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Yesterday I saw a snapshot of how the recession has impacted freelance contractors, based on their age and on the sector which they supply. Speakers at a round table I chaired on ‘The Future of Freelancing’ revealed that older generations of freelancers are staying on in the marketplace for longer, causing a spike in the number of people beyond retirement age that are sticking with freelancing. I also heard accounts of people, typically aged 40 and upwards, taking the plunge into freelancing because their permanent job had been made redundant. At the bottom end of the market, the picture is less clear and not as bright. Some speakers took the view that an increasing number of graduates are trying their hand at freelancing, mainly, it seems, because the generation has been taught to make decisions about their lifestyle and career earlier than past generations. But other speakers cited evidence to indicate that some younger people are finding it difficult to get into freelancing, due partly to a growing number of client companies looking for more experience early on in a person’s career. In terms of the sectors that heavily use freelance contractors, the consensus was that engineers, particularly those in the oil and gas sectors, appear to be emerging out of the recession more quickly than their professional counterparts. Engineering’s relatively speedy recovery effort contrasts the fight back from the IT sector, where the ‘getting back to its feet’ process appears to be surprisingly slow. Contractors in the IT sector might be even more disappointed, then, to learn that the government has no answer, at this stage, on how genuinely self-employed people should be excluded from the EU Agency Workers’ Directive, as UK policymakers intend. From the roundtable, which was joined by Andrew Miller MP, the architect of the Temporary and Agency Workers (Equal Treatment) Bill , there was no encouraging sign that the government has found the precise wording needed to keep the genuinely self-employed out of the directive – a proposal which we welcome. Whether it is because of future legislation, or because of the downturn, threatening to slow their supply of contracts, self-employed freelancers are making the most of what’s available. Thanks to technology improving the number of ways to communicate, contractors are organising themselves into co-operative groups. These contracting syndicates, informally comprised of other contractors, are dedicated to engaging end-clients directly, effectively cutting out agencies while giving the contractor a potentially nationwide clientele. However, whether they are specialists in health and safety, engineering or IT, the UK’s legislative framework for all freelance professionals is poor and unclear. It leads to uncertainty and instability for freelancers. The creation of ‘one-size-fits-all’ legislation aimed at the flexible marketplace continues. As a result, there is a need for some clear definitions of the different populations within the flexible workforce to enable the right legislative framework, and the right basket of support to be provided. Employment status in the UK is a mess. This is true both in terms of the legal definition - and how that definition is applied from an employment rights perspective, and the tax definition - and how that definition is applied from the tax authority perspective. These two definitions are not even aligned, irrespective of whether each of them has been drawn correctly. The result of this misalignment is that people who are not vulnerable, who don’t want extra workplace protections, are having protections foisted upon them, at the same time that people who are vulnerable, and want workplace protections, are being taxed as employees but are not getting the employment rights that they deserve. The whole legal framework covering freelancers needs addressing. This is due to the fundamental reason that the government does not understand the flexible workforce and the various constituent parts of it, and what measures are required to support and protect them. The government needs to understand freelancing at a level of granularity, in order to recognise the different populations within the marketplace. Only then can it provide a framework that protects the vulnerable and encourages the entrepreneurial. The edited comments from an interview with Martin Hesketh, managing director of Brookson , an accountancy firm specialising in contractors. Nov 11, 2009 Email this article Printer friendly page Previous Page
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