As if to justify the Government's recent decision to review worker and employee status, there has been another EAT case highlighting the difficulty of working out which side of the line a particular arrangement falls.

In MacAlinden t/a Charm Offensive v Lazarov five actors from a production at a church in Shoreditch were making claims against a one-man production company for the national minimum wage and holiday pay.  For this, they had to be "workers" – employed under a contract of employment or under any other contract whereby they undertake to perform work personally for another party who is not a client or customer of any profession or business undertaking carried on by them. 

After they were successful at auditions the claimants were given an "actors' contract" which included requirements to attend rehearsals and performances and stated that they would receive a "profit share" of 60% of the producer's profit split between the cast.  The play did not produce any profit; the producer's case was that it was actually quite plain to all concerned that it would not do so.  However, the employment judge found that the definition of "worker" was satisfied and they were therefore entitled to claim the minimum wage and holiday pay.    He based his decision on the fact that each claimant undertook to perform work personally and that there was a sufficient degree of mutual obligations for them to be workers.

The EAT sent the case back for re-hearing because the judge had not made any findings about the way in which the claimants carried on their work as actors.  As explained by the Supreme Court in Clyde & Co LLP v Bates van Winkelhof earlier this year, for the purposes of looking at "worker" status, there are essentially two kinds of self-employed: 

  • Those who are in business on their own account who contract with customers and clients – they are not workers.
  • Those who provide services as part of a business undertaking carried on by someone else – they are workers.

In this case, the self-employed actors would not be "workers" if they were in business on their own accounts (despite the fact that it would be unusual to describe a theatre production company as an actor's "client" or "customer").  The EAT explained that, even though some of the claimants were only just beginning their acting careers, they could still be seen as running a "profession" or "business undertaking" if they were actively marketing their services as an independent person to the world in general, picking up or attempting to pick up work where available from a variety of sources, and this could be a powerful indication that they were not "workers".