The claimant worked intermittingly as a lap dancer in Stringfellows Night Club (“the appellant”). She was told she would no longer be allowed to work in the club because it was believed she had become involved with drugs on the premises.

The claimant brought an Unfair Dismissal claim and the preliminary issue as to whether she was an employee arose. There was then a second issue of whether she had the necessary qualifying period to bring a claim of Unfair Dismissal.

The claimant did not have set hours, working on a rota. She booked which nights she would work and in practice averaged only 2 nights a week for 42 of the 80 weeks she claimed to be employed, although she did have to work certain nights every few weeks. The claimant had to abide by the rules of the club but provided her own costume and was paid not by the club, but by the clients with the club taking a commission and charging a house fee per night.

Applying the multi factorial test adumbrated in Ready Mixed Concrete the Tribunal found that there was an obligation to provide work personally and the club did have some control over the claimant but that there was no mutuality of obligations and hence no employment relationship. The Tribunal also noted that the claimant was not paid by the appellant. The EAT overturned this finding and stated that there was an obligation to pay the claimant. The EAT also found she was subject to a contract of employment on any given night when on duty and when there was no rota in place and she was not working there was still a continuing obligation.

Lord Justice Elias in the Court of Appeal decided that the EAT had not been entitled to overturn the finding of the Tribunal that the appellant was under no obligation to pay the claimant, this finding not having been in any way perverse, and further strongly disagreed that the appellant was in any way bound to pay wages. He compared the situation to that of a caddie in Cheng Yuen v Royal Hong Kong Golf Club, where the caddie was found only to have a licence to offer himself as a caddie at the premises and placed heavy reliance on the fact that the appellant did not pay the claimant – she in practice paid them to be allowed to dance at the club. He stated that

“it would be an unusual case where a contract of service is found to exist when the worker takes the economic risk and is paid exclusively by third parties.”

The terms of the claimant’s contract which accepted that she was self employed, and would pay her own tax and not receive holiday or sick pay, reinforced the conclusion that the claimant was not an employee. The Court of Appeal upheld the appeal and restored the finding of the Tribunal. The second issue of continuity of employment did not then arise.

http://www.bailii.org/ew/cases/EWCA/Civ/2012/1735.html