Some Notes on the Legalities of Collective Work

Ahhh, collective work! It’s definitely not for everyone, but I firmly believe that combining our forces is the only way to make change happen. There are many particularities in this type of work, and as a legal worker, I often get questions from working groups who have received a collective grant for a project. The NO NIIN crew and I figured it could be helpful to talk a little about two of the most commonly asked questions: the legal status of a working group and making payments to people not part of the core group. Read on!

Some definitions first:

1. In this article, when I talk about a working group, I mean a group of independent art workers or researchers who have decided to come together for a common goal, to work on a project (for which funding or a grant has been secured, or the working group plans to apply for funding). Individuals in the working group may do the project within the framework of an association or other legal entity or just as an informal group of individuals. The minimum requirement of a working group is two members.

2. By conflict, I mean anything that disrupts the mutual understanding and work between the group members and negatively affects the internal dynamics of the group.

3. I use agreement and contract interchangeably, although they are not exactly synonyms. It’s a binding document with at least two parties who have made it voluntarily, where at least some basic facts about the project are agreed upon.

As you can see, the definitions are really broad and vague. That’s why expectations with the group can vary as well. I get that you might want to base your project on trust, and that’s great! How about deepening that trust by putting your goals in a written form? Unfortunately, conflicts happen, and collective situations can easily become unbalanced without proper discussions about the division of power and hierarchy. Sometimes people break your trust, especially when the project is important to everyone, stress levels can quickly rise, and that’s when the worst can come out. I strongly advise anyone who wants to work on a collective project to make a written agreement between the group members.

There are many online resources on how to write agreements. An agreement between working group members is not an employment contract so that you can agree about almost anything. The downside of that freedom of contract is that you are not very well protected if there is an ethical problem within the group. Situations involving harassment and abuse of power can be the most difficult to get help with and leave you feeling completely powerless (NB! If you have been a victim of a crime, you should always report it to the police). Unlike in an employment relationship, there is no institution you can directly go to as a working group member. Your options are pretty limited outside a mediated discussion and suing the other person. However, the more difficulties you have anticipated, the fewer surprises and ambiguous situations will arise.

Working together doesn’t mean the same for everyone, so take time to reflect on how you want to function as a group. The funders usually require a “Contact Person,” often called the working group leader. Groups sometimes assign the role arbitrarily to one person without giving it more thought. However, the reality is that the contact person has more responsibility (and power) than others. They might even have the right to exclude other members from the group, and on the other hand, their workload may become unbearable if you don’t clearly share the tasks. To avoid problems, it can be good to ensure you are on the same page about all this means in your group dynamics. Make sure everyone knows why the working group leader was assigned the role in the first place -was it just to fulfil the grant application requirements, or was there another reason? Then write this and other group members’ roles down in your agreement.

In many cases, it can be helpful to either use a pre-existing association or other legal body or form a new one for administrative reasons. Finland is the land of a million associations. Founding a registered association is perhaps the easiest way to provide some structure for your working group: the accountability to the association’s board and legal requirements for dealing with finances add some security to everyone involved. Every project is different, though, and there isn’t a solution that fits all. For example, a short-term project with few members working part-time may be easier to handle with less bureaucracy.

The funder is not your employer. Ultimately, the working group is responsible for internal and external conflicts and getting the project done. The funder can mediate to find a solution but will most likely prefer not to participate in your disputes. I contacted some of Finland’s most prominent private foundations (Kone Foundation, SKR and Svenska Kulturfonden) to ask how they see their role in working group conflicts. While all said they could provide some help with conflicts, they also emphasized the responsibility of the group itself. None of them offers legal services.

Other things you might want to include in the agreement are internal and external communication about the project, timeframes (deadlines and working hours), intellectual property rights during and after the project, transferring these rights to third parties, crediting people, compensation for work, and breaches to the contract. Think of what is essential and specific to your project and seek legal help if you are unsure how to word it.

It should be mentioned that agreements and other legal or administrative arrangements are not foolproof ways to avoid trouble. Problems may arise even though you have tried to be prepared for everything, so constant non-violent communication throughout all phases of your collaboration is even more important than the written documents.

Ok? Ok. Let’s move on to the next issue.

Sometimes you might want to hire people outside your working group to help with the project. There are several ways to do it. When budgeting, make sure you understand what different forms of compensation include in terms of responsibilities, charges and taxation. Let’s go through them super quickly!

Grant (apuraha)

If the person you want to pay is doing artistic work or scientific research, paying their fee as a grant is probably one of the best options. You can simply make the bank transfer and note it in your budget, and they will then report it in their own tax return. But this is something you absolutely need to check with your funder - they might have their own system in place for grant payments. Also, if the person receiving the grant is not mentioned in your original grant application, the funder may not accept that their fee is paid as a grant.

Wage (palkka)

Paying someone’s fee as the wage is the heaviest for the payer in terms of administration and responsibility, and it is often the best for the person receiving the payment. You ask them to give you their tax card for wages. Then you pay the income taxes (deducted from the wage), pay holiday compensation, all the mandatory contributions (on top of the wage), and of course, what is left from the wage after income tax has been deducted. You have to pay several compulsory employer fees in addition to the actual wage, so make sure you consider this when making your budget.

Trade income (työkorvaus)

There is a separate tax card for trade income, and for the employer, it’s easier to deal with than wage since nothing comes on top of the actual fee (unless the payee has to pay VAT, but we are not getting into that right now). The one receiving the payment is responsible for their own insurance, and the one paying only takes care of the income tax, which is deducted from the fee. Paying trade income is not possible in all situations, however. It is mainly used in cases where someone is freelancing and doing a gig remotely (writing an article, for example). You can read more about the requirements on the Tax Administration’s website.

Invoicing (laskutus)

If the one you are paying has their own company, you can ask them to write an invoice. That’s simple since you know the total immediately and just make a bank transfer. There are also light entrepreneurship services available, where an individual can sign up on a website and have the company send an invoice against a fee. From the payer’s point of view, you have to know that the sum of the invoice will be much bigger than what the person working for you gets because now it’s them taking care of all the mandatory fees and possibly VAT.

Make sure to be clear about the type of compensation you both have in mind when you negotiate so that there are no surprises -it’s crucial that whomever you are paying gets fair compensation for their work and also that you don’t have to compromise your project because of some surprise fees.

Unfortunately, we don’t always have the option of working only with people for whom we have mutual respect and appreciation. Even so, don’t be afraid to share ideas, have fun, communicate, and ask questions. That’s how we keep learning and changing for the better!