Mon 15 Aug 2022

UK Government response to employment status consultation

Four years after the consultation took place the response confirms there will be no legislative changes for now.

Employment status has been recognised as a complex and confusing area of law for some time with a number of tribunal and court cases over the past few years looking at whether someone was an employee, a worker or self-employed. This is something that was picked up on in the Taylor Review which recommended that the UK Government take a fresh look at the legislation with a view to making determination of employment status simpler and clearer, giving individuals and employers more information, a greater level of certainty and an understanding of which rights and responsibilities apply.  In response, a consultation was launched in 2018 which asked for views on, amongst other things, whether "worker" status should be retained and whether the tests for employment status for tax and employment rights should be aligned.

Four years later and the response from the UK Government is that the status quo will continue with no legislative response.

The UK Government have though announced new guidance for HR professionals, legal professionals and other groups; support for individuals and checklist for employers and other engagers.  The UK Government press release, somewhat optimistically, explains that businesses and workers, particularly those in the gig economy, will benefit from greater clarity on employment status as a result of this guidance. 

The guidance does contain useful information around the different statutory protections employees and workers have and the qualifying period (if any) required to qualify for those protections.  It makes clear to any individuals (who become aware of the guidance and take the time to read it) that their employment status is ultimately dictated by the reality of their working relationship with their employer (or engager) and not what is said in any statement of particulars or contract.  However, whether the fairly short guidance brings any greater clarity on employment status than is currently available remains to be seen.  The guidance for HR and legal professionals does contain more detail, but - it would be hoped - does not contain anything that someone holding themselves out as able to advise on this area of the law would not already be aware of. 

Simplifying and clarifying employment status was never going to be easy.  The UK Government explanation for not creating a new framework for employment status is that "it might create cost and uncertainty for businesses in the short term, at a time where they are focusing on recovering from the pandemic" and the risk of doing so outweighs the benefits.  Arguably the existing framework creates cost and uncertainty for businesses. That, combined with the UK Government acknowledgement that reform "could bring clarity in the long term", means that this might be looked at as being a missed opportunity.

Make an Enquiry

From our offices we serve the whole of Scotland, as well as clients around the world with interests in Scotland. Please complete the form below, and a member of our team will be in touch shortly.

Morton Fraser MacRoberts LLP will use the information you provide to contact you about your inquiry. The information is confidential. For more information on our privacy practices please see our Privacy Notice