Fixed Term Contract Directive BECTU's comments to TUC

26 October 2000

  1. BECTU welcomes the Fixed Term Contracts Directive in broad principle. Some of our specific concerns and problems in this area are briefly summarised below.

  2. Our experience of the use of such contracts is extensive. Between a third and a half of our total membership is freelance. Many of them work regularly for employers - especially broadcasters - with permanent staffs. The repeated renewal of fixed-term contracts and the (in some respects) inferior conditions available to such workers are familiar features of this sector. Legislation to address these problems is therefore welcome.

    Definition of 'fixed-term worker'

  3. As with many other areas of employment legislation, we are concerned to achieve an inclusive definition of 'worker'. The same debate has arisen in relation to the Working Time Regulations, the Part-Time Workers Directive and the Employment Relations Act (including the power to extend employment rights to 'workers' rather than 'employees').

  4. The exact definition of 'worker' is important to our freelance members. We have a large number of PAYE freelances who, we assume, would fall under any likely definition of 'worker'. However, we also have a very significant number of Schedule D freelances ie freelances who are self-employed for tax purposes. In our view, it is essential to include these individuals within the definition of 'workers'. Without such an inclusive approach, a large proportion of the very people who the Fixed-Term Directive is supposed to help will simply be unable to have access to its benefits. This would undermine the EU's broader aim of providing protection to atypical workers as well as contravening our own Government's inclusive approach to employment legislation.

  5. Schedule D freelances will habitually work on fixed-term contracts. They work side by side with PAYE freelances and staff on the same productions and (with the exceptions noted below) under the same collective agreements. They may in many cases have had no choice about working in this way since the film industry and independent film and TV production sector is overwhelmingly casualised. Many Schedule D freelances have in the past been made redundant by broadcasters and have in effect been forced into the freelance labour market, with no permanent posts being available to them. If such individuals do not count as fixed-term workers then the definition of such workers is, in our view, being drawn so restrictively as to omit the very people whose problems this initiative is meant to address.

  6. We accept that genuine small businesses should fall outside the definition of 'worker'. There is, however, a minority of Schedule D freelances who operate, for tax reasons, as labour-only service companies ie the sole activity of the service company is to offer the labour of that individual. The existence of such service companies does not alter the fact that the individual is simply and solely offering their own labour for hire in the freelance labour market and this should not, in our view, rule them outside the definition of a 'fixed term worker'. Beyond this, it bears repeating that most Schedule D freelances do not even have service companies and operate entirely as individuals.

  7. We further hope that any definition of fixed-term worker will encompass as very common employment pattern under which individuals who are made redundant by a broadcaster are offered some initial freelance work by the same company over the following period. The prospect (though not the guarantee) of such work - which helps establish an individual on the freelance labour market - may often be a background factor in the discussions on redundancy terms.

  8. Our concern here is that the early freelance employment pattern of such individuals may be dominated by work for their former company. This should not, in our view, lead to any presumption of an indefinitely ongoing relationship. Such individuals will often increasingly take work from other sources as they made their way in the freelance labour market (or, alternatively, are forced to move out of the industry altogether). Any notion of 'independent' fixed-term workers should, in our view, definitely include such individuals.

  9. These are additional aspects of the definition of a worker concerning the supply of equipment (for the individual's own use), invoicing and VAT regulation. I attach an extract from BECTU's contribution to the earlier consultation on introducing the Working Time Directive, which covers these points. (Appendix 1).

    Principle of non-discrimination

  10. We obviously welcome the principle of non-discrimination as between fixed-term and permanent workers. Our experience, unfortunately, is that such discrimination is common, especially on the part of broadcasters engaging fixed-term workers. Although we continue to seek improvements through collective bargaining, there remain many circumstances where fixed-term workers remain in an inferior position in respect, for example, of access to pensions, contractual sick pay, contractual holidays and contractual redundancy terms. There are also instances of adverse treatment in respect of access to maternity leave and the right to return - with individuals finding their contracts ending owing to the 'lack of further work', which allows employers a pretext to avoid the charge of unfair dismissal on grounds related to pregnancy.

  11. In the previous discussion on the Part Time Workers Directive, we examined examples of freelances working on inferior conditions to permanent employees. Such examples are wholly relevant to the debate on fixed-term workers and I therefore attach our comments to the TUC on that issue (Appendix 2). The first example quoted - of freelances working for permanent employers - is the most significant.

    Abuse from the use of successive fixed-term contracts

  12. The repeated renewal of fixed-term contracts is an all too common feature of the freelance labour market in our sector. Broadcasters (including both ITV and BBC) are known to hire individuals on a succession of such contracts - sometimes even over periods of 10 or 12 years. This has also been noted as a practice indulged in by some major independent production companies eg Pearson, Mentorn, Endemol. Such individuals are thereby denied full access to staff conditions and have inferior job security.

  13. We have sought o remedy this by collective bargaining (eg by reducing the period at the BBC beyond which fixed term workers can transfer to staff contracts). Our aim, in ITV for example, is to achieve the right to transfer to a staff contract after a maximum of 2 years. This is far from being achieved and the abuse of fixed-term contracts remains a significant problem. We would therefore welcome the introduction of legislative limits to such abuses.

    Redundancy waivers

  14. Having supported a member in a potentially landmark case (BBC v Kelly-Phillips) on unfair dismissal waivers (settled only prior to the House of Lords stage), we obviously welcomed the ERA's abolition of such waivers for employees on fixed-term contracts. We remain concerned, as outlined above, that this provision should apply to an inclusive definition of 'workers' rather than a narrow one of 'employees'.

