Why Worker Status Matters: Understanding Employment Rights In The Uk

Abstract

In today’s evolving labour market, shaped by the rise of remote, hybrid, and gig-based work,  understanding employment status is critical to accessing statutory rights under UK law. This paper  explores the three recognised employment statuses, the factors that courts have been known to consider  and the legal tests used to determine each. Through case studies of cases like Pimlico Plumbers v  Smith, Autoclenz v Belcher, Uber v Aslam, and Deliveroo, it becomes evident that courts now prioritise  the practical reality of work over contractual labels. 

The rise in exploitative contracts and the lack of clear rights for gig economy workers has prompted  calls for legislative reform, including proposals for an Employment Rights Bill aimed at improving  working conditions, particularly for those in insecure or non-traditional forms of employment. While  most rights remain tied to employment status, the proposed changes seek to expand protections for  vulnerable workers across different categories. By recognising the complexity of modern employment  and ensuring legal protections match working realities, the UK seeks to foster a fairer, more secure  working environment. This paper highlights the importance of individuals knowing their employment  status and staying informed of legal developments to safeguard their rights in the workplace.

Introduction

With the rise in remote jobs and hybrid contracts, it becomes essential to identify your worker status as this helps one identify the rights owed to them under the Employment Rights Act 1996. There are  three possible employment status that could apply to someone in the workforce in the United Kingdom  (UK). These are Employee, Worker or an Independent Contractor.¹

Employees enjoy the broadest range of rights, including protection from unfair dismissal (after a  qualifying period), redundancy pay, statutory sick pay, maternity and paternity leave, protection under  the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), and rights to  notice periods and disciplinary procedures.² Workers have fewer rights than employees, but are still  entitled to the National Minimum Wage, holiday pay, protection against unlawful deduction from  wages, and working time protections. However, they generally do not have rights such as unfair dismissal protection or redundancy pay. Independent Contractors (or the self-employed) are generally  not entitled to statutory employment rights. Their rights and obligations are typically governed by the  terms of a contract for services. They are responsible for their own tax and national insurance, and are  not protected by most employment legislation.³

Therefore, in an evolving labour market shaped by remote and hybrid work, understanding your  employment status, whether as an employee, worker, or independent contractor, is critical, as it directly  determines the scope of your legal rights, protections, and obligations under UK employment law.

The Current Legal Landscape

There are three established tests that have been relied on to determine an individual’s employment  status:

1. Control Test

This test looks at how much control the employer has over how, when, and where the worker  performs their duties. For example, if an employer requires the worker to work set hours, wear a  uniform, follow detailed instructions, and submit to disciplinary rules, this points toward employee  status. A delivery driver who must adhere strictly to assigned routes, schedules, and company  policies is an example where a high degree of control is evident. However, this test is no longer  decisive on its own because some workers may have flexibility yet still be employees.⁴

2. Integration Test

This test examines how integrated the individual is within the employer’s organisation. For  example, a software developer who initially worked as an external contractor but over time became  involved in regular staff meetings, received internal communications, and used company resources  daily may be considered an employee under this test. Conversely, a freelance graphic designer  hired for one-off projects without ongoing involvement is likely not considered integrated. This  test helps identify workers who, while not formally employees, functionally behave like one.⁵

3. Mixed Factor Test

This approach was set out in the landmark case Ready Mixed Concrete (South East) Ltd v Minister  of Pensions and National Insurance. It looks at three main factors: whether the employer has an  obligation to pay the individual; whether the employer exercises a sufficient degree of control; and  (3) other relevant factors consistent with a contract of service. One critical aspect is the presence  of mutual obligations, the employer’s obligation to provide work and pay, and the worker’s  obligation to perform the work.⁶ For instance, in Cornwall County Council v Prater,⁷the court  found that a casual worker who was obliged to accept work offered and was paid for it had mutual  obligations indicative of employment. However, a truly independent contractor who can accept or  refuse work without penalty would not meet this test.⁸

Unfortunately, some employers have attempted to avoid statutory obligations by drafting employment  contracts that misrepresent a person’s employment status, often labelling them as “independent  contractors” or “workers” when the reality of the relationship indicates otherwise. This practice has  led the courts to adopt a more substance-over-form approach,⁹looking beyond the written terms of the  contract to assess the true nature of the working relationship.

