Freelance Vs Employee advice.

[fastfences]

Hi all,
The 'sticky' thread about 'Going Ltd' recently touched on Freelance Vs employee in relation to a hairdressing salon. i guess it would be the same with a freelance web-designer. Is the engaging of a 'Freelancer' similar to a 'Sub-contractor?

For relevance, I would like to sub-contract labour on larger scale contracts, rather than engage a full-time employee. As I'm trading from a Ltd. company, can I 'buy' labour as a service, and pay the contractor upon invoice? I acknowledge there would be some insurance issues with this; I'm just at starting point now.
Cheers, Nigel

[Coding Monkey]

Do you want me to send over my contract to freelancers? Should give you an idea of what's required by law. My lawyer produced it so that it clearly says what must take place for that person to be a freelance designer and not an employee of the company. My accountant always explained the thin line between employer and freelance, with one of them being that they must be able to get work elsewhere and not be dependent on me and it's recommended I don't buy them any computers/software etc.

Another one was (and I don't allow this) that for them to be freelance, they should be allowed to give the work to someone else.

And my dad owns a construction company, so I could ask him as that would probably be quite relevant to you.

[bwglaw]

Hi all,
The 'sticky' thread about 'Going Ltd' recently touched on Freelance Vs employee in relation to a hairdressing salon. i guess it would be the same with a freelance web-designer. Is the engaging of a 'Freelancer' similar to a 'Sub-contractor?

For relevance, I would like to sub-contract labour on larger scale contracts, rather than engage a full-time employee. As I'm trading from a Ltd. company, can I 'buy' labour as a service, and pay the contractor upon invoice? I acknowledge there would be some insurance issues with this; I'm just at starting point now.
Cheers, Nigel

Nigel

In employment law there is no such thing as a 'sub-contractor', a person will largely either be an employee or a person 'conducting business on his own account', namely a freelancer, who will be self-employed.

You can create a contract where the person provides labour-only based on a fixed hourly rate / X number of weeks/days/or as when and required. In this kind of contract you need to make it clear that their is no mutual obligation to provide work and other clauses need to be incorporated to ensure it falls in the category of contract worker/agency worker (some agency workers can be employees! wording/relationship is crucial here!)

The term 'sub-contractor' is heavily used by the Inland Revenue for tax purposes, but in law one has to look at the actual relationship and intention of parties to determine which category they fall under.

If you 'sub-contract' someone to do a project for you and you pay them an hourly rate, pay their PAYE and NI, then it is more than likely they will be construed as employees, this have employment rights, including holiday pay. It also depends how much control you will have over the person i.e. how work is done, when, where etc

If you are looking to avoid being entangled in employment law and do not wish to assign any employment rights to anyone then you should offer the person a contract for services for a fixed period etc

Employment lawyers make their money when employers/contractors create a 'contract' that falls into the grey areas mentioned above

[fastfences]

Cheers for your prompt help. The document would be a great help. I do know it's a 'fine line', hence my doing the homework!!

So, your dad's in construction? A touch of JoyDivision there :wink: . Wonder where he is? :cry:
Cheers, Nigel

[bwglaw]

I would be interested to see the document also if you don't mind forwarding it my way Tom?