The employment status question facing Andy Burnham as he prepares to become PM

The employment status question facing Andy Burnham as he prepares to become PM

Andy Burnham is set to become Britain’s new Prime Minister on Monday after securing the Labour leadership this week.

Mr Burnham’s path to No 10 was confirmed when he won the backing of trade unions linked to the Labour party. It came after 349 of the party’s MPs nominated him to replace incumbent Sir Keir Starmer.

But what will a Burnham-led government look like for the self-employed and flexible workforce?

During his recent successful campaign to become MP for Makerfield, Mr Burnham announced he would consider cutting some employers’ national insurance contributions, positing that his soon-to-be predecessors “got it wrong on small business”.

Whether that is an indication of a business-friendly approach from the PM-in-waiting remains to be seen.

Key issues he will need to address include the tax burden on the UK’s smallest businesses, overall tax simplification, off-payroll working, and employment status.

In this article, we examine just one of those matters: the long-running question of employment status and what Mr Burnham’s arrival could mean for Labour’s single worker status pledge.

What is single worker status

When Labour, under Sir Keir, swept to victory at the 2024 general election, one of their key proposals was the introduction of single worker status.

The stated aim of the policy was to improve rights and protections of workers in the gig economy and other non-traditional types of employment, but over the last two years it has been sidelined.

The government said the introduction of a single worker status would remove existing complexities that can leave gig economy workers without adequate employment protections.

It would see all workers, regardless of their employee status, granted increased employment protections and rights. These would include a minimum wage, holiday and statutory sick pay, protection against unfair dismissal, and the right to unionise.

How does the current system work?

Currently, there are three main worker statuses, each with different rights and responsibilities. These are:

• Employee: Someone who works under an employment contract, has all employment rights in place and their tax deducted by their employer at source, under PAYE

• Worker: A person who has a contract or other such arrangement to do work or provide a service for money or benefit in kind. Those with worker status only have certain employment rights. For example, they would not be entitled to statutory sick pay or protection against unfair dismissal. 

• Self-employed: Someone who runs their own business and is not paid via PAYE. A person who is self-employed would not have the rights and responsibilities of an employee.

The potential downside of single worker status

One big question around single worker status is how a system can be created that works for both those people who have been pushed into self-employment, and those who have embraced it.

At one end of the scale, you have individuals who operate in the worker category, often in lower paid roles, who do not have any employment protections – exactly the situation the government is trying to resolve.

This has been the case with many gig economy workers, who have been classified as independent contractors and missed out on protections such as holiday pay or the minimum wage.

On the other hand, there are those who want to be self-employed and are completely cognisant of the risks involved. Many of these people have been forced into being employed for tax purposes because of legislation such as the IR35 rules.

The challenge will be to find a system which protects and supports both without unfair disadvantage. The worry is that single worker status could remove the flexibility enjoyed by some self-employed workers, imposing a more rigid system that is reflective of full-time employment.

Aligning employment status and tax status

One other pressing matter is the question of whether employment status for rights and employment status for tax should be aligned.

Currently, these two distinct arms operate within different systems. The former goes through the employment tribunal system, while the latter falls under the jurisdiction of tax tribunals.

While these areas use some mutual tax law, they are otherwise completely separate. This means the status of worker mentioned above does not exist in tax law, meaning those who hold that status are in a real no-man’s land from a tax perspective.

In 2022, the then-Conservative government announced tax and employment status would not be aligned as part of any changes to employment status. Nevertheless, such alignment would certainly be beneficial and any discussion of employment status should include this issue.

Ultimately, any employment status solution which fails to align the two statuses is unlikely to achieve the desired simplification.

What has happened with the single worker status plan?

Despite it being a prominent part of their election campaign, the issue of single worker status went quiet after Labour came to power.

While the party’s flagship Employment Rights Bill made its way through Parliament, there was no mention of employment status generally or single worker status specifically.

In July 2025, as part of a House of Lords debate, Labour Peer Baroness Jones said her party remained committed to a consultation on employment status, and that it would be published before the end of 2025.

The general feeling was that this would likely include the original single worker status plans, but the consultation has remained conspicuous by its absence.

What will Andy Burnham do as PM?

When Mr Burnham becomes Prime Minister, he will have plenty to attend to. From defence spending and taxation to immigration and dealing with Donald Trump, the former Mayor of Manchester will doubtless be busy.

Nevertheless, the issue of employment status is a vital one when it comes to worker’s rights and boosting economic growth.

This is not the first time Parliament has seemingly been on the verge of addressing the issue of employment status.

A comprehensive consultation in 2018 covered a huge amount of ground across tax and employment law, but resulted in no new legislation. Prior to that, the Matthew Taylor review of modern working practices in 2017 contained a host of recommendations that came to nothing.

To date, Mr Burnham has unsurprisingly been keeping his policy cards close to his chest, so whether he decides it is finally time to grasp the nettle of employment status remains to be seen.

The UK’s independent workforce will be hoping he outlines his position sooner rather than later. After all, commitment to a policy consultation is no substitute for bringing in solid legislative change.