Prominent think tanks and charities are calling on the government to take stronger action against gig economy companies that they say systematically misclassify workers to strip them of statutory protections. The Fabian Society and Joseph Rowntree Foundation released a joint report highlighting that millions of workers in sectors ranging from hairdressing to food delivery lack access to benefits such as parental leave, redundancy pay, and protection against unfair dismissal.
The report specifically recommends that the Fair Work Agency, a workers’ rights watchdog established in April, utilize its civil proceedings authority to prosecute firms engaging in widespread “bogus self-employment.” The organizations further advocate for revisions to employment law to address long-standing abuses of the classification system. Britain’s employment framework includes three distinct status categories: employee, self-employed, and an intermediate “worker” classification. According to the analysis, approximately 4 million workers operate within this third category, often placed there intentionally by companies seeking to circumvent providing full employment rights.
Labour had previously campaigned on introducing a single worker status for all but genuinely self-employed individuals. However, the party retreated from this position before the 2024 general election amid opposition pressure and did not include it in the subsequent Employment Rights Act. Though Labour has pledged to consult on moving toward a single worker status, this process remains ongoing. The report urges shifting the burden of proof regarding employment classification from workers to employers, potentially reducing lengthy legal battles workers currently face to establish their entitlement to minimum wage and holiday pay.
A government representative stated that the administration’s employment protections agenda aims to strengthen job security and living standards, confirming that the Fair Work Agency is actively assisting workers in claiming their rights. Officials indicated openness to consulting on employment status changes and exploring how the agency’s enforcement powers might be deployed in coordination with that process.
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