All Party Group for the Freelance Sector: BECTU submission

10 April 2008

1. BECTU welcomes the establishment of the All Party Group. We set out below the key issues and concerns affecting our freelance members.

BECTU freelances

2. BECTU is the trade union for workers (other than performers and journalists) in the audiovisual and live entertainment sectors. Over 10,000 of our members are freelances or in casual employment.
3. The industrial context is that the audiovisual sector (ie broadcasting, film, independent production for film and TV, commercials, corporate production, music videos etc) operates with a shrinking core of permanent employment (concentrated in the major broadcasters) surrounded by the growth of contract working (on contracts ranging from a few days to 1 or 2 years) and beyond that by a long-established and growing freelance labour market. Outside of broadcasting, freelance working is predominant and has long been so. In theatres and live entertainment there is a parallel feature of casual employment ie workers employed on an occasional and uncertain basis to supplement permanent staff.
4. Among those freelance workers, some are characterised (on the basis of grade or occupation) as PAYE employees, some are 'Schedule D' self-employed workers and some move between the two categories as they move from job to job. A minority obtain work through agencies - although they are not agency employees but are engaged directly by the production companies. Another minority work through service companies or partnerships.
5. BECTU therefore represents thousands of genuine freelances and has decades-long experience of their needs and requirements. Please note, however, that we have a different perspective to many self-appointed lobby groups for freelances - who often use the terminology of 'consultants'. We share some common concerns with such groups - eg on tax status. But we have radically different perspective on rights at work since we strongly contend that our freelance members are or should be - for purposes of employment law - classified as 'workers'. Our freelances do not see themselves as having separate or even opposed interests to other permanent and contract workers but as sharing very similar concerns.

Tax status

6. As indicated above, we represent freelances with self-employed ('Schedule D' in old terminology [We refer to Schedule D in this submission, as this is still a common term for lay people even though, strictly speaking, no longer used by HMRC]) tax status, freelances with PAYE tax status and freelances who move between these categories as they go form engagement to engagement.
7. Most (though not all) of our freelance members would prefer Schedule D status. We have therefore, since approximately 1983, been engaged in a long process of discussion with HMRC on tax status issues in the audiovisual sector. Out of this has emerged a list of grades or occupations accepted as Schedule D by HMRC (sometimes with conditions attached eg supply of equipment). However, in a complex and technologically developing industry, there are continuing calls for amendments to the list because of the emergence of new occupations and new ways of working.
8. As a side-effect of this process, a landmark test case involving one of our members (Ian Lorimer) resulted in an additional provision for special or Lorimer letters - by which HMRC acknowledge an individual's Schedule D status by virtue of their business-like organisation, even though their grade is not on the Schedule D list.
9. We continue to hold discussions with HMRC on tax status, NI status and tax allowance issues.

Freelances as workers

10. As indicated above, our freelance members see themselves as 'workers' for purposes of employment law. We maintain that Schedule D freelances fall into the category of economically-dependent workers. They are not entrepreneurs who create their own work; they are entirely dependent for work on the employers operating in the casualised, freelance audiovisual labour market. They have autonomy at an individual level in the way they perform their job (thereby justifying Schedule D tax status) but at the sectoral level they are completely dependent on the prevailing terms and conditions ultimately set by the companies and are - unambiguously - economically dependent 'workers'. In consequence, the classic freelance experience is not of independent choice and autonomy but of chronic insecurity.
11. There is, however, a significant problem for Schedule D freelances in terms of employment status. The problem is that UK labour law - which confers some employment rights on 'employees' and some on a broader category of 'workers' - effectively excludes Schedule D freelances from any clear and unambiguous access to employment rights. For such freelances, this has the particularly unfortunate affect of denying them access to rights under the Working Time Directive (an issue on which some members have sought to take cases to Employment Tribunals and been refused access on the grounds that they are not 'workers'). BECTU has consistently sought to remedy this anomaly by supporting relevant Tribunal claims and by winning a benchmark statutory recognition claim at the Central Arbitration Committee. We have also presented evidence to the former DTI's long-running consultation on employment status and more recently to the European Commission Green Paper on Labour Law consultation. So far, however, there has not been any definitive solution to the problem.
12. This results in a situation in which Schedule D freelances may be denied access to key employment rights which remain available to PAYE freelances and staff colleagues even when they work side by side for the same companies on the same productions and under the same collective agreements.
13. We therefore continue to argue that UK employment law should be revised to incorporate a single new and inclusive definition of 'worker' determining access to employment rights, with a statutory presumption of coverage for all workers and a burden of proof on companies to demonstrate that an individual is not a 'worker'.

