We previously wrote an article in May 2012 on a decision made by the Employment Appeal Tribunal (EAT) that a dancer at Stringfellows was an employee (please see the article here – Lapdancing in the Employment Appeal Tribunal). Stringfellows appealed the decision to the Court of Appeal who have reversed the decision of EAT and said the dancer was not an employee!
Whilst the examination of the principles are the same, the Court of Appeal disagreed with the EAT’s conclusion that the dancer was an employee. The EAT decided she was an employee because they said there was sufficient mutual obligations between the parties to provide and do work, and that the fines and also the deductions made by Stringfellows implied that there was a contractual relationship consistent with employment.
The Court of Appeal felt that there were insufficient mutual obligations and particularly focused on the fact that Stringfellows was under no obligation to pay the dancer anything at all. The dancer negotiated her own fees with customers and took the financial risk that she would not earn anything at all on any given night. The Court of Appeal felt it would be very unusual to find an employment relationship where an individual is paid entirely by third parties. In addition to the main point about the dancer’s payment terms, the Court of Appeal did also take into consideration the terms of the contract between the dancer and Stringfellows, which showed an agreement between the parties that the dancer was considered to be self-employed. Although courts can look behind labels assigned to a contract, they can take into consideration the way in which the parties have chosen to categorise the relationship, which in this case was self-employment.
The case really highlights that the determination of employment status is one that is dependent on the individual facts of each case and is by no means straightforward! Employment status arguments can have important implications on whether individuals are eligible to bring certain claims, such as unfair dismissal. Therefore, if there are questions around employment status it is important to seek advice.
If you would like to talk through a situation you are dealing with, or if you need advice on employment status matters, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.