All employees have a contract with their employer. The terms of the contract are the employees agrees to employment conditions, rights, responsibilities and duties. The employer and employee must abide by the contract until it ends or until the terms are changed. Accepting a job offer means accepting the job contract

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Contract terms can be agreed upon in different ways: a written contract or document, verbally agreed, in an offer letter, required by law (employees must be paid at least the National Minimum Wage) or with implied terms. Implied terms are terms such as employees not stealing from their employer, the employer providing a safe working environment, something that's required to do the job, a legal requirement (an example being the legal right to a minimum of 5.6 weeks paid holidays) or something that's been done regularly in a company for a long time

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Collective agreements are when an employer has an agreement with the employees' representatives (trade unions or staff associations) that allows them to have negotiations of the terms such as pay or working hours. Some of these terms could be who'll represent employees, which employees are covered by the agreement, what terms the agreement will cover and how negotiations will be organised

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When employees start working, the employer must give a document stating the main conditions of employment. This isn't an employee contract, instead its know as a "written statement of employment particulars". The written statement has the main document (the "principal statement") and a wider written statement. The principal statement has to be provided on the first day of employment while the wider written statement must be within two months from the start of employment. Employers have to tell employees and workers about any changes to the written statement within one month of changing it

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For employees the principal statement has to include the date a previous job started if it counts toward their time of continuous employment. The statement also has to include many things:

• the employer's name

• the employee's/worker's name, job title or description of work & start date

• how often & much the employee/worker will be paid

• hours & days they'll have to work and if it'll vary, this also includes if they'll have to work Sundays, nights or overtime

• holiday entitlement (including public holidays)

• where they'll be working and if they might have to relocate

• if an employee or worker will work in different places, what those will be and what the employer's address is

• how long a job is expected to last or what's the end date for a fixed-term contract

• how long a probation period would be and its conditions

• any other benefits (such as childcare vouchers or lunch)

• obligatory training, whether its paid by the employer or not

 

If an employee/worker has to work outside the UK for longer than a month, the principal statement also has to include:

• how long they'll be abroad

• what currency they'll be paid in

• any additional pay or benefits they'll get

• terms relating to them returning to the UK

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Employer's must also give information to the employee/worker about these on the first day: 

• sick pay & procedures

• other paid leave (a few examples being maternity or paternity leave)

• notice periods

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Its up to the employer to choose to include this information in the principal statement or prove it in a different document. The document has to be something the employer can reasonably access

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For the wider written statement, it must include information about:

• pensions & pension schemes

• collective agreements

• any other right to non-compulsory training from the employer

• disciplinary and grievance procedures

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If an employee/worker has an issue with getting their written statement they can either try to solve the problem with their employer informally, take out a grievance against their employer if that doesn't work or take a case to an employment tribunal as a last resort. If it goes as far as the tribunal, that'll decide what the employment particulars in the statement should've been 

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If the employee/worker wins a case about another issue, the tribunal can award compensation if there's also been a problem with their written statement. Compensation can be up to 4 weeks' pay, but there is a limit on how much a tribunal will award for a week's pay

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The tax and employment responsibilities depend on the type of contract and their employment status. There are full-time, part-time, fixed-term and zero-hours contracts. There are also special rules for employing agency staff, freelancers, consultants & contractors, family members, young people and volunteers​

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For full-time and part-time contracts, the employer must give employees:

• a written statement of employment or contract

• the required minimum level of paid holiday

• a payslip showing all deductions, such as National Insurance contributions

• the required minimum length for rest breaks

• Statutory Sick Pay (SSP)

• maternity, paternity and adoption pay & leave

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Employers must also:

• make sure employees don't work longer than the maximum allowed

• pay employees at least the minimum wage

• have employer's liability insurance

• provide a safe and secure working environment

• register with HM Revenue and Customs to deal with payroll, tax and NICs

• consider flexible working requests

• avoid discrimination within the workplace

• make reasonable adjustments to their business premises if an employee is disabled

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Fixed-term employees must be treated the same way as full-time permanent staff. For fixed-term contracts: 

• last for a certain length of time

• are set in advance

• end when a specific task is completed

• end when a specific event takes place

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Agency staff are temporary staff from agencies

• employers pay the agency (includes employee's National Insurance Contributions and Statutory Sick Pay)

• the agency's responsible for the workers getting their rights under working time regulations 

• after 12 weeks of employment in the same role, agency workers will have the same terms and conditions as permanent employees (includes pay, working time, rest periods, night works, breaks and annual leave)

• the employer must provide the agency with info on the relevant terms and conditions in their business so the agency can make sure the worker will get equal treatment after 12 weeks in the same job

