Advice - General / Employment status
It would seem at first glance that a freelance is by definition not "employed". But unfortunately there are details to get to grips with. These details have important consequences. They affect how much a freelance gets paid for doing a shift or other work paid by the day, deductions (such as tax and National Insurance) at source and whether they are entitled to paid time off. See "Shift payments - tax and time off", linked below, for a practical guide to those questions.
Since so many freelances and clients ask about the principles, this section discusses them.
Employed or self-employed?
Freelance journalists, whether earning money by selling licences to reproduce articles, photographs, audio interviews or films, or selling their time by working shifts as a reporter or subeditor, have historically enjoyed self-employed status. Some freelances working shifts or under short-term contracts, however, have found themselves "taxed at source" - that is, Income Tax and National Insurance are deducted from their fees as if they were employed staff.
This may have wide-ranging implications for the freelance in terms of their tax liability. An advantage of self-employment is that business expenses can be claimed as costs against gross income, reducing taxable income and hence tax paid. However, the self-employed have no entitlement to sick leave, maternity or paternity pay, or company pension provision.
It may also have implications for copyright ownership: see "Rights and why they are important", linked below.
So what makes you ‘self-employed’?
Being primarily self-employed does not necessarily mean you will be classed as self-employed for the purposes of any particular job you take on. Each job will be considered on its merit.
The Inland Revenue publishes guidelines, for Income Tax, but they do not cover every situation. There can even be variations among the ways that different tax offices interpret the legislation. Factors that make it more likely that a freelance will be accepted as self-employed include:
- that they provide services to several different clients and do not work for one to the exclusion of others;
- that they have a significant degree of control over how they carry out the work;
- that they take on financial risk;
- that they do the work on their own premises and equipment;
- the existence of a written agreement saying they are self-employed; and
- their being at liberty to hire someone else to do the work in their place.
No one factor is decisive.
In the legal jargon an employee is bound by a contract of service and a freelance is engaged under a contract for service. Consider the case of a car mechanic. If you hire them to fix cars in general, on your premises, and tell them how to do it, it is rather likely that you have employed them. If you take your car to them and merely require that it be returned fixed, that is clearly a contract for service (in both senses of "service"...)
(That last point about your having the right to "substitution" is indeed strange for freelance journalists. But it's a part of the =rules covering freelances in general.)
So there's no single answer?
No, there is not. Trickily, it is possible for the Income Tax and National Insurance offices and Employment Tribunals all to take different views of a worker's employment status with respect to a particular job.
For example, an Employment Appeal Tribunal ruling published in January 2006 held that someone who was engaged to do marketing for three years - but not instructed to do any task in particular - was entitled to claim unfair dismissal. This would not, however, bind the tax authorities either way. Some freelances contracted to write columns, for example, have negotiated compensatory payments when the contracts have been terminated, though these are not strictly redundancy payments.
A person can be self-employed while doing one job and employed while doing another, even in relation to the same company. Many employers/client companies are struggling with these concepts.
If you are unclear on your status, you should seek advice from the NUJ Freelance Office (having first joined the NUJ if you have not done so already).
Written statement of employment particulars
An employer must give employees and workers a document stating the main conditions of employment when they start work. This is known as a "written statement of employment particulars". See the link below - and remember that, as noted above, you can still be treated as "employed" for some purposes, as "a worker" for others and "self-employed" for yet others.
Part-time and agency workers
The general thrust of European Union legislation has been to grant certain rights to "workers" regardless of their employment status. This has been incorporated into UK law and still applies as of August 2021.
Workers who are employed or engaged by an agency that sells their services on must be treated no less favourably than the directly-engaged workers alongside them.
One practical outcome of this is that all freelances who work shifts are entitled to paid time off. When a freelance is being paid to license reproduction of a piece of work, rather than paid by the hour or the day, they do not generally qualify as a "worker". See the links below.
All workers, whether employed or contracted as freelances, are entitled to be accompanied at a disciplinary or grievance hearing by a companion of their choice. This includes a union rep or full-time official, even where the company does not recognise the union. This is yet another reason for joining the NUJ.
Text © Mike Holderness & previous contributors; Moral rights asserted. The collection (database right) © National Union of Journalists. Comments to firstname.lastname@example.org please. You may find the glossary helpful.
The National Union of Journalists must not, can not and would not wish to dictate rates or terms of engagement to members or to editors. The information presented here is for guidance and as an aid to equitable negotiation only.
Suggestions apply to contracts governed by UK law only. In any event, nothing here should be construed as legal advice.