EU Services Directive: BECTU response to TUC

8 December 2005

At your recent meeting with the FEU, we emphasised the vulnerability of the freelance labour force in the audiovisual/cultural sector to the implications of the Directive. The sector is particularly reliant on industry norms to set minimum employment standards and these in turn underlie the sector's ability to rely on a highly skilled labour force that allows us to compete internationally in the audiovisual world market. If these industry norms are undermined - eg by the country of origin principle (COOP) - we risk losing the skilled labour force which is, by common consent, our key asset in this competitive international industry. We agreed to provide further information in addition to the general arguments for the exclusion of the audiovisual/cultural sector (see my letter to you of 23.3.05) and of employment law from the Directive. BECTU's view is as follows:

• A distinctive feature of the audiovisual sector is the prevalence of freelance working, both in film and in broadcasting. The freelance labour force encompasses both workers with employee/PAYE status and also those with self-employed/Schedule D status (as well as many who move between the two). The Government's long-awaited review of employment status (in which we argued for a new inclusive definition of 'worker' to include all these economically-dependent individuals) has still not been concluded. This means that self-employed freelances in particular remain vulnerable to the COOP. Even an exclusion of employment law would not protect individuals whose position under domestic employment law remains extremely uncertain and who cannot, for example, always rely on being able to assert working time rights.
• Freelance pay and working hours are set according to industry norms which change over time and adjust according to the nature of the project being worked on (eg a feature film, an independent production for broadcast, a commercial) and to the grade or occupation of the individual concerned. Against this background, there is a 'going rate' of pay and a set of practices on working hours which underpin the freelance labour market. If these were to be undermined by an influx of workers from outside the UK, operating to different and inferior standards on pay and hours, there would be severe consequences for our domestic labour force and - in a labour intensive industry - for our ability to maintain a strong UK audiovisual production sector. This is a real and present danger - and I attach an example of a recent pitch for work in the set construction sector from an organisation called 'Multihands' based in Hungary.
• The key point is that the UK audiovisual sector currently benefits from the asset of a highly-skilled, world-class labour force which allows us to compete successfully in this international market. The significance of this skills base has already been recognised by the Government through its support for Skillset (our Sector Skills Council), for the Film Skills Strategy, for the pending introduction of a statutory training levy in the film sector and for a long-established voluntary levy in the independent production sector. The underlying argument which justifies this strategy has been that the UK relies on having a critical mass of highly skilled workers in order to retain our presence in an international and technologically fast-changing market. Without this critical mass of skilled workers we would not be able to produce culturally-British audiovisual products which benefit UK audiences and allow us to compete internationally for sales and for inward investment.
• It would be highly ironic if the Services Directive was allowed to undermine this key asset of a skilled labour force just at the time when the Government has announced - in the Pre-Budget Report - a set of strong fiscal incentives for UK film production, which are specifically geared (through the 'culturally-British test') to the encouragement of audiovisual production made by skilled 'cultural practitioners'. In our view, a joined-up approach to this issue is therefore essential.

In conclusion, we strongly believe that the Services Directive should not be allowed to undermine the industry norms which underpin our skilled sectoral labour force. We believe that freelances, especially self-employed freelances, remain particularly vulnerable - even if there is an exclusion of employment law. We hope that the Government will take note of these arguments - both during the formulation of the Directive and during any eventual implementation. We would be grateful for the TUC's assistance in bringing these arguments to the attention of relevant Ministers.