Employment Law and Contracting

Contracts for work or services can be written, verbal or implied. Therefore, a binding agreement may exist even if a written contract has not been issued or signed (although note that contract law can be complex and there are some areas where written contracts do have to be in place, such as when dealing with property and rights). In any event, producing a written contact is always recommended and ensures that both parties are clear of the terms of the contract.

It is also recommended that parties ensure a contract is signed as this confirms that the parties have accepted the terms of the contract.  However, even if a contract has not been signed, it will generally be implied that the contract has been accepted if the work has commenced or if a payment has been made by an engaging entity under the contract.

There are a number of types of contract that are often used when engaging workers on a production.  It is important to understand the distinctions between the different types of contracts for services and therefore the resulting responsibilities of the production.

DETERMINING EMPLOYMENT STATUS

There are certain guidelines that can be followed to assist in making an assessment on status.  These guidelines are set out below.  In any event,  if in doubt, it is recommended that legal advice be sought or alternatively take a cautious approach and regard all freelancers as ‘workers’.

Employee:

• must turn up for work at times specified by the organisation;
• cannot turn down work;
• must personally do the specific work they are hired to do without arranging for someone else to do it;
• must work in the way their manager wants;
• rely on one organisation for work;
• the engaging organisation preferentially gives them work; and
• work using equipment provided by the organisation.

Employees will have tax and national insurance deducted from their pay through the payroll.  As employees they may be entitled to sick leave, sick pay, redundancy, maternity / paternity pay or leave. They also have the right to holiday, the national minimum wage and work place pension.

Self-employed / Sole trader ‘worker’:

(sometimes colloquially referred to as Schedule D, from an obsolete tax reference for self-employed income).

• tend to work for one organisation but not always;
• carry out the work personally;
• obligation on organisation to provide work and on individual to accept that work;
• decide themselves how the work is carried out;
• decide when and where they carry out the work; and
• provide their own equipment to do the work.

Or are listed on the HMRC list of TV and radio workers: behind camera workers roles treated as self-employed.

HMRC behind camera workers roles treated as self-employed

Former Appendix 1

Self-employed/sole trader “workers” are paid gross but they also have the right to holiday, the national minimum wage and work place pension.

Self-employed / Sole trader:

• the organisation is their ‘client’ and they work for multiple organisations;
• decide themselves how the work is carried out;
• no obligation on organisation to provide work and individual can turn down work;
• can appoint a substitute to carry out the work (i.e. sub-contract the work);
• high level of autonomy on when and where they carry out the work; and
• provide their own equipment to do the work.

Self-employed/sole trader who does not qualify as a worker is paid gross.

Loan Outs – Key talent and crew are often contracted via loan-out agreements.  A loan-out agreement is an agreement where the services of an individual are provided (or loaned out) via a company.  This means that the engaging entity contracts directly with the company rather than the individual.  In such cases, the company rather than the engaging entity is typically responsible for dealing with the tax on any payments made under the agreement.

There are benefits to both parties to contract in this way but there can also be risks with this approach if the agreement is not drafted correctly (i.e. the producing entity needs to ensure that intellectual property created by the individual is assigned to the production).  It is therefore best practice to seek legal advice when producing a loan-out agreement.

If the company is personal service company then IR35 rules may apply – see Crew Payroll.

The particular status of an individual will determine what level of employment rights they have.  All employment rights apply to employees while sole traders / self employed only have limited employment rights (although they have slightly more rights if they are regarded as having ‘worker’ status).

In relation to loan-out agreements, the individual will generally be an employee of their personal service company.   This means that they may be entitled to a full suite of employment rights but the engaging production entity is not responsible for providing these – that responsibility lies with the personal service company.

The key rights to be aware of in respect of employees and workers are set out below:

Employee:

• holiday pay;
• statutory sick pay;
• national minimum wage
• 48 hour working week and rest breaks;
• maternity / paternity / adoption leave and pay;
• health and safety protection;
• discrimination protection – race, sex, disability, religion/belief, sexual orientation and age;
• right to be automatically enrolled in qualifying pension scheme and receive employer pension contributions once auto-enrolment applies to organisation;
• right not to be unfairly dismissed; and
• redundancy pay (after 2 years’ service)
• unfair / constructive dismissal

Self-employed/ Sole trader ‘worker’:

• holiday pay;
• 48 hour working week and rest breaks;
• health and safety protection;
• discrimination protection – race, sex, disability, religion/belief, sexual orientation and age; and
• right to be automatically enrolled in qualifying pension scheme and receive employer pension contributions once auto-enrolment applies to organisation.

