A full and independent review into the law surrounding self-employed workers and their rights is "long overdue", a Labour MP has argued.

Jim Cunningham told MPs "greater clarity" relating to self-employment was needed alongside a forum where individuals could query or challenge their employment status without having to go to court, potentially through an ombudsman or a Government agency.

The MP for Coventry South said: "My Bill calls for something long overdue, a full and independent review into the law surrounding self-employed workers and their rights. The need for this was demonstrated by the collapse of City Link in my constituency and other members' constituencies."

The delivery firm he said went into administration just over a year ago and an estimated 2,700 people lost their jobs along with 1,000 contractors.

His Bill would make provision about the establishment by the Secretary of State of an independent review of the operation of the Employment Rights Act 1996 in relation to the determination of employment status and dispute resolution mechanisms for employers and employees.

Mr Cunningham said: "City Link viewed their drivers as self-employed, these drivers provided their own vans, but were required to wear the company's livery and were not permitted to work for anyone else. These drivers were employees in all but name."

He added: "I am not in any way opposed to people being self-employed, in many situations I'm sure that is extremely useful. What I object to is people being denied the right type of contract for their work and therefore not getting the employment rights to which they should be entitled."

He went on: "It is time for a proper review led by experts in employment law, I suggest that a leading employment lawyer is appointed to chair that review. We need greater clarity as to the criteria of self-employment, we need a forum for which individuals can query or challenge their employment status without having to go to court.

"I would suggest that an ombudsman or a Government agency might be appropriate. We need penalties for companies that intentionally use bogus self-employment contracts and we need to give full consideration whether the rights and support we provide to the self-employed are adequate in today's world."

His Employment Status (Review) Bill was listed for a second reading on Friday March 11 but is unlikely to become law due to a lack of Parliamentary time.