Alarm over Labour not ‘proceeding at pace’ on Single Worker Status

The Employment Rights Bill is keeping SWS on the shelf, much to the benefit of the unscrupulous and their ‘shuffling, sharp, and sloughing off’ practices.  

Experts agree on why Labour is ignoring a formal recommendation on Single Worker Status, and some are even sympathetic.  

Pledged in Labour’s 2021 “New Deal for Working People,” Single Worker Status could have made headlines at Spring Statement 2025. 

Single Worker Status hinges on creating one new type of ‘worker’, outside of which there is only type two: the genuinely self-employed.  

‘Government must proceed at pace’ 

But like the IR35 off-payroll rules (which govern some of the issues SWS may fix), Single Worker Status wasn’t in the chancellor’s report. 

A Single Worker Status consultation was all but called for on Feb 24, when the Business & Trade committee recommended to ministers: 

“The committee welcomes the government’s plans to reform worker status and bogus self-employment, [but] it must proceed at pace”.  

The committee’s recommendation (that ministers “must proceed at pace”) was based on evidence it received from Margaret Beels. 

‘Employment status needs to be addressed, amid sharp practices’ 

Beels, director of labour market enforcement (DLME), told the committee:  

“The whole business of employment status needs to be addressed. 

“Having the three levels of status for employment [of employee, worker, and self-employed], and then two levels [of tests for tax purposes], is confusing,” said the DLME. 

She warned: “And [it] allows people to engage in sharp practice, shifting workers around between those [statuses].”  

‘Deemed self-employment situations’ 

Beels said “more and more workers” were being “shuffled into what are deemed to be self-employment situations.” 

“[But] I do not believe [they] are appropriate for self-employment… [due to] the degree of control there is over them.” 

Asked by the committee about the Employment Rights Bill (which does not feature status), Beels reiterated her concerns. 

‘Not what self-employment is meant to be about’ 

“I was talking to some people…about the [supply] chain associated with engaging workers, which ends up with that worker being self-employed.  

“The client goes to an agency that goes through an agent and it cascades down”.  

According to Beels, “these things need to be called out” because it is “not what I think self-employment was meant to be about.” 

“A priority issue… [is] businesses sloughing off their responsibilities to what I would regard as employees, even if the law is that it cannot be demonstrated as such.” 

‘Government can consult until the cows come home’ 

Then, more straight-talking and hinting that a consultation on SWS should have been the least that Spring Statement unveiled, Beels reiterated:  

“I would like to see the government stepping up to do more to address that.  

“I know that there is discussion about having a further consultation. I think you can probably consult until the cows come home on this issue, and it is about time to do something about it.” 

‘Side-step Employment Rights Bill measures’ 

Staffed by influential MPs from Labour, the Conservatives and the Lib Dems, the committee took Beels’ comments about SWS to heart.  

“[The government] must proceed at pace to turn ambition into action,” it wrote. 

“If it does not, it risks more companies adopting a ‘self-employment’ model for their workforces to side-step the measures in the Employment Rights Bill.” 

‘Government must prioritise self-employed status review’ 

Continuing its formal recommendation to the government, just a month before Spring Statement 2025, the committee added: 

“The government must prioritise its review of employee, worker and self-employed status immediately. 

“And as a priority, [it must] address false self-employment, so that these reforms are rolled out alongside commencement of the Employment Rights Bill.” 

‘No Single Worker Status consultation at Spring Statement is a blow’ 

Ryan Dawson, IR35 Project Manager at Kingsbridge, says ‘proceeding at pace’ and ‘prioritising’ was code for Labour to act at Spring Statement.   

But the government didn’t act on status on Wednesday March 26th, not in relation to IR35 or Single Worker Status. 

“The lack of update and absence of a SWS consultation from the chancellor will feel like a blow, and not just to the committee,” begins Kingsbridge’s Mr Dawson. 

‘What Single Worker Status means for IR35 still unknown’ 

“Many contractors, agencies and even end-users would like to know more detail about how SWS might work, and what it means for IR35. 

“Single Worker Status would essentially align employees, limb (b) workers and the bogus self-employed under a single status. 

“They would each get more rights and entitlements, so to not act quickly on SWS might look at odds with the approach to the ERB”.  

‘Labour Employment Rights Bill taking up so much real estate’  

Dawson hinted the Employment Rights Bill, with its 28 measures spread across 150-plus pages, is effectively keeping SWS on the shelf. 

Kingsbridge’s IR35 Project Manager says: “Labour’s plan ‘Next Steps to Make Work Pay’ plan of November 2024 recommitted to Single Worker Status. 

“But its absence six months on could very well be down to the fact that its Employment Rights Bill is taking up so much real estate. 

“Labour may simply not want to do too much all at once, particularly while the country’s economic pressures are so great.” 

‘Labour has not committed to a Single Worker Status timetable’ 

Kate Shoesmith, of the Recruitment & Employment Confederation (REC), met Whitehall officials only last month for policy talks. 

She explained that Kingsbridge’s IR35 Project Manager has got it about right.  

“Single Worker Status is so complex and there’s so much to do around the Employment Rights Bill,” Shoesmith, the REC’s Deputy CEO began to Kingsbridge. 

