Government publish response on Employment Status consultation

26 July 2022


  • Government has published its response to the employment status consultation which ran from 7 February 2018 to 1 June 2018
  • Government has also published employment status guidance for employment rights
  • Further consultations were opened as a result of Government’s original response to the Matthew Taylor review into Employment Practices in the Modern Economy
  • A summary of the Government’s response is as follows;
    • There are two tax statuses (employed and self-employed) and three statuses for employment rights which are self-employed, limb (b) worker and employee
    • A large number of respondents to the consultation were supportive of employment status reform but there was no overall consensus on what action Government should take
    • The Covid pandemic has severely impacted the labour market and so research conducted by Government in 2018 to better understand the worker population is now far less accurate in respect of the labour market in 2022
    • The benefits of creating a new framework for employment status is currently outweighed by the risk associated with legislative reform
    • Government also questions how an employment status test could be drafted which doesn’t unduly limit the ability of the courts to rule against “unscrupulous employers engineering employment relationships that circumvent the law”
    • The Uber Supreme Court judgement provided more clarity by confirming that when determining an individual’s employment status an employer should take into account the legislation’s intention of protecting vulnerable workers as a starting point rather than the written contract
    • Government does want to increase transparency for individuals on their employment status and their rights whilst providing further clarity to employers and what their rights/responsibilities are
    • Government is updating its guidance on “Calculating the Minimum Wage” to provide greater clarity on the interpretation of “working time” for minimum wage purposes
    • Government is also addressing delays in the Employment Tribunal System to provide quicker resolutions for businesses and individuals by recruiting more employment tribunal judges and supporting greater use of virtual hearings
    • Government states that the Check Employment Status for Tax (CEST) tool supports status determinations but there are borderline cases where the determination is more complex
    • Government also recognises that there is further uncertainty caused by the non-alignment of employment rights and tax frameworks which can lead to individuals holding self employed status for employment rights but not tax and vice versa

See our previous news on the topic below;

Summary of Government response to Taylor review: The biggest change to employment status since 1996

Government response to Taylor review poses large changes for the future of the UK workforce

Taylor review outcomes; the use of Pay Between Assignment Contracts

Consultation: Agency Worker Recommendations

Consultation: Measures to increase transparency in the UK labour market

Consultation: Enforcement of Employment Rights Recommendations