Q&A: What do I include in a freelance agreement?

Search supported by

Q: I am in the process of recruiting freelancers to work with my company, but I am unsure as to what information to add to their contracts of employment. Do employment contracts differ if you are employing people on a freelance or short-term basis?

A: The traditional term of ‘freelancer’ denotes that the individual is not an employee of the organisation for whom the work is performed, and they are generally recognised as self-employed individuals. Therefore, a contract of employment is not required for a freelancer because the law on contracts of employment provides that only employees must be given them.

It is important to understand the impact that an individual’s employment status that is, the framework of the working relationship, has on their rights, and your responsibilities towards them. The three main statuses are: employee, worker and self-employed, and each carry different obligations. The paperwork provided to them at the commencement of the work engagement is important in being able to categorise which banding the individual falls into, although other factors are also significant. It is important, therefore, to ensure that the documentation properly reflects the individual’s employment status.

The contract agreed with a self-employed freelancer is generally referred to as a contract for services, and would not contain all of the elements that a contract of employment includes. There is no statutory framework for a contract for services, although it is important that certain elements of the working relationship are set out so as to avoid confusion in the future. In order to be truly self-employed and to maintain the relationship of contractor and freelancer, and therefore avoiding all of the intricacies of legal obligations that exist between an employer and an employee, the freelancer should have the right to substitute himself. This should be reflected in the paperwork.

The contract should contain such information relating to practical issues of the assignment, for example, the payment to be received for the work and how invoices should be submitted; the effect of substandard work on pay; who is responsible for paying any delegates sent; how the contract may be terminated.

Individuals engaged on a short-term basis should also be provided with documentation setting out the terms and conditions upon which work is offered, whether that be as an employee, a worker, or self-employed. The third category, ‘worker’, also attracts a different working relationship and their paperwork should reflect that their status comprises elements of both employee and self-employed. The status will define the paperwork that should be given, rather than the short nature of the engagement. Where work is only for a defined period, rather than open-ended, it is vital that the end date of the work is included in the documentation, and the right is reserved to terminate the contract on a date earlier than this in order to give the employer the most flexibility.

Peter Done is managing director of law firm Peninsula