[foundation-board] Fwd: really and truly version of report

Thu Nov 27 12:53:03 UTC 2014

Dear Board,

I have worked with Morris to produce some small but significant revisions
to his report with the plan of putting this online publicly (something that
Martin at Omidyar has been very keen on). Overall I am also keen for this
to happen, but given the content of the report this is something that the
Board also needs to approve (esp if any liability questions).

Apart from for a change around our history at the very start, the main
change is in the* section about consultants and employees.*

I have attached both final version (PDF) and a track changes doc that
illustrate the main changes (though it does not show deletions very
clearly, at least not for me).

In addition, I have inlined below the section regarding contractors and
employees which was the foci of changes (note the text below will not show
the track changes).

Rufus

*3. A problem in relation to consultant and employee status*

For most of its existence, OK “staff” have been on consultant contracts,
tied to project work. The reason for this treatment was clear and fair
enough at an earlier stage: projects came in sporadically, consultants were
taken on for the length of the projects, and they left when the projects
were done.

But as the flow of projects increased, some consultants were kept on, and
eventually many of them were provided with annual contracts, and moved from
one project to another as one ended and another kicked off. Moreover, by
the end of 2012, job descriptions were developed for some of these people,
and they were put in units with line management. All of this, of course,
makes them look, and very likely makes them *be* (in many of the
jurisdictions in which they work), actual employees, regardless of what OK
calls them. And this would trigger employer costs of various sorts,
depending on the jurisdiction.

OK began to respond to this in the fourth quarter of 2012, though only
taking concrete action in the UK. At the time of writing, 24 out of 28 UK
staff had been converted to employment,. This was done on a staggered basis
given other work demands on the Operations Unit. (I was advised that the
other UK staff, for one reason or another (e.g., they have work with other
organizations at the same time) are clearly not *de jure* OK employees.)

The situation is less settled elsewhere. There are four full-time staff
working from Berlin, none of whom is an employee yet. There are plans to
consult a German lawyer on converting them to employment status (and to
determine what administrative and other responsibilities that will impose
on OK), but nothing definite had happened at the time of writing. There are
three full-time consultants in the US, and a total of nine other full-time
consultants scattered across seven other countries. There are no plans at
the moment – out of the crush of other things that need doing – to
determine their status under local law, let alone to respond to a
determination in any of those places that they are indeed OK employees.

There is potential very significant liability here, at least because, in
the event that the UK government learns about their prior treatment, and
determines that all the UK-based consultants were in fact employees for
some periods at least, OK would be liable for employer-related National
Insurance contributions. (Given that no research has been done in relation
to the relevant law and regulations in the other jurisdictions involved
here, I can’t say what the potential liability would be in those places (if
the consultants there are deemed to be, and to have been, employees).)

As with the other problems discussed above, the Board has been apprised of
this matter and has discussed it regularly, including over the period
(until October 2012) when their legal counsel sat on the Board.

While I cannot speak to the risks here, I do think that, at a minimum,
inquiries with a UK and a German solicitor need to be done, with an aim of
obtaining formal advice on how to proceed in both jurisdictions. (Laura
advises that they have been “in talks” with their UK solicitor.  What is
needed, however, is formal advice that gives OK some comfort that their
approach is appropriate in the UK and advice about how to proceed in
Germany.)

*[Update, 26.11.14: I have been advised by OK, but have not independently
confirmed, that “**initial review of the international employment situation
began in Q4 2013. In June 2014 [ok] made this a top priority post
OKFestival in July and with support from Omidyar Human Capital have been
moving forward. As of November 2014 review and planning are [proceeding]
rapidly including consultation with experts such as lawyers in key
jurisdictions (e.g. Germany, Netherlands, US).]*

---------- Forwarded message ----------
From: Morris Lipson <morrisdlipson at gmail.com>
Date: 27 November 2014 at 08:07
Subject: really and truly version of report
To: Rufus Pollock <rufus.pollock at okfn.org>
Cc: Martin Tisné <mtisne at omidyar.com>, Andrew Clarke <aclarke at omidyar.com>

Dear Rufus,

Please find the final version of the report which we've negotiated and
agreed on and which you should feel free to post on your website
should you and your Board so choose. As is my regular practice, I have
only provided a PDF version of this document for you, though will
provide a Word version to Omidyar, which you can obtain from them in
the event that they agree to release it.

Again, all the best with OK as you move forward.

Morris

-- 

*Rufus PollockFounder and President | skype: rufuspollock | @rufuspollock
<https://twitter.com/rufuspollock>Open Knowledge <http://okfn.org/> - see
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