Court of Appeal overturns ruling on Stringfellows dancer
A few months ago, we reported the interesting case of Quashie v Stringfellows Restaurants Ltd , in which the EAT held that Miss Quashie, a lap dancer, had employee status. Since then, Stringfellows has appealed the decision to the Court of Appeal, which has overturned the decision of the EAT and held that Miss Quashie cannot be afforded employee status.
Miss Quashie worked as a lap dancer for Stringfellows, on a rota system which obliged her to work on particular days every fortnight. Her earnings came entirely from what she was paid by customers and it was possible on any particular night that they fell short of the amount required to be paid in “tip out” fees to the club (to cover the cost of the club DJ, hairdresser and other club facilities). This would often result in Miss Quashie finishing her shift with no take-home pay, and perhaps even being out of pocket.
The Decision of the Employment Appeal Tribunal
As discussed in our previous blog post, the Employment Appeal Tribunal ruled that Miss Quashie was an employee – a somewhat surprising decision! The tribunal held that there was a mutual obligation as Miss Quashie had to attend work in accordance with the rota and, in return, Stringfellows had to give her the opportunity to dance. The fact that Miss Quashie might not earn anything on a particular evening bore no relevance. According to the EAT, a requirement that wages will not be paid unless a certain performance is achieved is not inconsistent with the notion of mutual obligation.
Some Clarification by the Court of Appeal
On hearing the appeal brought by Stringfellows, the CoA stated that the key question was the nature of the contractual obligations between Stringfellows and Miss Quashie during her working hours. It held that the most important factor to take into account was that Stringfellows was under no obligation to pay Miss Quashie any wage at all. She negotiated her own fees with customers and only received money from Stringfellows (after deductions) that had come from customers.
The Court decided that Stringfellows did not employ Miss Quashie to dance; rather, she paid Stringfellows to be provided with the opportunity to earn money by dancing for clients. The Court’s decision was reinforced by the terms of Miss Quashie’s contract, under which she agreed to conduct her affairs on a self-employed basis, paying her own tax. The Court can take into account to the way in which the parties have categorised their relationship, even though parties cannot agree to fix the status of the relationship.
The Court of Appeal placed great weight on the fact that Stringfellows was under no obligation to pay Miss Quashie, as she was essentially paid by third parties. Although the Court was careful not to rule out the existence of a contract in all cases where there is no obligation to pay a wage, it stated that “it would…be an unusual case where a contract of service is found to exist where the worker takes the economic risk [of not being paid] and is paid exclusively by third parties”.