Lessons from LapDancers

Many businesses try to avoid liabilities as employers by taking on workers on a freelance or self-employed contractor basis. They then carefully draft contracts to justify that status.  There’s always a risk though that the worker will claim employment rights anyway, saying that the main employment tests of ‘mutuality of obligation’, ‘control’ and ‘personal service’ are satisfied.

In Stringfellow Restaurants Ltd v Quashie in the Court of Appeal, Ms Quashie was a lap-dancer who was dismissed by Stringfellows. The Club argued that she was not an employee and could not therefore claim unfair dismissal.

The Employment Appeal Tribunal took the view that Ms Quashie provided the services personally (she could not send in a substitute) and that even though she was only engaged per shift, she worked under an 'umbrella contract' with the expectation of future shifts, and so there was sufficient mutuality of obligation for an employment relationship to arise. Furthermore Stringfellows exercised ‘control’ over her because they imposed disciplinary fines on lap-dancers who breached their rules.

However the Court of Appeal took the view that even though there were mutual obligations of some kind in place when she was actually working, she was still not an employee because she negotiated her own fees with clients and took the economic risk of being out of pocket on any particular night.

This case emphasises the need for careful drafting if you want to avoid employment liabilities arising by calling workers ‘self-employed’ instead. The differences in view of the EAT and Court of Appeal show how problematic this question can be, even for rather less exotic businesses than Stringfellows.

James Carmody

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