Self-employed / Sole trader ‘freelancer’ / Loan outs

• health and safety protection; and
• discrimination protection – race, sex, disability, religion/belief, sexual orientation and age.

New Employment Rights Bill

A new Employment Rights Bill is expected to come into force in late 2025.  This will affect the following worker rights:

• Zero-hour contracts
• Statutory sick pay
• Redundancy Rights
• Unfair dismissal
• Paternity Leave and unpaid Parental Leave

See: Employment Rights Bill: Factsheets

How much holiday entitlement and pay an employee or worker is entitled to should be set out in an individual’s contract. The statutory minimum amount of holiday is 5.6 weeks a year (which can include bank and public holidays).

Government guidance came into force in April 2024, stated that where a percentage based method of calculating holiday pay is used, then it is permitted to use 12.07%, rather than calculating the specific number of days holiday accrued.  This replaces the 10.77% that has been used by productions previously.

If an individual does not work full time, their holiday entitlement is 5.6 times the number of days they work per week.  For example, if an individual works 2 days a week, they are entitled to 11.2 days holiday per year (2 x 5.6 = 11.2).

If an individual works irregular hours, holiday entitlement needs to be calculated based on the amount of hours worked.  The holiday entitlement of 5.6 weeks is equivalent to 12.07 per cent of hours worked (or just over 7 minutes for each hour worked).  For example, if an individual worked 10 hours, they would be entitled to 72.6 minutes holiday (12.07 per cent x 10 hours = 1.21 hours = 72.6 minutes).

A more detailed explanation of holiday pay entitlement can be found at the following UK government link:
https://www.gov.uk/holiday-entitlement-rights

It is not permissible under UK employment law to ‘roll up’ holiday pay with an individual’s normal pay.  Therefore, if the contract states that a person’s rate is £1,000 per week then it is assumed that this is the basic and that holiday pay is payable on top of that rate. Where the intention is for the gross cost to be £1,000 per week, the contract should state that the basic rate is £892.30 and that the weekly holiday pay element is £107.70.

Furthermore, holiday pay should not be paid on a weekly basis as if it is this would be regarded as ‘rolling up’ holiday pay and an employment tribunal would likely rule that the weekly sum is basic pay and that holiday pay is payable on top of this amount pay.  The recommended approach is therefore to pay the net amount every week and then pay all the holiday pay at the end of the contract or after every few months.  Alternatively, individuals should be advised to take paid leave.

However the Government guidance from April 2024 states that holiday pay is permitted to be rolled up in a worker’s payment but only if they are either:

Irregular Hours Workers

The number of hours they work in each pay period is wholly or mostly variable. 

Eg. Dailies, Cast, Direct SAs

Part Year Workers

Have a period of at least a week when they are not required and not paid.

Eg. if there is an unpaid hiatus break, like a Christmas break

Even if the workers do meet either of these criteria, the guidance states that you are now permitted to roll up, and not that you have to.

A consistent approach to all crew would be to only pay holiday when it is taken.

The EU Working Time Directive provides general rules on limiting workers’ working hours and providing for rest breaks and holidays. The Directive applies to all member states in the European Union and is implemented in the UK via the Working Time Regulations 1998 (WTR).

The WTR apply to employees and self-employed ‘workers’ but not self-employed contractors (see Determining Employment Status section above).  The key provisions from the WTR are as follows:

Rest breaks

• a 20 minute rest break if the day’s working time is more than 6 hours ;
• an uninterrupted 11 hour rest break in every 24 hour period;
• 1 uninterrupted day (24 hours) off every 7 days or, at the engaging entity’s choice, 2 uninterrupted days (48 hours) off every 14 days; and
• an individual worker can’t opt out of the rest break provisions – a collective agreement is needed to do so.

