The Freelance Deal: 1. Employment Rights, Tax and Pensions

This is the first draft of the policy document that has been agreed by the Tax, Employment Rights and Pensions Working Group of London Production Division (LPD) on the 7th May 2020. It is a contribution to Bectu’s proposed ‘New Deal for Freelancers’ campaign, and until formally agreed it should only be distributed to people who have been formally nominated as Branch Representatives of a London Production Division branch. It is also circulated the Branch Representatives of the Regional Production Division for information.

Our proposals here are about mitigating the risks that are unfairly applied to freelance and precariously employed workers, but we believe that there needs to be wider, nationwide discussion about wholesale reforms designed to eliminate these kinds of risks from the economy and we welcome the emerging discussions about ‘a new social contract’. We will work to ensure that freelance and precarious working practices form part of that debate.

A New Deal for Freelance and Precariously Employed Workers in the film & TV sector.

Freelance Tax

Our highly successful industry is heavily reliant on self-employment for its success. For workers to achieve their fair share of the success that they contribute to there needs to be a more meaningful dialogue with the tax authorities. The legal and tax settlement covering different kinds of self-employment needs revisiting. The problems with this settlement have become starkly apparent during the Coronavirus crisis which has left many freelancers without any income for long periods of time.

Many people who are “Freelance PAYE” workers have the tax-burdens of PAYE employees with few of the employment rights. Many of the employment rights that they do have, in theory, are unenforceable in practice and this must change.

Too many workers are encouraged to work through limited companies when it is not appropriate to do so. They are often even spoken of as ‘tax-avoiders’. This understanding among policy-makers and the public needs to change. Our industry needs to take steps to ensure that no one is pressured to do this. Many of the people who are trading in this way do so in the mistaken belief that it is in their self-interest to do so (often following advice from accountants). We need a public information campaign to help everybody who works in this way to understand this issue a lot better.

Many other self-employed sole traders are exposed to huge risk with a very poor ‘safety net’ to protect them. We need tax categories to be revisited to ensure that they are appropriate to freelance working models. We believe that we need a national and / or industry-wide settlement that can protect the incomes of all freelance and precariously employed workers during periods in which they are unable to work.

A number of sectors of the economy need to have an industry specific settlement that ensures everyone is paying their fair share of tax and that there are industry-specific means of calculating pre-tax earnings – both for applying tax-rules while also allowing government to put fair income-protection measures in place. It is important that Cultural Sector workers should not inappropriately impacted by any necessary changes that are needed to challenge inappropriately ‘disguised employees’ (for tax purposes), and to protect, and provide enforceable employment rights, in the wider ‘Gig Economy’ as our sectors have industry-specific needs.

Fairer risk sharing

Many sectors of the creative industry have pushed an unfair share of the business risks onto companies that have work outsourced to them, and even onto individual freelancers. It results in a lack of a coherent industrial policy in these vital sectors, resulting in capacity and training shortfalls that damage the economy. We can no longer have a situation where people working as freelancers on a hugely successful production are not paid because the company that has completed an outsourced contract has gone into administration.

This creates a climate of fear, and job-insecurity which results in a race to the bottom in terms of pay, and working terms and conditions. Many working terms and conditions in this sector are patently one-sided. Everyone in this successful industry should be paid for every hour worked, and we call for an end to ‘buy-out’ contracts which result in excessive hours of unpaid overtime.

Job security

We believe that employers often demand more ‘flexibility’ from workers that they actually need for the effective running of our industry.

This insecurity also results in a constant fear of imminent unplanned unemployment. It also has the by-product of legitimising a working culture in which bullying and harassment is more prevalent. When a freelancer accepts work on a production, they will often turn down other offers on the understanding that their contract will last for an anticipated period of time.

An unexpected cancellation or early dismissal can therefore result in a long period of unemployment, and risks related to this occupational hazard needs to be shared more fairly between workers and employers. If contracts of employment, and the terms that they contain, are issued further in advance of a start-date, industry-standard cancellation clauses can be developed, and become relevant. In some cases, terms are not even agreed before work commences, and this must change. Improvements to contractual notice periods, and fairer dismissal and disciplinary terms can also ensure that this climate of fear is reduced.

We need an end to the over-reliance on ‘Daily’ worker contracts where longer contracts could be offered, and, with more investment in production planning, ‘Dailies’ should be turned into full members of the crew at the earliest opportunity.

Ending the failure of freelance pension provision.

In addition to the concerns Freelance workers in Film and TV have about employment rights, and taxation rules, we are also concerned about the lack of pension provision that many in the industry have. On average, workers in our industry have chronically under-funded pensions.

Unlike people in full-time employment, few people in our sector have a nominated Pension scheme that employers are consistently paying in to. We are calling on our industry to ensure that higher employer contributions are made, and that wherever possible, they are using the same approach, and a single industry agreed pension provider so that workers can start to build up a viable pension-pot.


This entry was posted in Employment Contracts, Employment Law and Rights, Employment status, Freelance working, Freelancer rights, Gig economy workers, IR35, Long hours, Management, Pensions, Personal Service Companies, Skills & capacity, Tax, Welfare and benefits, Wellbeing, Work-life balance and tagged . Bookmark the permalink.

Leave a Reply

Your email address will not be published.