PCG welcomes ILO vote recognising independent contractors

The Professional Contractors Group (PCG) has welcomed a vote taken at the International Labour Organisation (ILO) conference on 15 June 2006 that effectively endorses the status of independent contractors by declaring that employment law should not interfere with commercial relationships.

PCGís involvement with the ILO began in June 2003, when PCG chairman David Ramsden attended an ILO convention in Geneva to discuss labour relations, regulation and definitions. He and Ken Philips of the Independent Contractors of Australia (ICA) had been nominated as observers by their respective governments, but had no voting rights. Both used the occasion to encourage debate about the right to be self-employed and raised concerns about ìinappropriate meddlingî in the working relationships between independent contractors and their clients.

Since 1996, the ILO has been attempting to create an ëinternational instrumentí that would allow labour regulators around the world to declare a commercial contract to be an employment contract and to declare independent contractors to be employees. Such an outcome would have created international endorsement for measures such as IR35.

After several years of dialogue, there has been a significant shift in the ILOís stance. Clause 8 of its Recommendation has important and positive implications for freelancers: ìNational policy for protection of workers in an employment relationship should not interfere with true civil and commercial relationships, while at the same time ensuring that individuals in an employment relationship have the protection they are due.î

Welcoming the Recommendation, David Ramsden said, ìThis is a significant milestone in terms of understanding the changing nature of work in the 21st century. We describe freelance working as the ëthird wayí ñ outside the traditional divide of employer and employee ñ and we wholeheartedly welcome the recognition that freelance consultants and contractors earn their living through commercial contracts and do not want or deserve to be deemed ëemployeesí.

ìAs we recently articulated in our response to the DTIís ëSuccess at Workí strategy document, the old-fashioned dichotomy of ëemployers and employeesí ignores a large section of the workforce; as a significant proportion of the UKís diverse workforce, freelancers make a valuable contribution to the economy and to a labour market that is characterised by diversity and flexibility.

ìPCG hopes that this recognition of freelancing as a legitimate business model will be repeated in the EUís Green Paper on employment status, which is due out this autumn and to which PCG has made a submission.î