Contracts

It can be difficult when working in media and entertainment to be certain about your contractual status; this is because of the mix of staff and atypical workers (often working side by side).

One word which is commonly used in the industry is “freelancer”. Although this is widely used, it is not defined in law and has no legal meaning. In the eyes of the law, those who think of themselves as freelancers in fact belong to one of three categories which DO have legal meaning:

  1. Employee OR
  2. Worker OR
  3. Business Undertaking.

Employee

Employees have an employment contract with an employer. They qualify for the full range of employment rights, some from the first day of employment and others, such as unfair dismissal or redundancy rights, depend on length of service.

When employees are paid, the employer deducts tax and national insurance (NI) at source (ie through Pay As You Earn, better known as PAYE). In some cases employees on very short contracts lasting one day or a few days may have approval to receive their pay without these statutory deductions, that is, gross instead of net. These people are required to make their own arrangements to pay their tax and national insurance.

Worker

Worker status is more ambiguous than employee status. However it is defined in law. BECTU has used it twice successfully in court: firstly, to take the British Government to the European Court over freelance workers’ holiday entitlement; and secondly to take the BBC to the Central Arbitration Commission to win recognition for freelance workers engaged by the Natural History Unit.

Most people in the media and entertainment industries who think of themselves as freelance are probably workers. This means they have certain statutory employment rights (eg. under health and safety and working time regulations) but fewer statutory rights than employees (eg. no entitlement to statutory sick pay or to redundancy pay).

In essence, all employees are workers, but not all workers are employees.

Business Undertaking

This term may be unfamiliar but  the principle is simple. Rather than an individual worker offering his or her services on a personal basis ie as Joe Smith,camera assistant or as Joanna Brown, sound recordist, the individual makes themselves available for work through their own limited company or partnership. Where people hire themselves out through their own company, they cease to have an employment relationship with the hirer; the nature of the relationship becomes a purely commercial one without recourse to the law should any employment claims arise. (NB: It may appear to be more tax efficient to operate through a limited co. than as an individual freelance but our advice is 'do the sums'. Our view is that turnover needs to be pretty high before it makes tax sense).

BECTU has a DIY test for members who are unclear about their employment status on any job.

Do contracts matter?

Is it important what kind of contract you are on? The short answer is "yes”. As we have seen above, the kind of contract you are working to (or your contractual status) can affect the amount of income tax you pay and your legal rights in the workplace. It can also make a huge difference to how you are treated if you are sacked or if your engagement is prematurely terminated.

The golden rule

The golden rule whenever you are working for someone else is: get it in writing.

This applies whether you are a permanent employee, a casual/short-term employee, a freelance worker, or a sole trader running your own small business. Even if you don’t have a formal written contract, a written document can help to resolve the issue quickly if there is a disagreement about money, duties or hours of work. So even where arrangements are loose, or if it’s just a verbal booking, it’s still a good idea to confirm by email or letter what has been agreed:

  • Set out the nature of the job, dates, hours of work, and the rate of pay that you have agreed.
  • Say that this is what you understand the arrangement to be, and invite them to come back to you if they disagree.

Confirmation of booking template

Y0u can use the Confirmation of Booking template (attached this page) to help you to confirm the details of your booking.