One example of such contractual manipulation is the inclusion of sham delegation clauses that purport to allow the individual to send a substitute to perform their duties, even when such substitution is  neither practical nor permitted in reality. These tactics have been viewed as deceptive tactics by  employer’s to evade statutory obligations.

In Pimlico Plumbers Ltd v Smith,¹⁰ the UK Supreme Court affirmed that labels used in a contract are  not determinative of employment status. Instead, the court will examine the factual working  relationship. Mr. Smith, although labelled an “independent contractor,” was found to be a worker.

Key  factors supporting this finding included:¹¹

• A requirement to perform the work personally, with no genuine right of substitution;
• Significant control exercised by Pimlico, including branded uniforms, specified working hours, and strict operating procedures;
• Mr. Smith’s economic reality where he depended on work from Pimlico, with no real freedom to work for other clients or run an independent business.

Similarly, in Autoclenz Ltd v Belcher, the Supreme Court reinforced the substance-over-form principle,  holding that tribunals must examine the actual conduct of the parties. Even where a written contract  suggests self-employment, the courts may find employee or worker status if the practical reality  suggests otherwise.¹²

These cases demonstrate that the courts are increasingly willing to overlook contractual terms in  certain cases to prevent the exploitation of workers and ensure that employment rights are not  circumvented through artificial legal constructs. In the landmark case of Uber BV v Aslam,¹³ Uber  drivers argued they were entitled to worker rights under UK employment law, despite being labelled  as independent contractors. The court found that although the contractual terms described the drivers  as self-employed, the reality painted a different picture. Uber exercised significant control over the  drivers from setting fares to giving them clients and dictating routes to penalising them for rejecting  trips. The drivers had little control over their work and were economically dependent on Uber.¹⁴ The  Supreme Court held that they were in fact “workers” and thus entitled to protections such as national  minimum wage and paid holiday.¹⁵ This monumental judgment reinforced the idea that labels in a  contract cannot override the true nature of the working relationship, especially where there is a clear  imbalance of power.

On the other hand, the Deliveroo case reached a contrasting outcome. Deliveroo riders who were represented by the International Workers’ Union of Great Britain union in a claim that argued that they  were also “workers” and should have the right to unionise and bargain collectively.¹⁶ However, the  Court of Appeal ruled that they were not workers, primarily because of their genuine right to  substitution. Riders could freely appoint someone else to carry out their deliveries, and this practice  was operational in reality not just on paper. This meant that the requirement for personal service, which  is a fundamental component of worker status, was missing. As such, the riders were found to be  independent contractors, with fewer rights under employment law.

These cases demonstrate that even within the gig economy, each employment status assessment is fact specific. While both Uber drivers and Deliveroo riders were engaged via digital platforms, the level of  control, obligation to perform work personally, and economic dependency varied significantly between  the two roles. Even though there is no fixed list for factors to be considered for employment status  determination, the Deliveroo and Uber cases highlight some of the facts that can be considered. For  workers, if personal service is no a requirement, then they are likely to be seen as an independent  contractor. Degree of control, personal service and mutuality of obligations are some of the factors that  the courts will look at to make a determination of whether the contract genuinely represents the actual  reality.

Proposed Changes  

With the rise of insecure contracts, flexible labour models, and new working arrangements it  emphasizes the need to be able to know your employment status to be able to claim for your statutory  rights and make work an enjoyable endeavour. The classification of gig economy workers as either  ‘workers’ or self-employed contractors remains a contentious issue with significant legal and social  implications. The European Court of Justice (ECJ) recently addressed this in the case involving a Yodel courier, emphasizing the importance of assessing the reality of the working relationship rather than  simply relying on contractual labels. As Leckey explains, the ECJ highlighted key factors such as the  right to provide substitutes, freedom to accept or reject tasks, and the ability to work for multiple  companies as indicators pointing towards self-employment, provided that this independence is genuine  and not merely nominal.¹⁷

