In a decision released just before Christmas, the Court of Appeal has ruled that a dancer working at Stringfellows was not engaged under a contract of employment. This reverses the EAT’s judgment earlier this year, which had overturned the employment tribunal’s decision that she was not an employee.
The Court of Appeal said the employment tribunal was entitled to give considerable weight to the fact that the club where she danced had no obligation to pay her, even though there were other mutual obligations. For example the claimant had a contractual obligation to dance at the club on agreed nights, and in return the club had an obligation to allow her the opportunity to earn money from its customers. However, it said that it would unusual for a contract of employment to exist when the worker takes the economic risk and is paid exclusively by third parties.
Subject to any appeal to the Supreme Court, this decision restores a measure of orthodoxy to the case law which offers guidance to tribunals about determining employment status. The EAT’s decision, announced in April 2012, caused quite a stir because it was prepared to find an employment relationship within a contractual framework that was far removed from the conventional employment template.