Summary
- As UK entertainment businesses grow, employment law risks increase around employment status, contracts, IP ownership, IR35, and health and safety.
- Freelancers and casual staff can be misclassified as self-employed when their working arrangements actually meet the legal tests for employee or worker status.
- Business acquisitions can trigger TUPE, transferring existing staff and their employment terms and liabilities to the acquiring business.
- This guide explains key UK employment law considerations for growing entertainment businesses.
- LegalVision’s business lawyers specialise in advising clients on employment law compliance for entertainment businesses.
Tips for Businesses
Regularly review employment status, contracts, and policies as your team and projects grow. Ensure IP ownership is assigned in freelancer agreements, strengthen confidentiality obligations, check IR35 compliance for contractors, and conduct robust health and safety risk assessments across all projects, including freelance staff.
If you run an entertainment business in the UK and hire staff, you must comply with important employment law rules. The entertainment sector can create added complexity and risk. Neglecting your obligations when you hire, pay, and manage your team can lead to disputes, tax problems or damage to your reputation. This article explores key employment law issues for growing entertainment businesses and how to manage risk during growth over time.
Employment Law Issues for a Growing Business
Employment law considerations and risks can increase over time, as entertainment businesses expand in scale. For instance, as the venues, shows, or events you run expand, there may be a greater need for casual or short-term staff.
If you are a production company that takes on more projects, you may hire more freelancers and project-based workers. This engagement can complicate the management of issues such as determining employment status.
Acquisition expansion, such as purchasing another business as part of your growth strategy, can also introduce risks. When you acquire the assets of another venue or production company, then their staff may transfer over to you under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) if there is a ‘relevant transfer’. This means bringing their existing terms, pay structures, and any unresolved employment risks to your business.
Important Employment Law Considerations
Some important issues to consider are set out below.
1. Employment Status and Misclassification
UK law has three main types of employment status, such as:
- employee;
- worker; and
- self-employed contractors (commonly referred to as ‘freelancers’).
As businesses grow, individuals may work on several projects, take on regular roles, or become more involved. This could make it more likely that someone engaged as a freelancer could actually count as an employee or worker under the law.
Employment status affects your obligations around important matters, including:
- holiday pay;
- minimum wage;
- notice periods;
- protection from unfair dismissal;
- payroll and pension eligibility.
HMRC and employment tribunals look at how the work is actually done rather than just what the contract says. It is therefore highly important to review status regularly, especially if they come back to you for regular work or their roles change over time.
2. Contracts and Policy Documentation
As your headcount grows, having clear contracts and documents is increasingly important. The written contract terms for your staff should align with how people actually need to work and should be updated as your business changes.
Entertainment businesses often choose short-term, zero-hours, or freelance arrangements for flexibility. Whilst helpful, these models may still confer certain rights, especially if individuals qualify as employees. Well-drafted and correct contracts can help address key issues, such as:
- the work required;
- payment terms;
- flexibility; and
- early termination when schedules or budgets change.
As you hire more people, having effective and up-to-date policies is also key. Clear policies on key workplace issues can help maintain high standards across your business and reduce risk, such as health and safety, confidentiality, and data protection. However, those policies need to stay effective over time.
3. Intellectual Property and Information Protection
As an entertainment business grows, its intellectual property can become more valuable and important to protect. Creative work made by employees in the ordinary course of their employment usually belongs to the employer, but this is not always true for freelancers.
Without clear agreements assigning IP ownership, such individuals may retain ownership of intellectual property they create for you, which can limit how your business can use it.
4. IR35 Risks
As entertainment businesses grow, they can often hire freelancers through personal service or loan-out companies.
IR35 rules essentially determine whether these individuals would be employees if there were no middle company. When IR35 applies, certain medium and large businesses must check employment status and handle tax issues correctly.
5. Health and Safety Risks
Long and irregular hours can be normal in the entertainment sector, but businesses still have to follow rules about pay, working hours, rest, and holidays.
As projects get bigger and more complex, health and safety risks can also rapidly rise. Businesses must look after the health, safety, and welfare of everyone on set, including freelancers.
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How an Employment Lawyer Can Help a Growing Entertainment Business
This article has explored some examples of industry-specific risks for a growing entertainment business. However, an employment lawyer can help entertainment businesses manage a full range of risks as they experience growth.
They can help you by reviewing the employment status for everyone on your team, guide you on possible misclassification risks, and advise on whether someone should be an employee, a worker, or self-employed. This is especially important if freelancers work under your increasing control.
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Key Takeaways
When a business grows in the entertainment sector, handling employment law can get more complicated. As your teams get bigger and work arrangements change, you need to regularly review your employment practices and documentation, as well as your legal obligations. Prioritising employment law obligations and best practices can help your business grow with confidence and prevent risks.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced employment lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Why may employment law be challenging for the entertainment industry?
Entertainment businesses may often work on short-term projects which need staff with irregular hours, or a workforce consisting of employees, freelancers and casual staff. As projects grow in size or frequency, these arrangements can create complex legal obligations that need a careful review.
What health and safety duties apply in entertainment?
Businesses must ensure the safety of everyone working on a project, including their freelancers. Risks to health and safety can quickly increase as projects become larger and more complex.
When does TUPE apply to a business acquisition?
TUPE applies when there is a ‘relevant transfer’, such as acquiring a business or service, and existing employees automatically transfer to the new employer on their current terms and conditions.
Why does IR35 matter for businesses hiring contractors through personal service companies?
IR35 determines whether a contractor would be an employee if the intermediary company did not exist. If it applies, businesses must handle tax obligations correctly to avoid penalties and liabilities.
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