Freelance Britain: Bending Over Backwards in the Name of Flexibility

During a recent stay in a hospital ward, I found myself writing a report from my bed while putting off work on another that involved turning pages and pages of corporate speak into plain English. During a previous visit I had used my mobile phone to connect my laptop to the Internet so that I could engage in a spot of live editing.

Yes, I am self-employed and this is how many of us work these days. And while I am neither looking for sympathy nor hoping for a medal it is worth highlighting that, even in sickness, we freelancers have to keep going when the work is there. It is now becoming a social and economic issue given the dramatic rise in the number of freelancers in recent years.

About 4.6 million people or 15% of those working in the UK in 2014 were self-employed - the highest proportion in the four decades since figures started being compiled. There’s been a 39% increase since 2000 alone.

There is much debate over whether the driving force behind self-employment was the surge in redundancies that followed the global financial crisis and ensuing recession, or whether workers opted for self-employment out of personal choice.

Either way, the bigger concern is that this growing number of workers in the UK lacks the support and voice enjoyed by those with a steady job.

for everyone who freelances as a lifestyle choice, there are many - typically at the lower end of the pay scale - who have had insecure working conditions imposed on themFreelancers have none of the protection of other employees: no holiday pay, no sick pay, no paid maternity or paternity leave. If a freelancer falls ill, they either cancel the commitment - and risk the loss of future contracts - or struggle on regardless. Freelance income is generally subject to the vagaries of different accounts departments, with their different payment systems and their own timetables.

Freelancers do get other benefits like opting out of the rat race, the daily commute, poisonous office gossip, the struggle for promotion, the tedium of line-management or insufferable 360-degree performance reviews.

But for everyone who freelances as a lifestyle choice, there are many - typically at the lower end of the pay scale - who have had insecure working conditions imposed on them.

Because it’s so hard to know what is driving this realignment in the labour market more needs to be done to make sure that the millions of workers are better looked after.

It’s time for a new deal between the state and freelancers. As regular contributors towards the National Insurance system, freelancers should qualify for statutory sick pay and holiday pay. If that what’s required are higher contributions - mine are currently £72 a quarter, which is way too low – then so be it. We need a proper debate involving representatives of freelancers, employers’ groups, independent experts and politicians and we need to draw up a new framework.

Thanks to series of legal cases some freelancers who are effectively salaried workers rather than contractors are already entitled to such benefits from their “employer”. The state should extend and pay for this to cover all freelancers.

More needs to be done to make sure companies pay freelancers promptly. Firms can withhold money for months by simply stating that it’s corporate policy. Sometimes a middle manager can hold up payment at a whim by just saying the work doesn’t meet the company’s requirements.

The reality for many freelancers isn’t a life of lattes and swanky laptops. Average income from self-employment is £207 a weekThere aren’t reliable figures on late payments so it’s hard to know the full extent of the problem. What is clear is that the burden to get paid falls on the freelancer. Some online advice services suggest putting clauses in contracts stating that payments after 30 days incur interest. But that’s impossible to enforce. Alternatively, there are middlemen that will settle an invoice with the freelancer - at a discount and for a fee - and then chase the employer for the full amount.

There are already companies that have signed up to the Prompt Payment Council who undertake to pay suppliers “within the terms agreed at the outset of the contract.” The problem is that freelancers have little power to set those terms and even less power to enforce them. I have just received a payment exactly 60 days after invoice. My terms are 30 days - the company’s are 60 days (recently reduced from 90 days). Guess who wins.

We need new policies and the PPC needs teeth. It should be made a legal requirement for firms that use self-employed suppliers sign up to a code of conduct and those who hold up payments repeatedly should be named and shamed. Freelancers should be allowed to complain anonymously to the PPC. We need a small business conciliation service to resolve disputes as the Association of Independent Professionals and the Self Employed suggests.

The reality for many freelancers isn’t a life of lattes and swanky laptops. According to the Office for National Statistics, in 2012/13 the average median income from self-employment was £207 per week. According to the Family Resource Survey, income for freelancers since 2008/09 has fallen by 22% after taking into account inflation.

Freelancers bring many benefits to employers and the economy and it’s time that this rapidly expanding share of the workforce had the same rights as those in regular jobs. Freelancing brings a degree of flexibility to working that staffers can only dream of, but greater safeguards are needed to prevent millions of workers being treated like 18th century farm hands. I chose this life but many have not been as lucky. We need to tighten the rules before everyone is being asked to work from their hospital bed.

More about the author

About the author

Phil has run Clarity Economics, a London-based consultancy, since 2007 and, before that, was Economics Correspondent at The Independent.

Phil won feature writer of the year Work Foundation Work World media awards in 2009, and was commended by the Royal Statistical Society in 2007.

He is the author of Brilliant Economics and The Great Economists.

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