Government issues new guidance on employment status

The government has on Wednesday issued a new guidance that it said will act as one-stop-shop for individuals and businesses to understand which employment rights apply to them.

Gig economy workers are set to benefit the most, as the guidance will enable them to check their workplace is treating them fairly, the government noted.

A person’s employment status is what defines the rights and employment protections they are entitled to at work including pay, leave and working conditions, and therefore dictates the responsibilities that an employer owes to that worker.

“Today we are tidying up the rules, helping workers understand their employment rights and find out if they are being treated fairly by their workplace,” Business Minister Jane Hunt said. “Importantly, this one-stop shop guidance is not just for workers – it will also give businesses the confidence and the tools to better support their staff, helping to increase productivity and drive growth.”

The new guidance brings together employment status case law into one place for businesses and individuals to access. Significantly, it also clarifies the rights that gig economy workers are entitled to – from the national minimum wage to paid leave – while offering them the same degree of flexibility to take on additional work to top up their income, if they choose.

The development follows the landmark Uber Supreme Court judgement which held that individuals in the gig economy can qualify as ‘workers’, meaning they are entitled to core employment protections.

The new guidance includes advice for micro businesses, start-ups and SMEs that have less capacity and legal expertise to understand the law. By reducing the risk of companies being fined by rules they have broken unknowingly, it will inject confidence into businesses to support their staff and stimulate economic growth, the business department said.

The guidance features real world examples of what an individual’s working day or contract may involve and how that translates into their employment status.

The guidance is being published alongside a response to a consultation on employment status, where many respondents called for additional clarity around the employment status boundaries and examples of how to apply the rules to different scenarios.

While the UK’s ‘3-tiered’ employment status framework – broken down by employee, worker and those that are self-employed – is intended to create a flexible and dynamic labour market, the system has nevertheless led to some individuals not understanding their employment status, the consultation has found.