27th August 2026
What Is The Difference Between An Employee And A Worker And Why Does The Distinction Matter?
With employment law changes continuing to be introduced as a result of the Employment Rights Act 2025, understanding employment status has never been more important for employers. The rights afforded to an individual can vary significantly depending on whether they are classified as an employee, a worker or genuinely self-employed.
Employers must ensure that individuals receive the statutory rights to which they are entitled, while also avoiding the risk of inadvertently extending employee rights to those who do not qualify for them.
What Is An Employee?
The definition of employee can be found in Section 230(1) of the Employment Rights Act 1996. An employee as defined by this section is an individual who has entered work under a contract of employment whether express or implied, and whether oral or in writing. For example, this would be an individual who is on a full-time contract of employment.
What Is A Worker?
A worker, on the other hand, is broken into two limbs: Section 230 (3 (a and b)). Under limb (a), a worker can be identified through a contract of employment. In other words, all employees are workers for the purposes of employment legislation.
The more controversial subsection is limb (b), which is more complex. Limb b defines a worker as an individual who has a contract to perform work or services for another party where that party is not a client or customer of an independent business run by the individual. The key question is whether the individual is working independently in business or their own account, or whether they are providing their labour in a more dependent working relationship.
A good example of this would be Uber drivers, where in a recent case (Uber BV v Aslam) the UK Supreme Court ruled unanimously that Uber drivers are subordinate and economically dependent on Uber, granting them statutory worker rights. This is a good example of a worker under limb b of the ERA 1996. Other examples of a worker under this limb could be a zero-hour hospitality worker or individuals engaged on an ad hoc basis where they can choose whether to accept shifts, and they often receive holiday pay and minimum wage.
What Is The Difference In Obligations?
Although workers do not benefit from the full range of employee protections, they are still entitled to several important rights including:
- Getting the national minimum wage and protection against unlawful deduction from wages
- The statutory minimum level of holiday and rest breaks
- To work no more than 48 hours per week or to opt out of this right if they choose
- Protection against unlawful discrimination
- Protection for whistleblowers
- Not be treated less favourably if they work part time
- They may also be entitled to statutory family leave (maternity pay, paternity pay, adoption pay etc.)
Employees benefit from a significantly broader range of employment protections including:
- The right to receive statutory minimum notice of termination
- Protection from unfair dismissal
- Statutory redundancy pay
- The right to request flexible working arrangements
- Time off for emergencies
- Family leave rights (maternity, paternity, adoption, etc.)
What Should Employers Do Going Forward?
Given the changes to employment rights over the coming months, it’s important that employers can clearly define the status of everyone who performs work for their company. Regular audits of contracts can help minimise risk and ensure compliance with legislation, further ensuring that employees are being provided with the appropriate rights and protections.
