So, we now have a ruling from the EAT on the employment status of lapdancers… Miss Nadine Quashie’s case is being appealed by Stringfellows to the Court of Appeal so we should not get too exercised yet as to the extent of the mutuality of obligation between the club and Miss Quashie which swayed the court to overturn the tribunal’s findings and decide in her favour.

However, this decision could certainly open the doors to a raft of employment claims from dancers and similar performers who are not treated as employees in any formal legal or tax sense but who are obligated to the organisation that uses their services.

Miss Quashie worked as a lapdancer for Stringfellows who did not pay her. She received vouchers (called ‘Heavenly Money’) from customers, which would be tucked inside her garter. She would later produce these to the club, which would redeem the vouchers for cash, after making certain deductions. In this way, Miss Quashie would typically earn around £200,000 a year.

It all came to grief when Miss Quashie was dismissed for alleged drug taking, a charge she disputed. Miss Quashie wanted to claim unfair dismissal but to do so, had to prove she was an employee.

We are all familiar with the elusive tests that assist the courts in determining whether an employment relationship exists. The court noted that the supply of dancing services was personal and could not be assigned or sub contracted. Fines were imposed for being late or missing a dance.

On the question of ‘mutuality of obligation’ the EAT found that it was clear that there was a contract on each night Miss Quashie was engaged. There were obligations on both sides. The question that flowed from that was whether there was sufficient control by Stringfellows to connote a contract of employment. The EAT criticized the tribunal judge’s narrow focus on the wage/work bargain. The point was that she had to perform at the direction of Stringfellow’s management. On the nights she attended, the club was obliged to provide her with the opportunity to dance and she was obliged to work as directed. She would be fined if she did not stick to the contract in terms of performance. The EAT found that not only was there a contract of employment on each occasion she worked but there also existed an umbrella contract ensuring continuity of service.

A point little highlighted in the media and other reporting of this case is of course the complication that Miss Quashie had not been declaring tax as an employee. She had further made misrepresentations to the Revenue as to her earnings (which she blamed upon her accountant). The EAT opted to remit the question as to whether this rendered the entire contract illegal to a fresh tribunal which would carry out a proper analysis of the figures and facts.

This could ultimately leave Miss Quashie in an unpleasant situation. If the finding that she is an employee is upheld but she fails to persuade a tribunal that she has been unfairly dismissed even if the contract is held to be legal she has exposed her status and earnings to HMRC to whom it is open to carry out an investigation into how much back tax it may be owed. In any event, a tribunal may find that the contract is illegal because of her dealings with the Revenue and she is again left without any unfair dismissal claim to fall back on.

For other dancers, they may receive employment protection in a notoriously fickle industry but the price may be the proper tax regulation of what can be, as in Miss Quashie’s case, significant earnings. This could be a double edged sword.
As always, each of these cases rests on its facts and there may be clubs that exercise less control over their dancers. This decision by no means makes it clear for such performers whether they are employees or not. Arguably, in some instances, it could make the position worse. We await the Court of Appeal hearing with interest. Miss Quashie may simply have won a bittersweet skirmish in a bigger battle.

Susan

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