Prime Minister Andy Burnham is under pressure to reform gig economy worker protections, with calls to prosecute companies using 'bogus' self-employment practices.
The gig economy has become a cornerstone of modern employment, yet millions of workers remain vulnerable to exploitation. Prime Minister Andy Burnham is now facing intense pressure to overhaul the system and protect these workers from unfair practices.
Think tanks and anti-poverty charities are urging Burnham to take decisive action.
The Fabian Society and the Joseph Rowntree Foundation have published a joint report highlighting the urgent need for reform. They argue that millions of workers, including delivery drivers, personal trainers, and hairdressers, are being denied statutory rights such as parental leave, redundancy pay, and protection against unfair dismissal.
The Current State of Gig Economy Workers
The UK’s employment laws are unique among leading economies, categorizing workers into three distinct statuses: employeesworkers and self-employed. This system has created a legal gray area where many gig economy workers fall short of full employee protections.
According to the report, as many as 4 million workers are operating in this gap, often hired by companies seeking to avoid granting them full employment rights.
Labour had initially promised to create a single ‘worker’ status for all but the genuinely self-employed. However, this plan was shelved before the 2026 general election to avoid Conservative criticism. Once in power, the policy was not included in Labour’s Employment Rights Act, despite promises to consult on moving towards a single worker status.
The Role of the Fair Work Agency
The report calls on the government’s Fair Work Agency launched in April as a powerful watchdog for workers’ rights, to use its civil proceedings powers to prosecute companies suspected of engaging in ‘widespread bogus self-employment’. The agency is also urged to push ahead with changes to employment law to combat longstanding misuse of the system.
Experts argue that shifting the burden of proof from the worker to the employer would help people avoid lengthy legal battles to secure basic rights such as the minimum wage and holiday pay. Luke Raikes, the deputy general secretary of the Fabian Society, emphasized the need for the government to ensure that companies playing fast and loose with employment law cannot undercut those who follow the rules.
The Economic Impact of Reforms
Last week, official government analysis showed that the planned changes to employment rights would help support economic growth and offer workers more protections. However, these changes would cost businesses an estimated £350m to £2.9bn. In his first week in office, Burnham spoke to business leaders to state his determination to push ahead with the plan for the biggest shake-up of employment rights in a generation.
The Fabian Society and Joseph Rowntree Foundation argue that changes to address employment status are needed to ensure gig economy workers benefit from these upgraded protections. The report calls for the burden of proof for whether someone is an employee, worker, or self-employed to be shifted from the worker to the employer. This would help people avoid fighting lengthy legal battles to secure basic rights such as the minimum wage and holiday pay.
A government spokesperson said, ‘Our plan to make work pay will boost secure employment, improve job security, and deliver stronger, higher living standards. The Fair Work Agency is already helping workers get the rights they are entitled to. We’ve committed to consult on employment status and will consider how the Fair Work Agency can use its civil proceedings power alongside that.’
