EAT Rules that Lap Dancer was an Employee

EAT Rules that Lap Dancer was an Employee.
Many employment rights - including the right to sue for unfair dismissal - are confined to employees. Defining just who is and who is not an employee has long proved something of a challenge for the courts and tribunals.

Take, for example, the recent decision of the Employment Appeal Tribunal (EAT) in Quashie v. Stringfellows Restaurants Ltd. Q worked as a lap dancer at Stringfellows. She was paid in what was described as "Heavenly Money " - vouchers paid to her by customers which Stringfellows later redeemed for real money minus deductions. Those deductions included commission payable to Stringfellows, a "house fee" and fines. Dancers were fined for such things as being off rota or late for a shift or stage dance. Dancers were also required to pay a set fee to the "House Mother", who was responsible for ensuring that the dancers were well turned out and for looking after the dancers' general wellbeing. Q's earnings came entirely from the customers. On any particular night, it was possible that her earnings might be less than the amount she had to pay out, with the result that she would earn nothing for that night.

When Stringfellows terminated Q's contract over drug dealing allegations, she sued for unfair dismissal. Stringfellows had two lines of defence. It argued, first, that Q was not an employee and, second, that Q's contract had been illegally performed by reason of her tax returns and claims for tax credit. Dealing with the employee point as a preliminary "knock-out" point, the Employment Tribunal ruled that Q was not an employee.

The EAT allowed Q's appeal. Although Q's earnings came entirely from customers, rather than Stringfellows, she was being paid for work done. Employment status is not a matter of the source, or the route, of the payment. The Employment Tribunal had been wrong to focus too narrowly on the "wage/work" bargain. Q had been obliged to turn up for work in accordance with the rota. She was not entitled to send a substitute. The imposition of fines or deductions by agreement implied an ongoing relationship.

The EAT sent the case back to the Employment Tribunal so that it could hear Q's unfair dismissal claim and deal with the illegality point.

Whether or not an individual is an employee will always depend on the facts of the particular case. Employers need to appreciate that an Employment Tribunal will always look at the substance, or reality, of the situation. It will not be bound to accept the particular label which the parties have chosen to put on their relationship. Even an individual whose contract clearly states that he or she is not an employee may, in fact, be an employee in law and have all the rights of an employee.

To find out more, please contact Nick Crook or Gareth Pobjoy.
Filed: 14/05/2012 09:07:07