Within the Creative Media sector there are many types of employment. The difference between each status varies from the hours that they work to the contracts that they sign. Some mean that the individual has flexibility in their working hours whilst others mean that they have financial stability and more rights abiding to employment laws. There are three main types of employment, which are most commonly known. I will mention these in detail and make references at the end to other types.
The first type I will mention is known as a ‘worker’. A worker is somebody who is employed under a contract and who will work flexible hours as determined by the employer. A worker will work for a reward, whether that reward is financial gain, the promise of future work or a contract with the employer. The worker is required to turn up to work even if they do not wish to do so. They have limited rights to ask someone to complete work for them. The employer has to provide work for them for the duration of the contract, and this work is completed for the employer, who is technically the client or customer. An example of this could be agency work.
Workers mainly benefit from the ‘core’ employment rights. They are entitled to National Minimum wage, which varies with age, and protection from the unlawful deduction of wages. They receive paid holiday and cannot work for longer than 48 hours per week. Workers are also protected from discrimination and ‘whistle blowing’, which means that they can report any wrong doing with peace of mind that they are protected in doing so. They are entitled to maternity or paternity pay and also statutory sick pay. Workers, although with basic employment rights, they are not completely on the same level in terms of protection and security as an employee. They are not entitled to a minimum notice period if their employment will be ending, for example through dismissal. They cannot ask for flexible working hours or time off for emergencies, and they do not receive redundancy pay.
Workers are considered as ‘casual’ or ‘irregular workers’, usually described as freelancers with ‘zero hours’ contracts. Freelance workers have the option to accept or decline work although companies do not have to offer work to them. The freelancer will agree terms and sign contracts with the company and then proceed to work under supervision and instruction of the manager or director. The business will often be responsible for deducting national insurance (NI) and tax from their wages. Freelancers have the opportunity to take work when they want it, but this of course means, that they are only earning an income when they accept work. Freelancers can enjoy working patterns similar to self-employed individuals but with less security and more risk that they can be dismissed without warning. It can also be a competitive market where people in the same situation are offering to do work for cheaper prices; securing work in the first place can prove quite difficult.
Next, there are employees. Employees are essentially workers, but with more rights and responsibilities. They will work under an employment contract and tend to work regularly. A manager or director is there to oversee their workload and manage deadlines for the employee. Employees benefit from many things which workers do not, such as redundancy pay, protection against unfair dismissal and more. Like workers, employees must complete work themselves and this work is directly for the company rather than clients or customers.
Employees have all of the same rights as workers plus more. They receive sick pay, maternity, paternity and adoption leave and pay. They receive a minimum notice period if employment ends and also protection against unfair dismissal; an important factor when considering job security. Employees can also request flexible working hours and can take time off for emergencies. An employee is required to work regularly unless on any type of leave. They must do a minimum amount of hours with the required amount of breaks, and be paid for all of the time worked. The manager is responsible for the employee’s workload and how the work should be completed. The employer deducts national insurance and tax from wages and employees also have opportunities to join the company’s business pension. Disciplinary and grievance procedures apply to the employee and the contract sets out any redundancy packages. The employee works at the premises owned by the business and are provided with any relevant tools and equipment.
An employee has much more job security than what a worker does. It could also be said that they have more responsibility within the company to do well and provide work to the manager’s standard. In an employment such as this one, teamwork is essential in making the company successful. The manager oversees what work is done and makes sure it is to a certain standard, if the standards were to fall the company may not do as well and ultimately it could lead to the loss of jobs. It is equally important that employees work well together and are on good terms to keep efficiency and communication high within the company. The fact that an employee has the reassurance of employee rights and a fixed contract with wages may slightly relieve the stress of a potentially full time demanding job. It will be reassuring to know that if the worst scenario did happen an employee will receive a redundancy package and if they feel that the dismissal was unfair they have the right to question this.
Then there are self-employed individuals and contractors who are considered a business themselves. The self-employed are responsible for their own work, they can complete it how they like and to their own standards and will manage their own deadlines and ultimately, success. One thing to note is that individuals must inform HM Revenue and Customs immediately once self-employed or they will face a rather hefty fine. Any employment legislation doesn’t cover them, as they are effectively their own bosses. They still have protection for health and safety and usually against types of discrimination too, (depending on the circumstances). The rights and responsibilities of the self-employed and contractors are determined by a contract drawn up between themselves and the client.
The employment status of the self-employed is determined by a few factors; firstly the individual has to put in bids or a quote to receive work. They have specific work to complete but it can be done how they want and in what hours are suited to them; i.e. they are not under direct supervision. Being self-employed means that they have the ability to hire others to complete work for them. Once the job is complete they will submit an invoice to receive payment. Someone who is self-employed is responsible for their own tax and national insurance, they will usually calculate tax payments at the end of each tax year and will complete a tax return.
People who are self-employed will obviously only be earning money when they are working, this does allow for flexibility and the ability to accept and reject work at their own convenience but it also means that any unsatisfactory work must also be completed in their own time and at their own expense. They are responsible for their own losses and taking profits, so they are dependent on themselves rather than a team of people. Not only this, but they are reliant on clients needing work done, and if there is no work there is no guaranteed wage. To some extent their working hours are reliant on when a client will need work done. It is up to the individual to decide when they will work to the deadline and when they will take breaks. Being self-dependent means they have a lot of freedom, but also a lot of responsibility and consequences and when things go wrong.
Apart from these three main employment types there are more. These of which people are less aware of but still exist within businesses.
Employee shareholders, for example, are rather similar to employees; they work under a contract with fixed hours with the same rights and responsibilities. Shareholders however, must own at least £2,000 worth of shares in that company or the parent company. By having this share in the business, it gives the individual a sense of responsibility within the company and seems to motivate them to be more productive. Shareholders can sell their shares in the company without it changing their employment status. If for example, they are making a profit on the shares some may be exempt from paying capital gains tax when they go to sell.
Shareholders are protected in the terms and conditions when a business is transferred to a new owner. They do not however, have protection against unfair dismissal apart from on the grounds of discrimination and health and safety. Shareholders do not get redundancy pay or flexible working hours except in two weeks after returning from parental leave. They also do not have the right to take time off for training. Employers do have the option to choose more generous employment rights than these statutory ones but it is not compulsorily. Shareholders can get tax relief on the first £2,000 of shares but they also may have to pay tax on buying and selling of their shares.
Anyone can apply for a shareholder’s position but people claiming job seekers allowance, whom are required to apply for jobs put forward to them from the Job Centre, do not have to apply for these positions due to their risky nature in losing value of their investments. Existing employees also do not have to take on these positions if they do not want to for similar reasons.
Directors are another example of an employment type; they run limited companies on the behalf of shareholders. They have different rights and responsibilities to employees and are classed as office holders for tax and NI purposes.
Office holders are usually appointed by a company or organization; they have no contract or regular payment. Office holders are neither employees nor workers, however it is possible for someone to be an office holder and an employee if they have an employee contract with the same company or organization that meets criteria for employees. Their duties are minimal and are only required under relevant statute. They’re effectively working as an independent office and aren’t under supervision.
In conclusion, there are many different types of employment each with their benefits and drawbacks. The self-employed and freelancers rely heavily on themselves to obtain work and if there is none, have the potential to go bankrupt and lose everything. They do however have the freedom to work when they please and have control over their own work and methods. Employees are much more secure by having the protection of an organization hanging over their heads. They receive a reliable income no matter how much profit or loss the company is making and are also paid when they are not working. The downside is that they have little control over what hours they work and are working to someone else’s ideas and plans rather than their own.
Information source: https://www.gov.uk/employment-status/overview
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