Memorandum by (BECTU) Broadcasting Entertainment
Cinematograph and Theatre Union
1. BECTU is the British trade union for
all workers in the audiovisual and live entertainment sectors
(excluding performers and journalists)—encompassing creative,
craft and administrative occupations. We welcome the opportunity
to respond to the EC Green Paper which is of particular relevance
to the freelance workers who constitute almost half of our membership
(as well as to casual workers in the theatre sector). Our response
will, of necessity, focus on the issues of most significance for
our members—and therefore particularly on the issue of legal
uncertainty on employment status (Q7/8). We have not responded
to questions of less relevance to our members.
Q7: Legal definitions of employment and self-employment
Q8: Is there a need
for a "floor of rights" dealing with the working conditions
of all workers regardless of the form of their work contract?
2. While the phrase "floor of rights"
has the unfortunate connotation of minimum standards, we believe
this question, and the related section of the Green Paper on "Uncertainty
with regard to the law" encompasses the issue of greatest
concern to us—which the employment status of our freelance
members and specifically of our Schedule D freelances (see para
11). The UK Government held a very long running consultation on
employment status leading effectively to an outcome of "no
change" on the problems of most concern to us. We therefore
welcome the opportunity for a debate at European level on the
same issue.
3. BECTU has approximately 10,000 freelance
members who work in areas such as independent production for film
and television; in commercials, music promos and corporate audiovisual
production; and directly for broadcasters. While the broadcasters
have a shrinking core of permanent staff, the rest of the audiovisual
sector is overwhelmingly freelance. The amount and nature of work
obtained is unpredictable. These are all classic atypical workers.
4. Within this freelance labour-pool there
are two categories: those whose employment status is as employees
and whose tax is deducted at source (PAYE), and those who employment
status is sometimes as workers and sometimes unclear and whose
tax status is self-employed (Schedule D). We are adamant that
it is unacceptable for tax status to dictate employment status.
However, in the current uncertain situation, tax status does provide
a useful shorthand to distinguish these two groups of freelances.
In this document we will therefore refer to "PAYE freelances"
and "Schedule D freelances".
5. The problem is that UK labour law—which
confers some employment rights on "employees" and some
on a notionally-broader category of "workers"—effectively
excludes Schedule D freelances from any clear and unambiguous
access to employment rights. For freelances working in a characteristically
long-hours sector, this has the particularly unfortunate effect
of denying Schedule D freelances access to any rights under the
Working Time Directive (an issue on which some of our members
have taken cases to Employment Tribunals and been refused access
on the grounds that they do not count as "workers").
Other rights are of course also affected (including the sometimes
important right to claim 8-weeks back pay in situations of employer
insolvency and the right to appoint safety representatives). Lack
of access to such employment rights is a fundamental problem (and
also means, in our view, that EU Directives on employment rights
are not being consistently applied).
6. The problem is made more acute since:
— Schedule D freelances often work
side by side with PAYE freelances and with broadcasters' staff
on the same projects in the same locations and under the same
collective agreements.
— Very many of these workers are not
freelance by choice. There are simply no permanent jobs in large
parts of the UK audiovisual sector and a shrinking number of permanent
jobs even in broadcasting—with many former staff members
being made redundant and forced to transfer to the freelance labour
market. They are prime examples of the "unemployment push"
noted in the paper (page 102) by Professor Perulli referred to
below.
— We note that our Schedule D freelances
form part of a much larger number of workers in the same category.
As the Green Paper indicates (p8), "Self-employed workers
in the EU -25 numbered over 31m in 2005 or 15 per cent of the
total workforce'. We strongly suspect that the problems experienced
by our workers are also experienced by many workers in other sectors
and other member states.
7. We note with interest that the Green
Paper refers (p11) to the concept of "economically dependent
work" which falls "between the two established concepts
of subordinate employment and independent self-employment."
