The industry is rife with 'contractors'; a good example is 'contract' flight instructors whose only full-time employment is with one ATO and being paid flight pay only (with no basic salary) by ATO's that don't pay them a basic salary as employees.
There is some benefit to the 'contractor' (provided he/she gets enough flying hours) but the biggest gain is by far to the operator.
The problem is, if HMRC (UK) jump down the throats of the ATOs and insist that they are taken on the books as employees with the ensuing NI and pension costs, the cost of flight training will probably have to go up to offset the additional costs to the operator.
There are pros and cons to every argument but personally I would prefer a fixed salary; at least I know how much I will be getting each month and can budget accordingly. Back in the day, at C***** we were paid a basic salary which covered the first 40 hours of instructing and then additional flight pay for hours in excess of 40.