  15. The Court of Appeal ruling in the above case recognised the risk of abuse arising from waivers both of unfair dismissal and of redundancy rights and looked to a remedy through legislation. The redundancy waiver problem remains (for all fixed contracts of 2 years or more) and we therefore look to the Fixed Term Contract Directive to re-examine this issue and the time limits involved.

Appendix 1

Extracts from BECTU's response to consultation on implementation of Working Time Directive (May 1998)

3. We wish, however, to clarify the working of our industry in some respects - especially the freelance labour market in film and television production. We believe that clarity on the position of freelances is essential in order to implement the spirit of the Directive in practice. In particular, we would point out that the vast majority of freelances operate in a way in which they 'perform personally any work or services' for the other party to the contract. In doing this, individuals may, from time to time, supply equipment together with their labour; they may invoice for payment; and they may be registered for VAT. None of these factors in themselves should in our view prevent such individuals from qualifying as 'workers' and we would certainly be prepared to challenge adverse interpretations through Tribunal cases.

4. These three factors are a product of the casualised nature of the industry and should not be taken in themselves as indicating that someone is 'in business on their own account'. The supply of equipment is essentially the individuals' 'tools of trade' in a broad sense. Given the sophisticated nature of contemporary film and television production this can encompass items which are expensive and complicated (eg camera equipment) but which may not be supplied by the production company for which the individual is working. This is not a sign of being in business - merely of providing the wherewithal to do the job required.

5. The practice of invoicing is widespread. Individual freelances will typically move rapidly between engagements for different companies. They may well not be paid in full until after they have left the engagement in question and moved on. Presenting an invoice is often the only practical way an individual freelance can indicate, for their own protection, the amount owing for their labour. The apparatus of wages departments and regular wageslips associated with permanent employment is simply not present. Again, therefore, this is not a sign of being in business - merely an unavoidable consequence of working in an overwhelmingly casualised labour market.

6. Finally, registration for VAT is significant for tax purposes, but does not, in our view, necessarily constitute a sign of being in business. Individuals may register for VAT without operating through a service company, and purely to deal with earnings derived from their personal labour. There is no reason, in such cases, to doubt that the individuals concerned continue to be 'workers' for purposes of the Regulations.

Appendix 2

11 June 1998

Jo Morris
TUC
Congress House
Great Russell Street
London
WC1B 3LS

Dear Jo

Part Time Workers Directive and Freelance/Short Term Contract Workers

You may recall that I met you, together with Dave Feichert, for a brief discussion on this issue in May. As BECTU, our concern is to clarify whether and to what extent our freelance/short term contract members could potentially benefit from the Part time Workers Directive (leaving aside the plans for possible future legislation on fixed-term contract workers). The members concerned typically work in the audiovisual sector in technical, craft and creative occupations - for broadcasters, feature film and commercial producers, independent production companies and facility houses.

There are many situations in which 'freelances' (using the term to include all forms of freelance and short term contract work) could work side by side with permanent employees while being on different terms and conditions. Some examples are as follows:

1. Freelances Working for Permanent Employers

Permanent employers in our sector - typically broadcasters such as the BBC - will often hire freelances, who could work in 'mixed crews' ie side by side with permanent staff. In the BBC, for example, they could work on outside broadcasts (where there could be a mixed freelance and staff camera crew), regional productions, news, drama etc, ie anything project-based or directly linked to programme making rather than administrative or financial roles. Typically, any PAYE freelances working for less than 4 weeks and all Schedule D freelances would be hired on other than standard BBC conditions and would not, for example, have access to BBC staff pensions, sick pay or holidays.

2. 'Stringers'

Typically, these would be camera or sound crew hired by a broadcaster (eg BBC, ITN, some ITV companies) for newsgathering roles. They could be hired on the basis of a guaranteed number of days (eg 200) for the year, but would not be on staff. They could be called at short notice and could substitute for staff. Despite the fact that they could sell work alongside permanent employees, they would not have access to the full range of staff conditions.

3. Permanent employees hired out to independents

Mixed permanent/freelance crews could also arise when permanent staff are hired out by broadcasters to work for independent production companies who have very few staff of their own and largely use freelances. Typically, the broadcaster could commission a programme from an independent, and as part of the deal, some staff technicians would be hired out to work with an otherwise freelance workforce. Sometimes staff could also be hired from a broadcaster other than the commissioner. In these situations, permanent staff (who for the duration of the project are managed by the independent producer) will remain on their normal terms and conditions, which freelances would not have access to.

4. Independents with a core of permanent staff

Some independent facility companies (who may not initiate or produce programmes themselves but whose equipment and studios are used by independent production companies) have a core of permanent staff who could work, on a project-by-project basis, side by side with the freelance workforce hired by the client company. Such freelances would not have access to the full range of staff conditions.

We hope that in your discussion with the DTI on transposing the directive the position of freelances can be raised, and that the above examples are helpful as illustrations. It would, in our view, be fully in line with the new more inclusive approach taken in the Working Time Regulations and referred to in 'Fairness at Work', for freelances to be provided for within the implementing legislation.

We look forward to news of any further developments and would be happy to provide additional information if required.

Yours sincerely

Andy Egan
Research Officer

Last updated 1 November 2000