The UK government has launched a major consultation aimed at tackling ‘bogus self-employment,’ a practice where businesses mislabel staff as self-employed to avoid paying the National Minimum Wage, holiday pay and other statutory obligations.
The Government claim the plans could benefit an around 900,000 workers currently trapped in this arrangement.
The 12-week consultation, published yesterday (14th October) sets out proposals that would make it harder for employers to use substitution clauses – where a worker can send someone else to do their job – as a loophole to deny them worker status and basic employment rights.
Under the current system, a genuine right to substitution can automatically disqualify someone from being classified as a ‘worker.’ The government is proposing to reduce the weight given to personal service and place greater emphasis on the level of control an employer exercises over how, when, and where work is done.
Business Secretary Jonathan Reynolds said: ‘When loopholes are exploited, people are denied their basic employment rights and businesses doing the right thing are undercut.
‘These proposals are about creating fairness that works for businesses and working people alike, while continuing to back the flexibility and independence that genuine self-employment offers.’
The consultation also proposes introducing a presumption of worker status, which would shift the burden of proof in employment tribunal cases. Instead of individuals having to prove they are workers, the business engaging them would need to demonstrate that they are genuinely self-employed. This measure, combined with new enforcement powers for the Fair Work Agency, is designed to make it easier for workers to access the rights they are already entitled to.
Alongside the crackdown on bogus self-employment, the government is proposing targeted protections for people who are genuinely self-employed. These include a new right to a written statement of key contract terms and extended protections against blacklisting and health and safety detriment.
The consultation closes on 8th January 2027. Business groups, trade unions, and self-employed representative bodies are invited to respond.
Photo: Kindel Media
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