Many businesses are currently seeking help from freelancers in order to reduce their long-term obligations compared to their permanent staff in the midst of the current economic crisis. This has both positive and negative connotations in terms of employment rights and copyright ownership issues.

Freelancers are self-employed, and offer their services to your company for a short time.

The Good…

Hiring a freelancer can have many positive impacts on your business, especially due to the fact they have fewer statutory rights than permanent employees. But it is essential you check the person you are hiring as a freelancer is actually self-employed, as defined by the employment law.

According to this law, the most important factors indicating self-employed status are: an employer is under no obligation to offer work to a freelancer; the freelancer is in control of how and when they work; and the freelancer can choose who they provide their work to.

Under the Employment Rights Act of 1996, a ‘self-employed’ person is generally not entitled to rights if their employment is terminated. This includes the right not to be unfairly dismisses and the right to receive statutory redundancy payment. On top of this, they are also not entitled to: paid statutory sick pay; pension rights; maternity rights; and they are responsible for paying their own tax and national insurance contributions.

The Bad…

However, there are drawbacks to using freelancers as well. These include that the employer has less control, and that the freelancer may not feel any loyalty towards their employer, therefore it’s important to put in confidentiality clauses when drawing up an agreement with a freelancer.

Discrimination laws also apply to anyone “in employment”, which includes freelance workers if they are under an agreement to perform the work they do personally.

If your company has recently made redundancies, be cautious to avoid unfair dismissal claims from your previous employees who may feel their role in your company was not actually ‘redundant’. The best way to ensure this doesn’t happen is to consult your solicitor during the redundancy process.

And the Ugly…

Another legal ramification to bear in mind when hiring freelancers is copyright. Anything that is created by an employee while under employment by your business, legally belongs to your company, however, the same cannot be said for freelancers. When it comes to freelancers, the copyright belongs to them and not you as their employer.

If taken to court, most will imply terms in the contract with your freelancer to give your company rights, but this depends highly on circumstance. If you want to own the copyright of any work your freelancer does for you, make sure you have exclusive rights to control its use, and clear rights over how it is used.

Therefore, if you are going to use freelancers to work for your business, make sure you have a properly drafted, written, legal contract from the beginning of your relationship with them.

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