In another case showing the willingness of tribunals to look beyond the paperwork put in place by businesses and their staff, an employment tribunal has found that a hairdresser who worked under a consultancy agreement with a salon for five years was an employee.
Ms Gorman started work as an apprentice at Terence Paul salon in Manchester in 2013. Following her qualification in 2014, the salon provided her with an ‘Independent Contract for Services’ in which it agreed to engage her as a ‘self-employed hairstylist’. This document confirmed that Ms Gorman was not, and did not wish to be, an employee of the salon.
In 2019, the salon closed. Ms Gorman subsequently issued a claim for unfair dismissal, sex discrimination, notice pay, holiday pay and redundancy pay. Since the salon disputed that Ms Gorman was an employee or worker, a preliminary hearing took place to determine this issue.
The tribunal noted that Ms Gorman was 19 when she started work for the salon and that she did not understand (and was unable to negotiate) the terms of the contract.
It also found that the contract did not reflect the reality of her working arrangements. Ms Gorman was subject to strict control by the salon when providing her services. There was mutuality of obligation, since her clients were allocated to her by the salon, she was obliged to perform services for them, and the salon was obliged to pay her for doing so.
Although the contract theoretically allowed her to send a substitute if she could not attend work, in practice this was not possible. If she was unable to work, her clients were covered by other stylists at the salon.
Further, among other things, Ms Gorman:
- Had no access to information about her clients (since this was password-protected by the salon).
- Was prevented from working for a competing salon during her contract and subject to a 12-month non-compete following termination.
- Had to seek permission to take holiday.
- Had 67% of her fees deducted by the salon for use of facilities.
On these facts, the tribunal held that the tests for employee status were easily made out.
This case is highly fact specific but further emphasises how important it is for businesses to ensure that they correctly identify the employment status of their staff.
It is the latest in a long line of cases where individuals have been deemed to be employees when the contracts state that they are not giving rise to significant liabilities on the part of the business.
If you are unsure as to whether your staff should be treated as employees or if you are looking to take on staff and need to understand their employment status, please contact a member of our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.