The Employment Rights Bill has been proposed to modernise and strengthen protections for  individuals across the workforce.¹⁸ One key reform proposed under the Bill is the restriction of  exploitative zero-hours contracts.¹⁹ If the proposed provisions are passed, workers will gain the right to guaranteed hours, reasonable notice of shifts, and compensation in the event of last-minute  cancellations. These changes aim to protect vulnerable individuals, including agency workers, from  erratic income patterns and unpredictable scheduling that have characterised many low-hours and gig based roles.²⁰

As more people shift toward remote or hybrid working models, the Bill aims to bring clarity to modern  workplace dynamics. Employers will need to continue meeting their health and safety duties toward  staff working from home, including mental health considerations. Monitoring practices must remain  proportionate and not breach the implied term of mutual trust and confidence. Another proposed  provision focuses on the right to union access and proposing that remote and hybrid workers are not  excluded from collective representation or awareness of their employment rights.

The gig economy, which now accounts for an increasing portion of UK labour, remains an area of  major concern. While such work offers flexibility, it often comes at the cost of basic rights. Many  individuals are not classified as “workers” under UK law because platforms argue there is no obligation  for personal service, no dependence on a single client, and that individuals maintain autonomy by  choosing when and where to work. These issues have prompted calls for reform, with organisations  such as the Institute for the Future of Work and the Social Market Foundation recommending a  presumption of worker status unless proven otherwise.²¹ If implemented, this would grant many  platform-based workers’ rights to holiday pay, the national minimum wage, and protections from  unlawful deductions. Recent estimates show that gig economy workers make up approximately 1.4%  of the UK labour force, highlighting its relatively small but significant footprint in the labour market.²²

Finally, a proposed agency whose focus will be on enforcement and oversight of the bill would be  significantly bolstered implementation and extend enforcement powers.²³ The proposed agency will  oversee compliance with holiday pay, national minimum wage, agency worker protections, and  broader labour standards.²⁴ Employment Tribunal time limits will be extended from three to six months to ensure access to justice, and umbrella companies, often used to circumvent employer obligations,  will be brought under regulation.²⁵

Consultations are ongoing and although the Bill may be considered broad and ambitious, it has a clear  purpose which is to build a labour market that is both fair and fit for a modern economy.

Conclusion

It is immensely important for all members of the workforce to know their employment status in order  to know what statutory obligations are available to them. The existence of contractual shams and any  other deceptive techniques that might be used by employers to avoid fulfilling their obligations is a  tactic that has been recognized by the courts and measures are in place to make sure all parties are  protected.

In a time where the focus is achieving a work and life balance, knowing what is owed to you and being  able to ask for it is a resource available to all because of the government’s interest in doing right by its  people through tools such as the Employment Rights Bill. Precedence cases like the Uber case give  hope to people in the gig economy to know that they too have access to paid leave and national  minimum wage among other significant benefits.

In conclusion, knowing your employment status and staying up to date on the changes in the  employment sector help to protect everyone in the workforce and provide amicable working  environments for everyone.

REFERENCE(S):

Blake Morgan LLP, ‘Employment Rights Bill: Key Reforms at a Glance’ (Blake Morgan Insights, 5  June 2025) https://info.blakemorgan.co.uk/employment-rights-bill-overview accessed 15 August 2025

Cockett J, ‘The True Story of the UK Gig Economy’ (CIPD, 12 October 2023)  https://www.cipd.co.uk/knowledge/fundamentals/emp-law/rights/gig-economy accessed 15 August  2025

House of Commons Library, Employment Rights Bill 2024–2026: Policy Overview and Legislative  History (Research Briefing, 2025) https://commonslibrary.parliament.uk/research-briefings/cbp 10109 accessed 15 August 2025

Independent Workers Union of Great Britain v Central Arbitration Committee [2023] UKSC 43  (Press Summary, 21 November 2023) 

https://supremecourt.uk/uploads/uksc_2021_0155_press_summary_fbbf3d3937.pdf accessed 15  August 2025

Institute for the Future of Work, ‘Presumption of Worker Status in the Gig Economy’ (2023)  https://www.ifow.org/presumption-of-worker-status accessed 15 August 2025

Leckey C, ‘2020/43 ECJ Clarifies “Worker” Status under EU Law in Gig Economy Ruling (UK)’  (2020) 2020 European Employment Law Cases 210

