26 July 2012

Employment status — Quashie v Stringfellows Restaurants Limited


Alice Tomlin
Associate | UK

Ms Quashie was a lap dancer at Stringfellows in London. She performed at the club in accordance with her rota and was obliged to attend one evening meeting a week, for which she was not paid.

Despite the club having prepared a club agreement, which set out the contract terms, and a set of House Rules, neither of these were given to Ms Quashie. However, she did receive a copy of a booklet, entitled ‘Welcome to Stringfellows: the Cabaret of Angels’, which contained many of the House Rules; and she also signed an engagement form, provided in accordance with a council licence, which stipulated the minimum fee dances had to be paid for each dance. She was also given a copy of the rota.

Dancers have to provide their own outfits, but their needs (eg minor dress repairs, ironing, make up etc) and general well-being at the club were taken care of by the ‘House Mother’. The dancers were directly responsible for the payment of the House Mother, DJ, hairdresser and other facilities that they made use of at the club via an upfront ‘tip out’ fee at the end of each evening. During the evening, the dancers are paid by customers in the form of ‘heavenly money’ (vouchers purchased by customers). At the end of the evening, dancers are given the money that they have earned during the evening, less deductions, which includes a commission fee, a house fee and any fines (for example for being off rota, late for a shift, late for a stage/song, late for a meeting, or missing a free dance). It was therefore possible for a dancer to earn nothing during an evening or indeed to be at a loss.

Ms Quashie was dismissed for misconduct (for alleged drug taking and drug dealing) and she claimed unfair dismissal.

Stringfellows contended that Ms Quashie was not an employee.

Employment tribunal decision

The employment tribunal stated that in order for there to have been a contract of employment, the following elements had to be present:

  • Ms Quashie must provide her work personally (ie she would not be able to provide a substitute);
  • Stringfellows must have the necessary ‘level of control’; and
  • there must be a ‘mutuality of obligation’ between Ms Quashie and Stringfellows (ie a legal obligation towards each other which is a continuing overriding arrangement).

The judge held that the first two were present, but that Ms Quashie was self employed because of a lack of mutuality of obligation.

Ms Quashie appealed to the Employment Appeal Tribunal (EAT).

EAT decision

The EAT decided that Ms Quashie was an employee of Stringfellows as all the elements needed for an employment contract were in fact present. It disagreed with the tribunal judge about mutuality of obligation, deciding that there were obligations both ways: Ms Quashie owed an obligation to perform to customers; to attend the club in accordance with the rota; and to provide free showcase dances to customers. Stringfellows owed Ms Quashie an obligation to provide the opportunity for her to dance; and exchange the vouchers she earned into sterling, deducting an agreed amount for commission and fines. The EAT said that it made no difference if the lap dancer’s remuneration came by way of heavenly money – these were converted by the club to cash. The fact that Ms Quashie may not earn anything in an evening was of no consequence because it was consistent with the wage/work bargain (Ms Quashie was remunerated for work done).

Stringfellows also had control over the employment, illustrated by the imposition of fines for being late, off rota etc. This form of discipline was consistent with a contract of employment and showed the existence of an ongoing relationship between Ms Quashie and Stringfellows.

The EAT also decided that there was one single contract covering the period of 80 weeks that Claimant had been employed (meaning that Ms Quashie had more than one year’s employment and could therefore claim unfair dismissal). There were several reasons for this:

  • There was an expectation between Ms Quashie and Stringfellows of an ongoing relationship, which existed between the dates on the weekly rota;
  • Ms Quashie was obliged to attend a team meeting once a week (failure to do so could result in the termination of her contract);
  • Ms Quashie was obliged to dance on two Saturday and Monday evenings every month, which created a continuing, future obligation; and
  • Ms Quashie could not take an extended holiday, and had to notify Stringfellows when she was going on holiday and dance on the day after her return.

The only suggestion to the contrary was that Ms Quashie could dance elsewhere on her nights-off, but the EAT held that this was ‘not sufficient to counterbalance the important findings above’.

Practicalities

Until now, the broad assumption in the entertainment industry has been that workers who perform in clubs are self-employed. Although the case was decided on its facts, it is makes it more likely that people providing entertainment in clubs and other similar venues will assert that they are employees. It is also a reminder that certain elements in a relationship point clearly to employment, giving the individual a full set of rights, as opposed to worker status or self employment, where rights are limited. Mutual obligation can arise out of a wide variety of relationships which do not, as in this case, look like traditional employment.

Alice Tomlin Associate | London

Category: Article