Re: Already happening
It seems to me that "worker" is an attempt to a) give rights to self employed people working for companies in the same way as employees or b) muddy the water between employee and self employed depending on your viewpoint.
But in the case itself Mr. Smith was self-employed, not running a one-man company, at least according to this.
Maybe the government thinks this 'worker' definition can be used against employees of one-man companies (contractors)?
Employee - where a contract of employment exists. This gives the full range of employment rights including protection from unfair dismissal, right to a redundancy payment, annual leave and pay, sick pay.
Worker - where a contract for service to do work personally exists ( or an employment contract as above).This gives a more limited range of working rights, including to annual leave and pay; to be paid at least the National Minimum Wage level and no unlawful deductions from wages.
Self employed - where neither of the above types of contract exists. This attracts a very limited range of working rights eg health and safety, working time and (with qualifications) discrimination protections.
It can be difficult to determine which category (and therefore which set of working rights ) applies to individuals apparently contracted with businesses as self employed contractors and who are self employed for tax purposes.