You must learn a lot as an Employment Judge, daily granted glimpses into the inner workings of all sorts of industries and businesses. Some of it is undoubtedly pretty grim but in not many other judicial roles could you come into work one day and go home with more knowledge of lap-dancing than would be easy to explain over dinner.
And all in connection not with harassment or misconduct or discrimination, but with the issue of employment status. The question for you today – are lap-dancers employees?
In this case, an individual who worked at a lap-dancing club in London received no pay or other remuneration from the club itself, being tipped or paid by clients directly in the house currency, ‘Heavenly Money’. From this sum deductions were made to pay towards a ‘House Mother’ who looked after the dancers, their hair and make-up each night; a DJ; hairdresser; and other facilities. In addition, the club would deduct a nightly ‘house fee’ and ‘commission’ from the sums received by the dancer, as well as any fines that fell due under the ‘house rules’, e.g. for being late for a shift or a dance or for the weekly ‘team meeting’. Dancers would choose and supply their own routines and costumes, subject to the club’s guidelines. If a dancer did not wish to work, she would simply notify the club in advance and would not be put on the rota for that week, although any absence from the rota greater than 4 weeks would give rise to a requirement to ‘re-audition’.
In this case, there was no dispute that the dancer was required to perform her services personally. Given the house rules, the requirement to attend meetings and the ability to levy fines, it was held that the club had a sufficient level of control over the dancer to potentially give rise to a contract of employment. The final question was whether or not sufficient mutuality of obligation existed between club and dancer so as actually to give rise to such a contract. The Employment Tribunal initially found that there was no mutuality of obligation in the relationship, as the dancer was not paid by the club and did not have to put herself forward for the rota if she did not wish to. Indeed, the Judge viewed her being on the rota as simply being offered a facility to dance in, with the club rules in part being necessary to enable the club to retain its licences.
On appeal, the Employment Appeal Tribunal disagreed. It found that there was sufficient mutuality of obligation to found a contract of employment with the dancer – she was required to attend when she was on the rota, she had to perform at the direction of the club’s management and she could be fined for poor performance or attendance. In addition, the EAT disagreed that the Claimant was remunerated directly by her clients, pointing out that, although she collected the ‘Heavenly Money’, she was, in effect, paid her ‘cut’ by the club once deductions had been made – the fact that she had physically collected the proceeds herself was irrelevant.
The point of this case, other than to demonstrate a surprising link between the man who washes your car in the supermarket (the subject of the last leading case on employment status) and a lap-dancer, is that employment status is a matter of law, not of contract. The Courts are very willing to delve into the facts to determine someone’s true employment status. Indeed it will be very hard for employers to convince a Tribunal that anything other than a genuine freelance situation is not an employment relationship. If it looks like a duck, walks like a duck and quacks like a duck…..