Employment law recognises three types of status dependent on the nature of the relationship between the ‘master’ and the ‘servant’. Those are: employee, worker and self-employed contractor. The law provides for varying rights applicable to each category of individual. Suffice to say that employees have the widest spectrum of rights (including the ability to claim for unfair dismissal which is not available to workers or self-employed persons).
An employee is defined under the Employment Rights Act 1996 as “an individual who has entered into or works under… a contract of employment”. A contract of employment is defined as a “contract of service or apprenticeship”. The main legal tests can be summarised as follows: (1) the employee agrees, in consideration of a wage or other remuneration, to provide his or her own work and skill in the performance of some service for the employer (known as mutuality of obligation); (2) the employee agrees, expressly or impliedly, that he or she will be subject to the employer’s control in the performance of that service (the control test); and (3) that the other provisions of the contract are consistent with a contract of service. There are other aspects to these legal tests. HMRC provides a useful checklist which can be used as guidance on the issue of employment status. For details see:
The Court of Appeal was recently faced with a case (Stringfellow Restaurants Ltd v Quashie) concerning the employment status of a lap dancer who was paid by customers in vouchers which were exchanged for cash at the end of the night (less certain deductions made by the club). She negotiated her own fees with clients and ultimately carried the financial risk in that she could be out of pocket on any given night. The dancer was required to attend weekly meetings at which rotas would be set and she was required to work on certain nights of the week.
The Employment Appeal Tribunal decided that Ms Quashie was an employee and that there was a contract of employment in place because she was required to perform the work personally and the club was obliged to provide her with work. It was also noted that she was subject to a system of fines for disciplinary matters. Stringfellow had maintained all along that she was self-employed. The Court of Appeal agreed and overturned the EAT decision finding that she was not an employee. The Court of Appeal held that although there was a contract, it was not a contract of employment because the way in which Ms Quashie was paid made it clear that Stringellow were not obliged to pay her at all.
In a similar vein, the Court of Session recently ruled on the ability of a golf caddie to claim for Jobseekers’ Allowance (Saunderson v The Secretary of State for Work and Pensions). The caddie worked during the spring and summer months but was not engaged from October onwards. His application for Jobseekers’ Allowance was refused because it was argued that he failed the test of not being in remunerative work. A tribunal held that he was not entitled to the benefit because he was a self-employed seasonal worker who had a “recognisable cycle of work” and “was in remunerative employment”.
The Secretary of State suggested that being without any other employment during the winter months was a normal feature of self-employment as a golf caddie. The Court of Session recognised that some activities of self-employment can be described as continuous despite periods of idleness. However, it held that categorising the seasonal work as self-employment was not sufficient to get away from the proper question: when the seasonal activity came to an end, can the caddie be said to be ‘in work’. The case was remitted to tribunal to address that question.Jack Boyle Solicitor – Employment Law