“That’s in addition to the secondary regulations required for the commitments that have been made [by the government]. 

“In my understanding, these reasons are why Labour has not [yet] committed to a timetable for Single Worker Status.” 

‘ERB and SWS are both sides of the same coin’ 

Philip Ross is vice-chair of Labour Business. 

He declined to speculate why SWS hasn’t been prioritised like the ERB has. 

Ross sounds sympathetic, however, favouring a ‘get-it-right-first-time’ approach to two frameworks he says are separate but interlinked. 

“The ERB and the plans for Single Worker Status… are both sides of the same coin, as they both affect each other,” Mr Ross began in a statement to Kingsbridge. 

“Positively, there is a recognition [by Labour’s top brass] that the need for rights at work isn’t the same as employment rights.  

“And while I agree [with the Business & Trade committee] that the government needs to proceed at pace…it recognises that self-employed status isn’t a simple addendum.” 

‘Labour knows self-employed status cannot just be added on’ 

Ross stressed: “It’s not a ‘fix’ that can just be added on. It needs its own proper deliberation.” 

Susan Ball, of audit, tax and consulting firm RSM UK, didn’t attend last month’s annual IR35 conference. 

But she last night spoke to two things that the event dedicated to off-payroll working heard. 

First, SWS is in a box marked “Too Difficult” and second, outlining its economic benefits is how to convince Labour to take it out for implementation. 

‘Case law increasingly taking years to resolve’ 

RSM’s employment Tax Partner, Ms Ball told Kingsbridge: “As we navigate the complexities of modern employment, and with case law increasingly taking years to resolve, it’s crucial for the government to streamline the processes businesses must follow when determining the status of workers.  

“Currently, having two separate tests for tax purposes, and three for employment law, creates unnecessary confusion, uncertainty and administrative burden.  

“Simplifying these criteria will not only help businesses ensure more efficient compliance, but also provide greater clarity and fairness for workers.  

“A unified tax and legal approach will also foster a more transparent and equitable working environment, benefiting both employers and employees alike. Removing burdens on businesses such as these will surely help them grow.” 

Overall, RSM UK backs the government’s commitment to reform worker status and tackle bogus self-employment, says the firm’s Head of Legal Employment Services Charlie Barnes. 

‘Action needed now to address false self-employment’ 

But rather like Beels, Barnes says he wants to get on with it. 

A former specialist in employment tribunals, he told Kingsbridge:  

“It is crucial that these reforms progress swiftly through parliament to prevent companies from exploiting self-employment models to circumvent the new measures.  

“As the DLME aptly stated, ‘the government can consult until the cows come home,’ but action is needed now.  

“Prioritising the review of employee, worker, and self-employed status, and addressing false self-employment, must be immediate priorities to align with the commencement of the Employment Rights Bill.” 

‘Solution to bogus employment’ 

Speaking from Labour Business, which works closely with the Labour frontbench, Mr Ross made an important acknowledgement. 

He said: “We all know that tax and employment status are mixed up at present, and the solution to bogus employment…is fundamentally linked to this as well.” 

Kingsbridge’s Mr Dawson pointed out that unfortunately, it’s not just theoretical – he’s already hearing whispers that the unscrupulous are enthused at SWS still being conceptual.  

‘Inertia on Single Worker Status, amid side-stepping already happening’ 

“The Business & Trade Committee highlight, which we at Kingsbridge would echo as a concern, some consequences of inertia on SWS. 

“It found that if reforms to status are delayed, ‘lawyers and unions have warned that businesses could sidestep the ERB by hiring staff as self-employed contractors, temps or agency workers.  

“‘This would mean,’ the committee says, ‘those workers would not be entitled to the reforms laid out in the bill.’ 

“Well, I have heard conversations mooting, in effect, the above point about sidestepping potentially already happening.”  

‘Single Worker Status is a longer-term goal’ 

Ominously for such workers, some of whom may have to become familiar with IR35, the government isn’t even describing SWS as a medium-term project. 

Business minister Justin Madders said on January 29th 2025: “The government remains committed to consulting on moving towards a single status of worker. 

“We were clear that some reforms in the Plan to Make Work Pay will take longer to undertake and implement, and we see consulting on a simpler, two-part framework for employment status as a longer-term goal.” 

‘The May government realised how hard employment status was’ 

Such a ‘jam tomorrow’ statement by Mr Madders might cue him up for a phone call from Mr Ross and his colleagues. 

Labour Business’s vice-chair told Kingsbridge: “Theresa May’s government did very well with the Taylor Review. But then they lost the momentum when they realised how hard status was.  

“So, Labour needs to get the balance right between not rushing it, but also proceeding at pace – as the business and trade committee have urged.” 

‘End of the current parliament’ 

Kingsbridge’s Mr Dawson doesn’t sound like he’ll be holding his breath – or expecting many cancellations of IR35 protection insurance in the foreseeable. 

“With the long-term clearly in Labour’s mind for its realisation, Single Worker Status might be a policy reserved until the very end of the current parliament,” he says. “We shall simply have to wait and see.” 

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