BECTU response to DTI Fixed Term Work consultation

23 May 2001

Introduction (Q1-10)
1. BECTU's response as set out below follows the broad lines of the Reply Section in the Consultation Paper, without following every aspect of the suggested format.

2. As a trade union representing 26,000 members in the audiovisual and entertainment sectors we have a close interest in and extensive experience of fixed term contract (FTC) work. Between a third and a half of our membership is freelance - especially in the film industry and in independent production for television, where the labour market is overwhelmingly casualised. Many more of our members work on fixed-term contracts for broadcasters such as BBC and the ITV companies. Yet a further segment of our membership work on 'casual' and run-of-show contracts in theatres (and, increasingly, as casuals in call centre operations).

3. The repeated renewal of fixed term contracts and the (in some respects) inferior conditions available to many of these workers are all too familiar aspect of the sectors we operate in. Legislation to address these problems is therefore welcome.

   Comparators (Q11)

4. While strongly endorsing the principle of no less favourable treatment for FTC workers, we note the proposed use of comparators from among permanent employees in the same establishment and the rejection, as in the Part-Time Regulations, of the use of hypothetical comparators.

5. This approach would completely fail to deal with the situation of a number of our members for whom no permanently-employed comparators in the same establishment or company are available eg front-of-house workers in theatres; large numbers of freelances in independent film and TV production (who work for small production companies with a minimal core of permanent staff - albeit often commissioned by broadcasters with significant number of staff); freelances/FTC workers engaged directly by broadcasters in grades (eg make up artists, technical operators) where there may in some circumstances be no in-house comparators; technical and stage crew workers on run-of-show contracts in West End theatres.

6. A broader and more flexible approach including the use of hypothetical comparators (referring not just to the establishment/company but to the whole of the relevant industrial sector) is in our view essential if the FTC Regulations are to be applicable to such workers. We further believe that such an approach is compatible with Clause 3(2) of the FTC Directive in a way that the narrow approach in the Consultation Paper is not. From a practical viewpoint, we also note that the principle of hypothetical comparators is well established in sex discrimination law in the UK and has been operated successfully for many years.

   Term or package? (Q12)

7. We strongly favour the term-by-term approach to comparisons, as has been adopted on the Part-Time Regulations. This would negate any tendency for the contentious trading off of supposed advantages with disadvantages and would allow a more objective and verifiable approach to comparisons. To the extent that some freelances have an uplift on pay, this is at best an attempted compensation for the one thing they do not have - job security - and not a reason for accepting conditions which are inferior in other respects.

   Written statement (Q13)

8. We believe FTC workers should certainly be entitled to a written statement of reasons for the 'objective justification' of any less favourable treatment and note the proposal on this issue in the Draft Regulations.

   Pay/pensions (Q14)

9. We strongly believe that pay and pensions should be included in the scope of the FTC Regulations. Many of our FTC members suffer inferior treatment in these areas, for example:
   • In broadcasting, where pay banding is prevalent, many FTC workers tend to be paid at the lower end of pay bands and experience greater difficulty than staff in being placed higher in the pay bands.
   • Throughout broadcasting FTC workers are often in an inferior position regarding pension entitlements in respect of qualifying service (they need longer), of the type of scheme they may join (which may - either for a period or indefinitely - be money purchase rather than final salary), and of employer contributions.
10. We believe the inclusion of pay and pensions is consistent with clause 4(1) of the FTC Directive, with its reference to 'employment conditions' and that the Government's proposed exclusion is out of step with policy and practice in the rest of the EU, as well as inconsistent with its own (welcome) approach to the redundancy waiver. We urge that the draft Regulations be amended accordingly.

    Redundancy waivers (Q15)

11. Having earlier supported a member in a potentially landmark case on unfair dismissal waivers (BBC V Kelly-Phillips) we would strongly support the removal of redundancy waivers, which remain common contractual requirements in BBC and ITV.

12. We note that the Court of Appeal in the above case recognised the risk of abuse arising from both unfair dismissal and redundancy waivers and looked to a remedy through legislation. We believe the FTC Regulations are the opportunity to achieve this.

    Further comments on 'no less favourable treatment' (Q16)

13. We of course have many examples of less favourable treatment of FTC workers in respect of other conditions of service such as contractual sick pay, redundancy pay, maternity and paternity provisions, holiday entitlement and access to training.

    Renewals (Q17-18)

14. The repeated renewal of FTC's is a common feature in our industry. In the past, broadcasters (including both ITV and BBC) have been known to retain individuals on FTC's for periods of 10 years or even longer. This remains the position in ITV. While the position at the BBC has been improved by means of collective bargaining, it still stakes 3 years service (together with the prospect of at least a further year's work) for FTC workers to achieve staff status. Some independent production companies also engage individuals on rolling FTC's.

