It means that a substitution clause may soon stop doing the work agencies have asked of it. On 14 October 2026 the Department for Business, Innovation, Science and Trade opened its consultation on employment status reform and protections for the self-employed, which closes at 11:55pm on 8 January 2027. Nothing changes today, and the document says so on every page. But the proposals in it reach every contractor desk, every personal service company and umbrella arrangement, and every Key Information Document an agency issues.
Three proposals matter most. First, a presumption of worker status at tribunal. Today a person who says they are a worker has to prove it. The government proposes to reverse that for every right a limb (b) worker has, so the business that engaged them would have to show they are genuinely self-employed. Second, a rewritten worker test. At the second step a tribunal would ask whether the person provides the service personally and, or, is under a significant level of direction or control. Someone with a right to send a substitute but whose rate, hours and method are set for them would move on to the final step rather than fall out of the test. The paper says the ability to set or negotiate the rate of pay should be a key factor. Third, consequences for repeat offenders. A business that argues someone is not a worker after a tribunal has ruled that colleagues on broadly similar facts are would face the tribunal’s aggravating-feature penalty, which runs from £100 to £20,000 a claim under the Employment Tribunals Act 1996, and the Fair Work Agency could use its new civil proceedings power to bring status cases itself.
For an agency the questions to ask now are plain. Which of your contractors are engaged on a substitution clause that has never been used? Whose rate do you set? Which Key Information Documents describe a person as self-employed? The answers are the file you will want if the presumption becomes law. BIOR’s guides on umbrella and payroll compliance and on agency workers and temp desks set out the file as it stands today, and the timeline guide carries the consultation’s dates. Umbrella and payroll compliance, Agency workers and temp desks, The Employment Rights Act timeline.
The consultation also proposes a written statement for the self-employed, blacklisting and health and safety protections, and an online status assessment. Agencies and their contractors can respond online or by email to statusconsultation@businessandtrade.gov.uk.
Source: Department for Business, Innovation, Science and Trade, Make Work Pay: employment status reform and protections for the self-employed, 14 October 2026. The consultation on GOV.UK
Written by The BIOR Membership Team. Last reviewed 21 October 2026.