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Last year there was an important employment law case about employment status that showed that Employment Tribunals would focus on the actual reality of working relationships when determining whether someone is self-employed or not, and not focus on what the contractual documentation actually said (Autoclenz v Belcher, see the details here).
This year there has been another important case, Quashie v Stringfellows Restaurants Ltd, to determine whether a Lap Dancer employed by Stringfellows was self-employed or an employee.
In this case the Employment Appeal Tribunal found the most important factor in determining the employment relationship was the control that the Employer had over the individual and Mutuality of Obligation was placed in a secondary position.
Ms Quashie’s work at Stringfellows was governed by several documents:
From these documents Ms Quashie had the following obligations:
The Employment Tribunal decided Ms Quashie was not an employee as they felt there was no mutuality of obligaton – the club was not required to pay the lap dancers and they were not obliged to provide work.
Ms Quashie appealed and the Employment Appeal Tribunal (EAT) decided she was an employee because they found that:
These 3 elements must be present for a contract of employment to exist and the EAT decided they were. The Tribunal also considered the other relevant factors, that determine employment status, such as:
The EAT decided she was an employee, but then had to decide if there was an ‘umbrella’ or ‘over-arching’ employment contract covering the 80 weeks she had worked at the Club, as she had not worked continuously for the 80 weeks.
The EAT decided an Umbrella Contract was in existence because:
This case is very fact-specific but it shows the importance of looking at all the facts in the relationship between parties when deciding someone’s employment status.
It is also important because it shows that the more control an organisation seeks to have over it’s workers, who they believe are self-employed, then the more likely it is that they will actually be employees.
However, the EAT have referred the case back to an Employment Tribunal to decide if there was unfair dismissal but also to decide if there was ‘illegality’ in the contract. Ms Quashie had represented herself as self-employed to HMRC (and also claimed tax credits and may have mis-represented her earnings and expenses when doing her annual tax returns) but now has been found an employee.
We’ll keep an eye on the ‘illegality’ issue and let you know what happens next!
They found she was not an employee because:
The Court found that the key factor was the lack of obligation to pay Ms Quashie and the express contractual arrangements which indicated that the agreement in place did reflect the reality of the employment relationship.
If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to us at The HR Kiosk (click here) – a Human Resources Consultancy for small businesses – you can retain us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.
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