UK consultation proposes making employers prove contractors are not workers

The Deliveroo litigation shows what the proposals are built to reach. In 2023 the Supreme Court upheld the finding that Deliveroo riders were not workers, since the company did not oblige them to make the deliveries themselves ^[5]. Gig employers such as Deliveroo have written substitution clauses into contracts so they can argue their drivers are genuinely self-employed, and the government is keen to clamp down on the practice ^[4]. The consultation argues that its reforms "would reduce the incentives and opportunities for some unscrupulous businesses to game the system, inserting misleading substitution clauses into contracts or otherwise misclassifying their workers as self-employed" ^[15].

The test would change on two fronts. Control would play a greater role in the status test than personal service ^[6]. One suggestion is to legislate so that a right of substitution, where one exists, would not outweigh other indicators that someone is a worker ^[8].

The burden of proof is the second change, and in our view the costlier one for employers. Today the individual carries it, and the consultation would move it onto the employer ^[6]. An employer holding a signed substitution clause but no records of who did the work, or under whose direction, would have little to put before a tribunal.

The scale of the problem rests on one estimate. The Resolution Foundation says 900,000 people may be at risk of bogus self-employment ^[3]. Coverage of the consultation did not disclose the method behind that figure or how many of those people work under substitution clauses.

The consultation also admits the record of inaction. It says "Employment status is inherently complex and there have been draft papers circulating Whitehall for decades" ^[13]. It adds: "But nothing has been done, so injustice, confusion and risk have continued" ^[14].

That history is the reason not to expect legislation soon. The three-tier framework of employee, worker and self-employed would remain under the reforms ^[7], and tax status is outside the exercise ^[1]. The consultation floats an online status tool similar to HMRC's CEST tool, which has been widely criticised ^[11]. Without a closing date or a legislative timetable, contracts signed this quarter will be judged under today's test for an unknown period, and possibly under a control-weighted one afterwards.