Generally speaking its bad for you and good for the employer.
You lose things like paid holidays, sick days, you go back to a dickenzian system whereby you are paid for the hours you work and that is that. You can be let go on a whim.
I've found in some industries people start off on contracts and then get upgraded to being PAYE employees when they have proved themselves, but going the other way? generally a bad thing,
unless you are in PR or something where you might like the freedom to work for 5 clients at a time?