• employee_law
  • December 07, 2015

Considerations when engaging freelancers & consultants

By Lawbite Team

Book a call
article

Using freelancers and consultants can be an effective way for your business to get the expertise it needs, without taking on the liabilities and obligations of an employee. Consultants can be engaged flexibly as required or for a specific project.

As with any business relationship, a written contract should be a priority before any services are provided. A contract protects both parties, setting out their obligations clearly and reducing the risks of a misunderstanding or dispute. Without it, you are relying on a verbal agreement, which is unlikely to be the same agreement in the minds of those involved or cover all of the issues. Be clear what the services are, when they have to be provided, what standards are required, and how things will be put right if the services are not up to the expected standard or delivered on time. Agree how and when the arrangement can end. You (and the consultant) will want to ensure that the consultant is seen to be self-employed for both employment law and tax purposes. A self-employed consultant has limited employment-related rights and doesn’t have to be provided with things such as a pension and paid holiday. The key factors that decide the employment status of a consultant are whether they are subject to your control when providing the services, and whether they have to deliver the services personally. The contract should confirm the consultant’s status. This usually means clauses allowing the contractor to determine how the services are provided and to bring in someone else to provide the services in their place, known as a substitution clause. Where possible the consultant should provide their own equipment and be able to work for other clients. Avoid words such as ‘duties’ and ‘instructions’, which suggest an employment relationship, and make clear the intention of the parties that the consultant is self-employed. However the contract is only part of the story, the actual relationship is just as important. Over time it is easy for a consultant to become integrated into the business. If this is the case, it won’t matter what the contract says, a Tribunal or HMRC will look at the facts to decide if the consultant is still self-employed. You should therefore review the relationship regularly to see if things have changed and take steps to rectify this or adopt the new arrangement. But ultimately the decision about whether an individual is self-employed or not rests with HMRC and the courts. The contract should protect you if the consultant claims to be an employee or HMRC decides that the consultant is an employee. You want to be able to claim back any money that you have to pay. If the consultant is providing their services through a limited company, the company will be the party to the contract. You need to ensure that the individual has to abide by any obligations, particularly those that protect your confidential information and client connections during the agreement and after it ends. To do this, the consultant company should be required to make sure that the individual abides by those clauses, and consider a separate letter from the individual consultant confirming their obligations. If the consultant is creating intellectual property for you, these rights will remain with the consultant unless specifically assigned to you. This should be done in the contract. These things should not be left to chance. Louise Paull - LawBite Employment LawBrief. For further legal advice you can contact Louise via our online legal advice portal.

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

Related Articles

Read our latest blog posts on GDPR, featuring all the latest legal news, analysis and opinion from our expert lawyers.

blog image
  • By Lawbite Team
  • May 11, 2020
Employee Dismissals During The Coronavirus Outbreak

With the Coronavirus lockdown now heading into its eighth week, all employers are taking a hard look at how they can best approach business continu...


Employee Law, Coronavirus
blog image
  • By Lawbite Team
  • May 01, 2020
Covid-19 - Guide to Furlough Staff

As the Covid-19 outbreak started to impact businesses across the country, employers have had to react to managing their workforces. To help busines...


Employee Law, Coronavirus
  • By Lawbite Team
  • April 28, 2020
Homeworking Employees? How To Protect Your Company’s Cybersecurity

As Britain enters its sixth week of Covid-19 lockdown, businesses and employees are well into the swing of working from home. However, now is not t...


Employee Law, Coronavirus

LawBite can help you

LawBite is on a mission to provide business legal advice that is easier to access, clearer to understand and much cheaper. Our on-line legal advice platform can quickly connect you with expert business legal advice. Our friendly, highly qualified business lawyers, solicitors and mediators will give you the guidance and reassurance that comes from customised legal advice for small and medium sized business.

Whether you are bringing or defending a legal claim, outsourcing work, want a business contract review to ward off disagreements, talk to an expert trademark lawyer, resolve a contractual dispute with methods like mediation and arbitration, or getting your new company set up and on the right footing with a robust shareholder agreement and GDPR standards, we can help you succeed.

defend a claim

Talk To A Lawyer

Book A Call
defend a claim

Learn more about LawBite