Freelancers, amid the coronavirus, these legal steps can help protect you
The COVID-19 pandemic has the government advising that we should only participate in face-to-face contact if essential, and all unnecessary travel should be stopped.
Despite the follow-up recommendation for all workers to take a leaf out of freelancers’ books and work from home, the official advice threatens freelancers who have to travel to clients; freelancers who meet with clients, and freelancers who work in-person with client staff.
It might further affect freelancers’ own suppliers, as the guidance to guard against coronavirus is also making providers of goods and services change their operations and requirements.
So, asks Lily Morrison, legal consultant at Gerrish Legal, what practical legal steps can sole traders, freelancers and the self-employed take now to protect their livelihoods from this pandemic?
It’s an all-the-more pertinent question given that many business soloists believe that support for the self-employed is widely seen as inadequate, as SSP has not been extended to them.
What the self-employed should check to keep freelancing through COVID-19
Freelancers, as independent contractors, should have the right to organise their own work as they see fit.
To make sure that’s the case, look at the Performance, Control, Obligations and Amendment sections of your contractual agreement with your client(s). These sections set out services that are to be performed and the control you have around how they are performed. It should also prescribe a timescale or deadline for the project and have information on what will happen should there be any delays.
Check out what each party’s obligations are under these sections of the agreement. Do you have a right to provide your own equipment, and to determine in what way the services will be provided? Who has liabilities depending on the deadlines of the project?
These sections of your agreements should hopefully allow for the right to modify the services, or to adapt to new conditions. And yes, a pandemic in most reasonable people’s minds is definitely going to constitute ‘new conditions’! Either way, freelancers should drill down into these sections and use the wording within to collaborate with clients and suppliers to adapt to the new normal.
While of course the main aim for many self-employed freelancers will be to keep the contract in place, so that work can continue, it is important to be able to negate any liability if anything does have to come to an end.
In principle, contracts that require ongoing performance are absolute which means that if a contractor or freelancer was unable to carry on his or her supplier obligations (such as due to illness or having to self-isolate due to coronavirus), you could be liable and the contract could be terminated. One contractual exception to this is the Force Majeure clause.
This clause will deal specifically with how the parties’ obligations will be affected by an event which affects one or the other’s ability to perform. But check the wording to see what force majeure means in your contract. It is usually only obligations being made illegal or impossible that are likely to be relevant.
So, is COVID-19 a force majeure event? It depends on your contract, its wording, and on the level of your contractual obligation.
It is definitely arguable that COVID-19 is making some types of work impossible. A self-employed freelancer seeking to rely on a force majeure event as a reason for not performing services would need to establish the pandemic has prevented them from doing so. If the wording requires that performance of services be rendered completely impossible, there could be a burden on the freelancer to show that they could not have sourced staff, equipment or materials from elsewhere. If you are required to take “reasonable” measures (a phrase contracts often like to use), this would be considered objectively. There may also be a requirement to notify a supplier that a force majeure event is occurring.
Do unto other suppliers…
Therefore, start thinking about whether you might need to rely on this clause. While you try to find ways to continue working, make sure you document these attempts. That way you can show that you reasonably took every measure you could, and performance was impossible.
And for your own business’s supply needs, don’t take it for granted that suppliers know that services cannot be performed. A bit like you will have to do with your own clients, reach out to them to ensure that suppliers notify you of any difficulties they are having and ask them to warn you if services might need to be stopped. You ought to do the same with your own clients.
Lastly, use the force majeure clause to your advantage. Establishing force majeure avoids default termination of services. This could be used to negotiate an extension of target dates. Here, parties will normally bear their own costs for delay. Be proactive and work with suppliers and clients.
No, I’m not referring to how most of us probably feel, trying to do business amid a pandemic! Rather, other than force majeure, there is alternatively the general rule of frustration. This rule means that a sole trading, self-employed freelancer will not need to perform obligations if there is a change in circumstances which make it physically or commercially impossible to perform, or the services would be radically different. Helpfully, there does not need to be a specific clause included in a contract for this; rather, it is a general rule which applies to all contracts for the performance of services.
Be aware though, the bar for this is high. It has been suggested that it is likely that ‘frustration’ will be met in countries hit by coronavirus where there is an imposed total lockdown. With anything less than a lockdown, the force majeure clause may be more useful.
Security when remote working due to coronavirus
In an increasingly online world, many of the services we provide can be fully provided, or at least partially provided, from home. If this is the case, freelancers still need to ensure that they are respecting the confidentiality of information.
When working from home, be aware of the privacy risks that this might pose. The Information Commissioner’s Office could still impose fines at the end of the pandemic if appropriate measures have not been taken by small businesses as well as large. Make sure that it is only you who has access to your computer and, if it or other work materials will be left in your home for periods, make sure it is suitably secured. Consider encrypting files and password protection to make sure information is safe.
Hopefully these tips are a starting point for planning how you as a self-employed freelancer will not just cope during the pandemic, but will continue to turn a profit. In summary, consider the services and the contractual clauses, monitor the situation, renegotiate where necessary and, most importantly, stay safe!