working; and discusses recent reviews, consultations and inquiries.