Employment e-Brief – Employment Status Update

Thursday 10th May 2012

The EAT has recently reversed a Tribunal’s decision in the case of Quashie-v-Stringfellows Restaurants Ltd regarding the employment status of a lapdancer.

The Tribunal in the first instance found that the Claimant was not an employee for the purposes of an unfair dismissal claim. This was on the basis that although she was under the control of the Respondent and provided personal services as a dancer, there was insufficient mutuality of obligations for her to be considered as an employee.

However the EAT allowed the appeal on the basis that the Claimant was on a rota and obliged to work according to it and there was a reasonable argument that the Respondent was obliged to let her carry out that work.

The EAT found that the Claimant worked under a standard contract, albeit an umbrella contract covering each separate engagement, and that the relationship in the industry was generally understood to be one of self-employment. As previously mentioned the Claimant worked from a rota and was expected to work when on the rota and the Respondent controlled the Claimant’s activities whilst at work, for example she could not refuse a client a dance.

The Claimant was also paid by the Respondent for the ‘Heavenly Money’ vouchers received from clients, with deductions made to the Respondent for commission and other fees. Fines were also imposed if the Claimant was late or off rota, which implies that there was an ongoing relationship. Therefore the EAT found, on proper construction of the facts, that the Claimant was an employee. There was an expectation of continued engagement between the parties therefore there was sufficient mutuality of obligation for employment status.

In addition the EAT found that the Tribunal had been wrong to find that as the Claimant’s earnings came from clients and not the Respondent there was not an employment relationship. The source, and route of payment, bears no significance to determining employment status.

The EAT therefore held that if there is a wage for working and there is control and personal service then employment status can be established. Therefore the EAT sent the Claimant’s case for unfair dismissal back to a fresh Tribunal to consider and allowed the Respondent’s cross-appeal on the issue of illegality on grounds of the Claimant falsely representing her income in tax returns and in her application for child tax credit.