Contracts are a fine art

When a dancer at Stringfellows lap dancing club Angels was dismissed, the Employment Tribunal (ET) had to decide whether she was employed and could bring an unfair dismissal claim. For there to be a contract of employment three core elements must exist: obligation of personal service; employer control of the employee in the performance of their work; and mutuality of obligation.

That Nadine Quashie was required to perform her work personally was not in doubt. After reviewing the contractual documents and evidence as to what happened in practice, the ET also concluded that the level of ­control exercised over Quashie was sufficient to satisfy that requirement. She had to abide by numerous detailed house rules, including as to image and dress code, work a minimum number of days, conform to ­instructions as to what she should do when on stage, and so on. Neither finding was challenged before the Employment Appeal Tribunal (EAT).

Mutuality of obligation is the irreducible minimum for a contract of employment to exist. This usually means an obligation on the employer to provide, and on the employee to perform, work. The ET, focusing ­narrowly on the wage-work bargain - that on any given night Quashie might earn nothing from her work as she would not earn sufficient ’Heavenly Money’ (vouchers exchangeable for cash) - decided that there was no mutuality of obligation and therefore no contract of employment. The EAT reversed the decision on this point on the basis that it was contrary to the ET’s findings of fact and therefore appealable. The EAT said that on any given night Quashie had a contract of employment and was thus an ­employee on that night.

Having satisfied the three essential elements for the existence of a contract of employment, the EAT then considered whether or not Quashie was engaged under an overarching contract spanning periods when she was not at work. If not, all she had were separate contracts of employment on each night she worked, with no continuity and therefore no unfair dismissal claim. The combination of her nights worked, restrictions on any extended holidays, an obligation to attend regular Thursday meetings and the expectation and practice of continuing work led the EAT to determine that the relationship was one involving continuing employment under an umbrella contract.

The case has now been sent to a fresh ET to determine whether Quashie was dismissed unfairly, and also whether her contract of employment was void for illegality in the light of certain representations made by her to HM Revenue & Customs.

How relevant is this decision? It is to a substantial degree fact-specific. It is likely to be highly relevant to lap dancers at other establishments. It may also be relevant to other regular performers attached to particular ­entertainment venues - musicians are one group that springs to mind.

However, its main value probably lies in the way in which it highlights the importance of a thorough ­analysis of the facts, contractual ­documentation and what happened in practice, at the expense of accepting the label that the parties have placed on their arrangements (in this case self-employment), whether that is said to be industry practice or not.