• agency workers must be allowed to use any shared facilities (examples are a staff canteen or childcare) and give information about job vacancies from the first day they work there

• the employer is still responsible for their health and safety 

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Hiring a freelancer, consultant or contractor means:

• they're either self-employed or part of another company​

• they're usually responsible for their own tax and National Insurance Contributions

• they're possibly not entitled to the same rights as workers, such as minimum wage

• the employer will still be responsible for their health and safety

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Zero-hours contracts, also known as casual contractors, are usually for 'piece work' or 'on call' work. Interpreters count as zero-hours contracts. This means:

• they're on call to work when the employer needs them

• the employer doesn't have to give them work

• they don't have to do work when asked

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These workers are entitled to statutory annual leave and the National Minimum Wage like regular workers are. The employer wouldn't be able to stop a zero-hour worker getting work from somewhere else. The law says they can ignore a clause in their contract if it bans them from looking for work or accepting work from another employer. Like all workers, the employer is still responsible for the health and safety of these staff

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For hiring family members, the employer must:

• avoid special treatment in terms of pay, promotion and working conditions

• make sure tax and National Insurance contributions are still paid

• follow the working time regulations for younger family members

• have an employer's liability insurance that covers any young family members

• check if the employer needs to provide them a workplace pension scheme 

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For volunteers or voluntary staff, the employer:

• are still responsible for their health and safety

• must give training and inductions in the tasks the staff will do

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Young people can be employed if they're 13 or over but there are special rules about how long they can work and what jobs they can do. Young workers and apprentices also have different rates from adult workers for the National Minimum Wage. These rules can change once they become 18 as they'll be classified as an adult worker. The employer also must do a risk assessment before employing young workers. Young people can also have certain employment rights such as: 

• statutory maternity pay and ordinary statutory paternity pay if they qualify as a result of their continuous employment

• paid time off for their studying and training

• redundancy pay

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There are four main differences between freelancers and contractors

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Hiring a contractor could mean reaching out to an external agency or vendor, afterwards the agency then assigns workers to do the job. At the end of the month the employer pays the agency, then the agency pays the contractors. For an independent contractor, the hiring process could be more direct since they would count as an individual rather than an agency. Freelancers always work on their own though, so the employer would have to reach out to them directly. The employer would have to pay directly to them as well and pay them the full amount that was agreed on

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Contract workers and independent contractors are hired for a long time from 3 months to a year, possibly longer. Contractors normally dedicate all of their work hours to a single client for however long the contract lasts as well. Freelancers usually have a much shorter contract though, most companies hire freelancers for a single project or even just for one day. The agreement wouldn't require the freelancer to devote all their hours to a single client either as they're usually working with multiple different employers at the same time​

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Employers have more say over how a contractor works, they might have them work on-site or use the company's facilities. The job may need them to work certain set hours and contractors aren't free to choose their own timings either. For example, contractors providing customer support services will need to be available when the company's support hotlines are open. Freelancers aren't nearly as controlled though as employer's can't confirm when, where or how a freelancer will work. Freelancers can set their own times and work days as long as they complete their task by the agreed upon deadline. Some like working from home, cafés or co-working spaces rather than in an employers' office. However its a freelancers responsibility to do their own taxes and have all the right equipment and licenses required to do their job

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The kind of work they both do isn't definitive but contractors normally have different tasks compared to freelancers. Most of the jobs contractors do are for regular and recurrent jobs like analysing data, providing security services, performing repairs or managing teams. Companies often hire skilled independent contractors for IT services like performing software updates, data protection and system maintenance to name a few. Because freelancers are so spontaneous, they often get non-recurrent and irregular jobs. They often work for marketing, media and creative industries like being a designer, content writer, marketing manager, UX/UI designer or a strategist

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The last important difference is in their rates. Contractors are hired through an agency, so its the agency's job to come up with a rate and communicate that with the client. Independent contractors and freelancers however have to set their own rates and handling invoicing independently. They can decide if they prefer being charged by the hour, day or by the project. They also have to negotiate rates and request payments with their clients

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Dayal, R. (2022) Contractor vs Freelancer: What’s The Difference? Available at: https://www.talentdesk.io/blog/freelancers-vs-contractors-the-main-differences-you-should-know. Accessed at: 21.11.22

 

Government. (Year unknown) Contract types and employer responsibilities. Available at: https://www.gov.uk/contract-types-and-employer-responsibilities. Accessed at: 17.11.22

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Government. (Year unknown) Employment contracts. Available at: https://www.gov.uk/employment-contracts-and-conditions. Accessed at: 17.11.22