Working Week

• a maximum 48 hour working week; and
• a worker can ‘opt-out’ of the 48 hour rule.

Holidays

• an entitlement of 5.6 weeks’ per year (see Holiday – Entitlement and Pay section above); and
• a payment in lieu should be made at the end of the contract for any accrued holiday that an individual has been unable to take.

Night Work

• a limit of 8 hours night work on average per day; and
• no more than 8 hours in each 24 hour period if the work involves special hazards or heavy physical / mental strain.

In addition to the above provisions, organisations are also required to maintain records to demonstrate the WTR have been complied with.  A production should therefore ensure that for all crew it maintains records of work patterns, hours worked, rest periods and holidays.  Individual contracts must also detail the expected working hours and holiday entitlement.

The WTR are also relevant to health and safety issues.  If a breach in health and safety occurs, the Health & Safety Executive (HSE) will look to ensure that an organisation has complied with its WTR obligations. If an accident occurred due to lack of concentration or exhaustion and the relevant worker had not been given the correct statutory breaks, the employer is likely to be found liable.

All employees or ‘workers’ (see Determining Employment Status above) are entitled to the National Minimum or Living Wage.  It is illegal to pay any employee or ‘worker’ less than this amount.

There are four rates of the National Minimum Wage: (i) for people less than 18 but over school-leaving age, (ii) for people between 18 and 20; (iii) for people 21 to 24; and (iv) apprentices.

For people 25 and over the National Living Wage applies.

These are the rates for the National Living Wage and the National Minimum Wage. The rates change April, check with the Government website for up to date rates:

https://www.gov.uk/national-minimum-wage-rates

Work experience students are not subject to national minimum wage rules provided that they are undertaking their placement as part of a UK-based higher or further education course and the placement lasts for less than 12 months.  Genuine volunteers (i.e. those who are not contractually obliged to carry out work) are also not subject to the national minimum wage.

Avoidance of the National Minimum or Living Wage has become a topical issue recently and HMRC has begun to investigate companies that appear to exploit interns or individuals on work experience.  Given the prevalence of interns and unpaid workers in the media industry, it may become an important consideration when recruiting for a production.

Where HMRC considers that the National Minimum or Living Wage has not been complied with (either by workers being paid too little or not at all), the employer could be ordered to pay arrears (plus interest) and penalties.  It can also lead to scrutiny from HMRC in other financial affairs.

For artists’ contracts, the actors’ union, Equity, has negotiated collective agreements for all types of artists including Stunt Performers working on productions in the following areas:

• BBC
• ITV
• TAC
• BSKYB
• Independent film and television
• TV and radio commercials
• Sound recordings
• New technologies: internet, podcasts, mobisodes, motion capture
• Non-broadcast film or video

These agreements  for artists’ contracts cover the detail of working terms and conditions such as numbers of performances, hours, breaks, health and safety, dispute procedures, usage rights, royalties and touring etc.

Equity also offers a pension scheme. Artists have the option of opting into the scheme on each contract. The Production then needs to ensure that the appropriate deductions are made and the employer’s contribution paid into the scheme.

Equity pension is payable on:

• Engagement fee
• Production Day Payments
• Session fees
• Other daily payments like rehearsals, fittings and travel days

It is not paid on use fees and holiday pay.

In the US, artists agreements are negotiated by the Screen Actors Guild and the American Federation of Television and Radio Artists. These two unions have been merged are now known as SAG-AFTRA.

When engaging background artistes, stand-ins and doubles, there are agreements with BBC, ITV and FAA (The Film Artistes Association).

Employment of Children

What age can a child be employed?

Part-time Work

The youngest age a child can work part-time is generally 14 (although some local authority bye laws allow 13 year olds to be employed in this way), unless the work involves taking part in a public performance.  This includes work related to:

• television/film productions;
• theatre; and
• Children working in these areas will need a performance licence to be issued by the local authority in the area where they live.

Full-time Work

Children can only start full-time work after they have reached the minimum school leaving age. They can then work up to a maximum of 40 hours a week provided they comply with their country’s regulations.  School leaving age in each country of the UK varies slightly (see below):

England

You can leave school on the last Friday in June if you’ll be 16 by the end of the summer holidays.

