Guide to working with freelancers

Transcription

1 Guide to working with freelancers

2 02 Guide to working with freelancers Guide to working with freelancers Introduction The term free lance was coined by Sir Walter Scott in 1819, in his novel Ivanhoe. But far from being an historical reference, the growing use of freelancers is seen as the way forward by many in the industry. Freelancers offer you the opportunity to have flexible control of your overheads, to overcome resource issues, to up-skill your team quickly, to bring in the talent to match your project requirements and to add an extra spark to the creative process. The positives are many. But so are the risks: murky copyright issues, problems with quality and insurance cover, and potential costs to your business to name but a few. Even if you re a seasoned freelancer fan, its worth having a refresh on how to get the very best from the relationship and to protect your agency from any costly repercussions. We asked DBA members Clock Creative, The Design Group, Factory Design, Good Creative and Thompson Brand Partners for their top freelancer tips and DBA lawyers Humphries Kirk for all things legal on this issue. Here s the low down: Finding the right freelancer Good freelancers are often unavailable at short notice, so wherever possible, spot the bottlenecks as they loom and try to plan and anticipate requirement. Building a pool of trusted experts and having enough of them in each role will give you more options when you need the resource most. Negotiate hard on their rates in exchange for regular work. Good recruitment agencies usually have got good people on their books. The hefty agency levy can be justifiable if you get the right person, but if you re working with an agency, make sure you clear up any fee issues straight away. Getting the most out of them It s advisable to get references and meet the freelancer in person (even with overseas freelancers and contractors) before hiring. Also factor in that it can take some serious time for freelancers to get hold of the way things are done at your agency, especially regarding quality. What passes for the right job, is bound to vary from place to place. You need to ensure they are briefed well - it needs to be at least as good as the usual internal briefing if not better. Follow the theory you get what you give. And have regular check meetings. Freelancers work on a clock and they bill time, not quality, so what you get is up to you. Wherever possible consider the freelancer working inside the business so they are part of the wider project team, soaking up strategic thinking, brand essence and the broader integrated approach. And when you can t physically do this with overseas freelancers, have regular Google hangout/skype instead, to keep them informed and to ensure dialogue is not just via . Treat the freelancer well, whilst they re with you and make them feel involved. After all, they re one of the team. And don t isolate them as they often feel used and abused when people just see them as hired gun. Freelancers don t half spread the news of the agencies good and bad, so make them happy and they ll do their best work and spread the right stories. And where appropriate, make sure you use the opportunity to learn from an expert and to broaden the teams knowledge and experience. Not being confined by the internal systems,

3 03 Guide to working with freelancers they can bring a really fresh eye to the proceedings and add an extra spark to the creative process. Freelancer rights A further positive of hiring freelancers is that they have limited statutory rights as they are not an employee. They are generally not entitled to rights on termination of employment, including the right not to be unfairly dismissed and the right to receive a statutory redundancy payment. If you choose to hire freelancers after making redundancies, you must be careful to avoid unfair dismissal claims from former employees who may feel their role was not redundant. To ensure this doesn t happen, consult with your solicitor during the redundancy process. Remember you are entitled to run a business and a genuine redundancy does not mean that you cannot then outsource the work. It s worth bearing in mind that an employee has 3 months from termination to make a claim. The rights employees have which self-employed workers don t, include the right not to be unfairly dismissed, the right to a written statement of terms, statutory sick pay, protection against unlawful deduction from wages, payments on insolvency, remuneration during suspension on medical grounds, minimum wage, paid annual leave, rest breaks, maximum working week, protection on the transfer of undertakings etc. The situation regarding working hours, rest breaks and paid holiday is more complicated because these rights are given to "workers" so make sure you re clear on these and how they affect your freelancers. And be aware that discrimination laws can still apply. Defining self-employed It s imperative to establish that the freelancer is actually self-employed as determined by employment law otherwise your agency could come a cropper, with the taxman seeking to recover the higher levels of tax direct from you rather than the freelancer. As a general guide as to whether a worker is an employee or self-employed; if the answer is 'Yes' to all of the following questions, then the worker is probably an employee: Do they have to do the work themselves? Can someone tell them at any time what to do, where to carry out the work or when and how to do it? Can they work a set amount of hours? Can someone move them from task to task? Are they paid by the hour, week, or month? Can they get overtime pay or bonus payment? If the answer is 'Yes' to all of the following questions, it will usually mean that the worker is self-employed: Can they hire someone to do the work or engage helpers at their own expense? (Right of substitution) Do they risk their own money? Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves? Do they agree to do a job for a fixed price regardless of how long the job may take? Can they decide what work to do, how and when to do the work and where to provide the services? Do they regularly work for a number of different people? Do they have to correct unsatisfactory work in their own time and at their own expense? Make sure you have a formal agreement in place confirming the freelancer is self-employed including their self-employed tax reference number, which the taxman is keen on asking for.