15. Our policy is to seek to limit FTC's to a maximum duration of 2 years before transferring to staff status. We look to the Regulations to impose a similar limit and do not favour the excessively lengthy period of 4 years. We also favour an objective justification test whereby the employer would have the burden of demonstrating why a contract should not be made permanent and providing a written statement to the individual concerned.

    Variation by collective agreement (Q19)

16. We would favour the voluntary option of varying the statutory renewal provisions - but only by means of collective agreements with independent trade unions and certainly not by means of individual opt-outs (which, in our experience, could turn into de facto compulsion to opt out).

17. Furthermore, we would want any variation to be underpinned by the right - subject to only a short notice period - to revert to the statutory provisions.

    'Successive' contracts (Q20)

18. We note, in the context of renewals, that the notion of 'successive' FTC's may be linked to the notion of continuity (of service). We fear that if short gaps in service (eg over a week) are held to breach continuity, then employers will simply, in many circumstances, adopt a practice of 'dismiss and rehire' so as to avoid FTC obligations.

19. We favour allowing longer gaps (eg the 8 weeks provision for SSP) without breaking continuity. Employers in our sector already dismiss and rehire in order to avoid employment protection or contractual obligations. We would not wish the FTC Regulations to be easily undermined in this way.

    Employment status (Q22)

20. We are very concerned that the draft Regulations are limited to 'employees' rather than 'workers'. We have a very strong preference for the broader and more inclusive term of 'worker', which has been used successfully in other recent employment legislation such as the Working Time and Part Time Workers Regulations. More importantly, the Fixed Term Contracts Directive itself refers to 'fixed term workers' throughout.

21. Our concern derives from the nature of our freelance/FTC members. A significant number of these are classified by the Inland Revenue as Schedule D, ie self-employed, and presumably might be argued as falling outside the scope of the draft Regulations as they stand.

22. In our view it is essential to include individual workers who happen to be Schedule D within the scope of the Regulations. Without such an inclusive approach, a large number of the 'atypical workers' who the FTC Directive is designed to help will be left without protection. Such individuals work side by side with PAYE FTC workers and staff on the same projects for the same companies (a factor which may make the restriction to 'employee' extremely difficult to apply in practice). In very many cases they have had no choice about working in this way since the independent film and TV production sector is overwhelmingly casualised. Indeed many such people have previously been made redundant by the broadcasters.

23. We accept that genuine small businesses should fall outside the scope of the Regulations. There is, however, a minority of Schedule D workers 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. This does not alter the fact that such individuals are simply and solely offering their own labour for hire and therefore should not, in our view, fall outside the Regulations. Beyond this, it bears repeating that most Schedule D workers do not have service companies and operate entirely as individuals.

24. We further believe that the limitation to 'employees' is a breach of clause 2(1) of the FTC Directive, which refers (as does the Part Time Directive) to those with an 'employment relationship' - a broader and more inclusive concept than just 'employees'.

25. We urge reconsideration on this point. Individual Schedule D workers operating in a casualised labour market with few opportunities to become 'employees' are classic atypical workers. To exclude them would be contrary to the spirit and intention of the FTC Directive. This should not be allowed to happen.

26. We have a separate and additional concern about the proposed exclusion of agency workers. We represent members not only who obtain work via agencies but also some who work through employment businesses (ie who are employees of the agency). We have taken a close interest in the still delayed Statutory Instrument on Employment Agencies and we note the promise of forthcoming European legislation on temporary agency work. In the light of the delay and uncertainty facing such legislation we would welcome confirmation that workers obtaining work via agencies (while not becoming agency employees) are definitely included within the scope of the FTC Regulations and, going further, see no reason why the Government should not introduce basic protections for temporary agency workers without an inordinate further wait for European legislation.

    Information on permanent posts (Q23)

27. We support the notion of a duty on employers to inform their FTC workers on vacancies for permanent posts. Existing practice in this respect is varied but we believe that the best examples of good practice - whereby such information is made widely available without restriction - should be generalised.

    Explaining the new regulations (Q24)

28. The Regulations in themselves will not provide clear and early understandable information to FTC workers. There is a strong need for additional 'user friendly' guidance. We would therefore like to see definitive guidance issued by the DTI itself, together with a statutory Code of Practice on implementing the Regulations. Without such an authoritative set of guidelines, we believe the benefits of the FTC Regulations will be curtailed by avoidable confusion and unnecessarily conflicting interpretations.

    Conclusion

29. We hope you will take note of our views, including our particular concerns on comparators and employment status. We would wish to see the FTC Directive implemented by means of Regulations which are positive and faithful to its spirit and intention, rather than restrictive and seemingly grudging. We believe such basic protections for atypical workers are indispensable in sectors where permanent contracts and job security are unfortunately no longer the norm for many workers. We look forward to the further progress of the consultation.