Generally IO, I would agree with you, but not in the FI case.
Yes, we'd all love £35k for being a PPL FI, but isn't likely to happen anytime soon, but with the dodgy practices that abound in this industry I would far rather have the protection of being employed than not and get paid a bit less.
I've never been offered the choice of employment status as an FI, even though I have managed businesses, employed staff, had my hours dictated.
As an FI I have never had the benefit of sick pay, holiday pay, employment protection or any of the other things a PAYE employee gets as a matter of course. I have also never been offered a contract of employment of any kind despite asking for them or even offering to get them written up. When I do consultancy work or freelance flying for reputable companies, then there is always a contract drawn up and there is no doubt about my employment status.
When everything goes well, then there is usually no problem, but what if there is an incident, or someone get's hurt under your supervision. Most FI's have their own liability insurance, but many don't. So who get's sued?
There are many things like this that should never be an issue and the basic thoughts on whether you are employed or not are easy to find on the internet.
I remember bogbeagle posting about employment status before, so I will be very surprised if the tribunal doesn't find in his favour.