However, the Green Paper's reference (p11) to the UK's "targeted
approach" appears to miss the point that Schedule D freelances
count neither as "employees" nor as "workers"
in the UK.
8. We further acknowledge that Professor
Perulli has investigated this concept at greater length in his
EC-sponsored paper "Economically dependent employment: legal,
social and economic aspects". We note from his analysis that:
— The lack of clarity in employment
law definitions is leading to a growing trend whereby "protective
legislation is facing a problem of `defocusing'" (p31).
— "Economically-dependent workers
are currently included in the self-employed category" and
they "must not be confused with false self-employment"
(p76).
— A recent EIRO study has found that
economically-dependent work is most widespread in the service
sector, specifically including the media (p92).
— The ILO has proposed extending the
scope of employment law to cover "relationships other than
subordinate employment" (p96).
— Economic dependence should encompass
criteria such as that the work is performed personally (p98) and
that there is no contact with the end-market (p105).
9. We believe that Schedule D freelances
such as our members fall clearly 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 this labour market.
10. However, we strongly disagree with one
aspect of the concept of "economically-dependent" as
described in the Green Paper ie that they remain "dependent
on a single principal or client/employer for their source of income"
(p11). Schedule D freelances such as our members may work for
many different clients/employers in any given year. They remain,
however, completely dependent on the prevailing terms and conditions
in this freelance labour market. They cannot set their own terms
and have to operate within the rates already set. Their ability
to negotiate truly independent terms is non-existent for all but
an elite. The notion that their ability to work for more than
one employer implies economic independence is therefore a complete
fiction. Schedule D freelances move from engagement to engagement
and company to company not out of independence but necessity.
The classic freelance experience is not of independent choice
but of chronic insecurity. They are, unambiguously, economically
dependent workers.
11. With this amendment, we accept that
the concept of economically-dependent worker, as referred to in
the Green Paper encompasses our Schedule D freelance members.
We believe that EC labour law requires reforms in the following
way to overcome the problems faced by such workers:
— There should be encouragement for,
new, inclusive definitions of "worker"—to be developed
and applied by member states—encompassing such economically-dependent
individuals.
— Any such definition should give access
to the full range of employment rights, specifically including
working time rights. We recognise that some rights might still
be subject to a period of qualifying service.
— There should be a statutory presumption
of coverage for all such workers. In the event of a legal dispute,
there should be a burden of proof on the employer to show that
an individual is not a "worker".
12. We believe it is vital to approach
this issue in this way ie, by "equalising up" so that
Schedule D freelances become eligible for full access to the range
of employment rights enjoyed by those currently defined as "workers".
We would be strongly opposed to setting an inferior and lower
floor of rights for economically dependent workers. We believe
this would be unjustified and would merely offer unscrupulous
employers a means of watering down rights for existing workers
rather than improving the position of economically-dependent freelances
ie an equalising down in the form of a race to the bottom tier
of employment rights.
13. NB: All of the above arguments are also
potentially applicable to casual workers in the theatre and live
entertainment sector. We therefore call for the same approach
in relation to this group ie their inclusion within a new definition
of "worker" with access to the full range of employment
rights.
14. We further acknowledge that, in parallel
to the whole issue of employment status, there are connections
to issues of tax/social insurance status. Our view on this is
very clear. We believe employment status issues should be resolved
solely through reform of labour/employment law. We believe any
attempt at a linked reform of tax/social insurance law would have
such complex and far-reaching implications in other areas that
it would, in effect, stall the whole initiative. We therefore
believe that there should be no call, arising from the Green Paper
debate, for any consequential reform of tax/social insurance law
(even if, as a result, there are some residual anomalies).
15. In stressing the need to address employment
status issues solely by means of labour law, we also take the
view that the introduction of competition law into this area (eg
on the matter of collective agreements encompassing freelances)
is wholly inappropriate. Competition law and competition authorities
should, in our view, not seek to interfere in this area.
29 March 2007
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