Smith I and Baker A, “Smith and Wood’s Employment Law” (16th edn, Oxford University Press 2021)

Social Market Foundation, ‘Reforming Employment Status: A New Approach’ (2023)  https://www.smf.co.uk/reforming-employment-status accessed 15 August 2025

Smith I and Baker A, “Smith and Wood’s Employment Law” (16th edn, Oxford University Press 2021)

UK Parliament, ‘Employment Rights Bill concludes Lords committee stage’ (8 May 2025)  https://www.parliament.uk/business/news/2025/april/employment-rights-bill-committee stage/?utm_source=chatgpt.com accessed 15 August 2025

¹Ian Smith and Aaron Baker, “Smith and Wood’s Employment Law” (16th edn, Oxford University Press  2021).

²Ibid.

³Ibid.

⁴Ibid.

⁵Ibid.

⁶Ibid.

⁷ Cornwall County Council v Prater [2006] EWCA Civ 102.

⁸Ian Smith and Aaron Baker, “Smith and Wood’s Employment Law” (16th edn, Oxford University Press  2021).

⁹ Autoclenz Ltd v Belcher [2011] UKSC 41.

¹⁰ Pimlico Plumbers Ltd v Smith [2018] UKSC 29.

¹¹ Ibid.

¹² Autoclenz Ltd v Belcher [2011] UKSC 41.

¹³ Uber BV v Aslam [2018] EWCA Civ 2748.

¹⁴ Ibid.

¹⁵ Ibid.

¹⁶ Independent Workers Union of Great Britain v Roofoods Ltd (Deliveroo) [2023] UKSC 43; Independent  Workers Union of Great Britain v Central Arbitration Committee [2023] UKSC 43 (Press Summary, 21  November 2023) https://supremecourt.uk/uploads/uksc_2021_0155_press_summary_fbbf3d3937.pdf accessed  15 August 2025.

¹⁷ Colin Leckey, ‘2020/43 ECJ Clarifies “Worker” Status under EU Law in Gig Economy Ruling (UK)’ (2020)  2020 European Employment Law Cases 210.

¹⁸ House of Commons Library, Employment Rights Bill 2024–2026: Policy Overview and Legislative History (Research Briefing, 2025) https://commonslibrary.parliament.uk/research-briefings/cbp-10109 accessed 15  August 2025.

¹⁹ House of Commons Library, Employment Rights Bill 2024–2026: Policy Overview and Legislative History (Research Briefing, 2025) https://commonslibrary.parliament.uk/research-briefings/cbp-10109 accessed 15  August 2025; HL Deb 29 April 2025, vol 839, col 404 https://hansard.parliament.uk/Lords/2025-04- 29/debates/E1E9EAE1-F475-43D3-91F4-D3094C4650F8/EmploymentRightsBill accessed 15 August 2025;  Blake Morgan LLP, ‘Employment Rights Bill: Key Reforms at a Glance’ (Blake Morgan Insights, 5 June  2025) https://info.blakemorgan.co.uk/employment-rights-bill-overview accessed 15 August 2025.

²⁰ Ibid.

²¹ Institute for the Future of Work, ‘Presumption of Worker Status in the Gig Economy’ (2023)  https://www.ifow.org/presumption-of-worker-status accessed 15 August 2025; Social Market Foundation,  ‘Reforming Employment Status: A New Approach’ (2023) https://www.smf.co.uk/reforming-employment status accessed 15 August 2025. 

²² James Cockett, ‘The True Story of the UK Gig Economy’ (CIPD, 12 October 2023)  https://www.cipd.org/uk/views-and-insights/thought-leadership/cipd-voice/uk-gig-economy/ accessed 15  August 2025.

²³ UK Parliament, ‘Employment Rights Bill concludes Lords committee stage’ (25 June 2025)  https://www.parliament.uk/business/news/2025/april/employment-rights-bill-committee stage/?utm_source=chatgpt.com accessed 15 August 2025.

²⁴ Ibid.

²⁵ House of Commons Library, Employment Rights Bill 2024–2026: Policy Overview and Legislative History (Research Briefing, 2025) https://commonslibrary.parliament.uk/research-briefings/cbp-10109 accessed 15  August 2025.