The long-hours culture

14. A characteristic feature of the freelance-labour market is long-hours working. Daily hours are commonly 12 hours or more and weekly hours are 60 hours or more. The problem is compounded by the insidious practice of employers routinely issuing upfront contracts containing an opt-out clause from the maximum 48-hour week. Most freelances feel they have to accept the opt-out rather than object and risk losing the work. The opt-out has in effect become compulsory and constitutes an abuse of our system of working time regulations. In common with the TUC and many other unions, we have long lobbied the UK Government and the European Commission for an end to the opt-out provision in the Working Time Directive.
15. A specific and dangerous consequence of long-hours working arises for workers who have to drive home at the end of an excessively long working day, often from a location a considerable distance away. We have had instances of members suffering injuries in road traffic accidents arising from fatigue (as well as many other near-misses). We continue to lobby for specific requirements on employers to provide alternative options of transport home or accommodation.

Vulnerability to exploitation

16. In one sense all freelances - as economically dependent workers - are vulnerable to exploitation by the companies which engage them. Some groups, however, are particularly vulnerable.
17. Specific problems arise for a minority of freelances (most typically, film/TV extras) who work through agencies. These include upfront fees (ie agency charges prior to even finding any work for these individuals), book fees (charges for totally unnecessary 'casting books' which are essentially promotional items for the agencies rather than the workers themselves) and delayed payments by agencies (ie a delay in passing on earnings to workers from production companies). All of these practices ultimately derive from these workers' weak position in the labour market and their fear that non-compliance will preclude any future offers of work. The result is that they are permanently at risk of falling below national minimum wage levels. However, despite lobbying by BECTU and others, the new Employment Agencies Regulations for the Entertainment sector do not ban upfront fees or book fees. Nor, unfortunately, do they reintroduce the licensing of such entertainment agencies.
18. There is a further problem of low pay arising for workers falsely characterised as 'volunteers' who, in our view, should be paid at least the national minimum wage. This particularly affects the most junior occupations in freelance film and TV production eg those of 'runner' (who fetch and carry messages/materials, run errands, obtain refreshments etc) or 'receptionist'. There is sometimes an alleged training element - but with a complete absence of any training structure or context. This is, unequivocally, the exploitation of young people desperate to gain a foothold in the film/TV sector.
19. A parallel problem of unpaid, bogus 'volunteering' affects film/TV extras who are recruited outside of the normal channels for this occupation and who may be attracted by the superficial glamour of working on a film/TV set.

Health and safety

20. A final but significant factor for vulnerable freelance workers in this sector is the lack of safety-representation, especially on wholly freelance projects. On such productions there is no ready-made system of safety reps and no time to construct one. This is compounded by the varied employment status of the workforce, which means that the eligibility of self-employed freelances to be safety reps can be called into question.
21. The consequence is that the whole film/TV independent production sector functions without any effective system of safety representation. This is particularly undesirable in view of highly-pressurised nature of freelance project work; of the tendency to work long hours with tight deadlines; and of the frequent use of temporary, improvised workplaces ie locations rather than studio work.
22. This could be resolved by an amendment to Regulation 8 of the Safety Representatives and Safety Committees Regulations to allow BECTU (along with Equity and the Musicians Union) to provide safety representation by means of roving safety reps or, if necessary, by full time officials.

Conclusion

23. As discussed above, we have a number of serious, ongoing concerns for our freelance members - on tax status, employment status, long hours, vulnerable groups (eg young workers, workers using agents) and lack of safety representation.
24. We continue to advocate specific solutions, including:
    • A new definition of 'worker' for employment law purposes.
    • An end to the opt-out from the Working Time Directive and a ban on the inclusion of opt-out clauses in upfront contracts.
    • A ban on upfront fees and on book fees for film/TV extras together with stricter control of delayed payments and the reintroduction of licensing for entertainment agencies.
    • An amendment to the SSRC Regulations to provide for roving safety representatives in our sector.
25. We hope that the All Party Group will take note of our concerns and we would be prepared to give oral evidence to the panel.