4 04 Guide to working with freelancers It's also important to get your workers' employment status right because it affects the way tax and National Insurance contributions (NICs) are calculated for them and it determines whether or not you have to operate PAYE (Pay As You Earn) on their earnings. In fact, if your freelancer is only working for you, then it is an indication they may be an employee and their self-employed status may be challenged. If this is a likely scenario, you could ask the freelancer to form their own Limited Company an example of this being the relationship between Jeremy Paxman and the BBC. If they are found to be behaving like an employee then it s their company that pays NIC etc, not you. Freelancer contracts and agreements Contracts are everything for a successful freelancer relationship. Don t engage with a freelancer before legal documentation has been signed. The paperwork should cover: The scope of the job Scheduling demands The expectations of both parties Time frame and the period the contract covers Deadlines Cancellation clause - Notice, breach, insolvency etc Clause about revisions and alterations Freelancer responsibility for own Income Tax PAYE and National Insurance Indemnities - against tax and possible other issues Warranties - originality, not infringe third party rights etc Assignment of intellectual property - critical Insurance maintenance Confidentiality Pay No obligation clause - Company not obliged to offer any work and the freelancer not obliged to accept any offers (if no mutuality of obligation in respect of work). Abide by reasonable requests Freelancer right to substitute another person (this is not popular) Freelancer use reasonable care and skill Duty of faith to company and clients Retention of fees if there is a problem Dispute resolution It is typical to have an agreement with a freelancer which enables you to request work in a purchase order which gives specific deadlines and cost for that piece of work. The agreement will cover the overall contractual relationship between the parties with there being flexibility for the freelancer to refuse work offered (this is a distinguishing factor from an employee). If you ve engaged a freelancer and the client pulls out at the last minute, you need to have clear rights to cancel the engagement to cover this, otherwise you may have engaged a freelancer to do work that is no longer required and be burdened with the costs of that. You need the same flexibility over the freelancer as the client has over you. The nature of the relationship means less loyalty may be involved so also make sure robust confidentiality clauses are in place in the contract. Always get them to sign a NDA and freelancer agreement setting out your legal position on copyright, IP, etc. This is because copyright is owned by the author unless the author is an employee acting in the course of employment, in which case the owner is you, the employer. If a freelancer creates work in which copyright subsists then an assignment of that right in writing, signed by the parties, should always be obtained. This should be in your contract of engagement with the freelancer. There are similar rules for other intellectual property rights so great care is needed in this area. And for due diligence, when you re creating a logo and using a freelancer, encourage the client to trademark it or alternatively, trademark it to the client yourself. Make sure the freelancer has some form of due diligence too. Very few actually copy, but it can happen subconsciously.

5 05 Guide to working with freelancers And don t forget your insurance. Insurance policies often maintain that subcontractors and third parties must be engaged on similar terms as the person contracting with them has with their client. If your contract with your client entitles you to keep certain information confidential, maintain insurance policies up to a certain amount, give warranties (for instance on the originality of intellectual property) and indemnities then you should engage your subcontractor on these terms. Each policy of insurance needs to be understood and checked to see if they give any direction as to how freelancers/ contractors etc are to be engaged. If you need further advice around the use of freelancers/contractors, your DBA membership entitles you to free advice from: Humphries Kirk, the DBA s legal partner Tel: Croner Consulting, the DBA s business management helpline Tel: With thanks to the following for their contributions: Ann Rimmer, Clock Creative Jerry Hall, The Design Group Peter Tennent, Factory Design Keith Forbes, Good Creative Darrell Stuart-Smith, Humphries Kirk Ian Thompson, Thompson Brand Partners