Staff

Increasingly in the information age, companies need to maintain flexibility and keep costs down by retaining a small number of core staff (employees), and use contractors (self employed staff) for specialist requirements as and when needed. We supply employment and freelancer contracts to help businesses secure their intellectual property rights.

Whether a member of staff is an employee or self employed is in practice an important question. If the true nature of the relationship is one of employment, it is not going to change anything for the contract to say the individual is actually self-employed. The question stands to be decided under the general law. Historically the test to determine whether a person was an employee or self employed turned on whether the employer controlled or had the right to control the job that the employee did and the way it was done.

As a more skilled workforce has emerged during the information age, the control test has become outdated. Instead the courts first began to consider the extent to which workers are an ‘integral part of the business’ as opposed to being merely an accessory to it, and increasingly they now consider a variety of factors, with ‘control’ being merely one of the elements. Now, the factors that are relevant involve assessing the extent to which an entrepreneurial element is involved in the relationship, as well as questions such as:

• Does the contractor work for others too?
• Who controls how the work is done?
• Is the contractor free to choose when he works, or are the hours fixed by the client?
• Does the contractor work on the client's premises, using the client's equipment?
• Is self employment normal for this kind of work?
• To what extent is the contractor at risk as a self-employed person?

Also relevant will be the risk of loss and chance of profit, the provision of equipment, tax and NI contributions, as well as the intention of the parties.

It is noteworthy that where works are created by people who are employees, the employer is the owner of copyright in the works. Where contractors are used, they will in principle own the rights in their own output, although the question is not a straightforward one following the decision in 2003 in the case of John Richardson Computers v Flanders.

The Flanders case is particularly relevant where a work is created by a number of people, some of them employees, and some contractors (some of whom were ex-employees), over a period of time. In Flanders, a dispute arose over the ownership of the computer program created by this mixture of people. There were no express assignments of the intellectual property rights.

The court found that the software company had an equitable interest in nearly all parts of the program not developed by employees, and that the contractors held their rights in trust for the company. However, there is no guarantee of such a finding as this will depend on the facts of each case.

So email us if you want to avoid the need for expensive litigation to clarify your rights. Ask us to quote for producing appropriate contracts for all your staffing needs. Our contracts will not only safeguard your intellectual property rights in the end products your staff produce, but will also address the protection of your trade secrets through the procedures we will recommend you introduce, and also through appropriate contractual restrictions.