You must then do one of the following until you’re 18:

• stay in full-time education, for example at a college
• start an apprenticeship or traineeship
• spend 20 hours or more a week working or volunteering, while in part-time education or training

Scotland

If you turn 16 between 1 March and 30 September you can leave school after 31 May of that year.

If you turn 16 between 1 October and the end of February you can leave at the start of the Christmas holidays in that school year.

Wales

You can leave school on the last Friday in June, as long as you’ll be 16 by the end of that school year’s summer holidays.

Northern Ireland

If you turn 16 during the school year (between 1 September and 1 July) you can leave school after 30 June.

If you turn 16 between 2 July and 31 August you can’t leave school until 30 June the following year.

Pay

School-aged children are not entitled to the National Minimum Wage. However, young workers aged 16 to 17 and above minimum school leaving age are entitled to the Under-18 National Minimum Wage.

The Performance Licence

Performance licences are issued by the local authority where the relevant child lives.  A licence applicant is responsible for agreeing arrangements with the child’s head teacher before the application is made and providing a report from the child’s head teacher to confirm that the child’s education won’t suffer if they carry out work in relation to the particular performance.   The authority may also decide to speak directly to the head teacher in respect of this.

Performance licences can be applied for online using the following link:-

www.gov.uk/apply-for-performance-licence

Chaperones

A child taking part in a performance has to have a chaperone with them. Chaperones are licensed by the local authority and are required to ensure the health, comfort, kind treatment and moral welfare of the children in their care.  More information in relation to chaperones is available at the following link:-

https://www.gov.uk/chaperone-service-child-actors

Restrictions on child employment

Special restrictions apply during term times and school holiday times:

Term time rules

During term time, children can only work a maximum of 12 hours a week. This includes:

• a maximum of 2 hours on school days and Sundays; and
• a maximum of 5 hours on Saturdays for 13 to 14-year-olds, or 8 hours for 15 to 16-year-olds

In addition, children are not allowed to work:

• without an employment permit issued by the education department of the local authority, if this is required by local bye laws;
• in places like a factory or industrial site;
• during school hours;
• before 7am or after 7pm;
• for more than one hour before school (unless local bye laws allow it);
• for more than 4 hours without taking a break of at least 1 hour;
• in most jobs in pubs and betting shops and those prohibited in local bye laws;
• in any work that may be harmful to their health, well-being or education;
• without having a 2 week break from any work during the school holidays in each calendar year.

School holiday rules

During school holidays 13 to 14-year-olds are only allowed to work a maximum of 25 hours a week. This includes:

• a maximum of 5 hours on weekdays and Saturdays; and
• a maximum of 2 hours on Sunday.

During school holidays 15 to 16-year-olds can only work a maximum of 35 hours a week. This includes:

• a maximum of 8 hours on weekdays and Saturdays;
• a maximum of 2 hours on Sunday.

Local bye laws may also have other restrictions on working hours, conditions of work and the type of employment and you should contact your local council’s education department or education welfare service for more information using the following link:-

www.gov.uk/find-your-local-council

PACT

PACT is the UK trade association representing and promoting the commercial interests of independent feature film, television, digital, children’s and animation media companies. Members are able to contact PACT to seek advice on the employment of child actors. Their website is at:-

www.pact.co.uk

Federation of Entertainment Unions

The UK Federation of Entertainment Unions grouping consists of seven UK unions:

• BECTU – the Broadcasting, Entertainment, Cinematograph and Theatre Union.  Many production crew are members of this trade union.  BECTU have negotiated two agreements with PACT, one for TV and one for Film and then also with the BBC;
• Equity – representing actors;
• Musicians Union;
• NUJ – the National Union of Journalists;
• Professional Footballers Association;
• Unite (formerly Amicus and TGWU) – the largest union in the UK; and
• Writers Guild of Great Britain.

We also find that US union agreements can be in place on UK productions, specifically including:

• SAG – Screen Actors Guild
• WGA – Writers Guild of America
• DGA – Directors Guild of America

Production Guild

The Production Guild of Great Britain represents the professional interests of senior film and television industry practitioners both within the United Kingdom as well as overseas. The Production Guild website provides members with access to relevant information on employment, legal and industry agreements.

https://productionguild.com/