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We want your views on government plans to reform employment status

2 November 20262 min read
News
We want your views on government plans to reform employment status

The Department for Business, Innovation, Science and Trade has published its long-awaited consultation on reforms to the employment status framework for employment rights. Launched on 14 October, it closes on 8 January 2027. The consultation sits within the government’s Plan to Make Work Pay and follows the Employment Rights Act 2025 and creation of the Fair Work Agency. 

Background 

In the UK, employment law recognises three categories: employee, limb (b) worker and self-employed, with each carrying different rights. The government’s view is that the current system lets some businesses misclassify workers as self-employed, particularly through tests related to personal service and broad substitution clauses that allow someone to send another person in their place. It is therefore seeking to make reforms that would bring more individuals who are self-employed because of a substitution clause within scope of limb (b) worker rights. 

What the consultation covers: 

  • Personal service: The government proposes to place less emphasis on personal service, so a right of substitution could not rule out worker status on its own. It seeks views on mechanisms including elevating the role of control in the status test, lowering the bar for what counts as personal service, or legislating so that a right of substitution is not the sole or overriding factor. It also asks whether the ability to set or negotiate pay should be a key factor distinguishing workers from the self-employed. 

  • Presumption of worker status: The consultation proposes a presumption of worker status in employment tribunals. In tribunal claims, the burden of proof would shift to engagers to demonstrate that someone is not a worker and not entitled to subsequent rights that are derived from that status. 

  • Compliance and enforcement: The consultation proposes treating repeated misclassification as an aggravating factor, such as where a tribunal has already determined the status of colleagues in broadly similar circumstances, opening non-compliant companies up to additional penalties. It also asks how the Fair Work Agency could use its civil proceedings powers to bring status cases on behalf of individuals, and whether a non-binding online self-assessment tool, akin to HMRC’s Check Employment Status for Tax service, would help. 

  • Self-employed protections: The government asks for evidence on a new right to a written statement, covering things like scope and payment terms, and the duration or value thresholds at which that rights should apply. It also asks about extending blacklisting and health and safety protections, including whether to extend the meaning of “worker” for these specific rights. 

The consultation applies to England, Wales and Scotland. It does not cover tax status, and the single worker status is now only referred to as a longer-term goal. The changes would need primary legislation. The government has also published an options assessment covering the key personal service and presumption measures, but has not set out a timeline for implementation. 

Who this affects 

The proposals have implications for businesses that engage people on a self-employed basis, as well as for self-employed individuals themselves. The government cites the gig economy throughout, and its assessment names the platform economy among the sectors most affected, but other businesses that use self-employed, freelance and contract talent are also in scope of these proposals. 

The government says it does not expect the presumption of worker status to have a substantial effect on either the genuinely self-employed or the businesses that engage them. However, alongside changes to the status test and stronger penalties, the reforms could shift how businesses approach engaging freelance and contract talent. 

Shape our response 

Flexible and on-demand work is important in the technology sector, from platform business models to the specialist skills businesses access for specific projects. techUK will be responding to the consultation and engaging government on this work, and our response will seek to ensure reforms do not compromise the legitimate use of self-employed, contract and freelance talent or the flexible working models that businesses and individuals value. 

If you are interested in shaping our submission, please get in touch.