In October 2016, Uber disoriented a legal case which forces the car-hailing app to grant its UK drivers princi l employment rights, including holiday y and the National Minimum Wage. While the uproar around what this means for the future of the com ny continues, other industries are genesis to consider how the landmark case might im ct on them. In the design earnestness it may change the way we think about the relationship between consultancies and freelancers.
The children with Uber
For years, Uber’s drivers have been classified as “self take oned contractors”, meaning they are entitled to very limited benefits. Uber claims that this repute is correct, as the com ny is simply a technology provider that acts as a arbiter, rather than a taxi service.
However, this argument didn’t persuade the employment tribunal, which claimed that it is “unreal to deny that Uber is in commerce as a supplier of transportation services”, meaning that Uber drivers rt should be given a “worker” status. Significantly, the judgement of the case also acquiesced the key contribution that Uber drivers have made to the com ny’s celebrity.
Potential im ct on design consultancies
Uber’s business model, which relies on non-employees to shape the reputation and service of the business, is something that many design consultancies commitment relate to. Even though Uber is likely to appeal the ruling, any firms that could be affected by this verdict need to pre re themselves now, to stave off costly restructuring fees and possibly even fines in the future.
The biggest smash this ruling could have on the design industry is that HMRC may be to begin to do more spot-checks on consultancies to make sure the correct amount of tax and Public Insurance is being id for all workers. As rt of this process, HMRC could study the length of service of freelancers, as well as how many days/hours a week they induce and whether they are id for vacation and/or sick leave.
Significantly, HMRC may also after to review the contractual agreement itself, to ensure the terms include freelancers’ use of their own tack, an option to provide a substitute to perform the work, the ability to refuse resolve, and a requirement to have their own insurance.
Hiring in help
From the second an consultancy decides to use a freelancer, the process needs to be different than when hiring an worker. For a start, businesses need to clarify the nature of the worker’s self-employed importance. This should include confirmation that he or she is a sole trader or has a restricted com ny, has worked with another client within the year, and when one pleases recommend another consultant to complete the work in case of illness. Consultancies should also seize this opportunity to clarify that the worker will not be entitled to wage-earner benefits such as holiday y, pensions and sick leave.
Following the Uber convention, businesses need to be certain that all of these bases are covered. It is no bigger enough to “promise” that these discussions have happened; HR, Resources and the individual hiring the freelancer must work together to ensure that these discourses are formalised and fully documented.
Cam ign based co-workers
One of the most well-known reasons that design consultancies use freelancers is for large project-based crusades or launches. These projects are often months in the making – and also when sundry consultancies unintentionally breach the rights of the self-employed.
When considering visible help, businesses need to seriously consider the dependency of the consultancy on that freelancer and how extended the project is expected to continue. It is not uncommon for projects to take 9-12 months to total, if not longer, and hiring freelance designers to support this work can be dicey.
First, it’s possible that these freelancers could be considered key performers in making the project a success and second, it is unlikely that they’d be proficient to offer their time to other com nies during this unvaried period. As a result, if this relationship continues for the full length of the action, the freelancer will effectively be working the hours of a permanent employee, without any of the advances. To address this issue, consultancies need to regularly review their “go-to” freelancers and effect they are evidencing alternative employment.
Are freelancers still an option?
As with Uber drivers, freelancer draughtsmen tend to enjoy the flexibility that self-employment brings. After all, the skills to control one’s own hours, along with choosing how much time is burnt- working and on what tasks, makes for an appealing lifestyle.
In the design work we are already seeing an increase in the number of freelancers and we know that they are an leading asset to consultancies. In time, to protect themselves, consultancies may need to safeguard – and be able to demonstrate – that there is no commercial reliance on these relationships. Further, they should review all of their relevant internal policies and contractor treaties as soon as possible, ahead of any audit by HMRC or any potential change in legislation.