Quashie v Stringfellow Restaurants Ltd

The Court of Appeal allowed the appellant's appeal and restored the Employment Tribunal's finding that the claimant was not an employee for the purposes of section 230 of the Employment Rights Act 1996. The court applied the multi-factor approach to employment status (drawing on Ready Mixed Concrete) and emphasised the importance of mutuality of obligation and the wage/work bargain. The Tribunal's primary factual finding that the dancers bore the economic risk, negotiated and received payments from customers (through a voucher system) and that the club had no enforceable obligation to pay the dancer was held to be a permissible inference. The Employment Appeal Tribunal erred in substituting its own view of the evidence and in treating the club's role in collecting and filtering payments as establishing an obligation to pay wages.

Background and procedural history:

• The claimant worked intermittently as a lap (table-side) dancer at the appellant's clubs and brought a claim for unfair dismissal after being told she could no longer work there.
• The Employment Tribunal found she was not an employee and lacked the qualifying period. The Employment Appeal Tribunal allowed her appeal, finding she was an employee and that continuity was established; the club appealed to the Court of Appeal.

Nature of the claim: An unfair dismissal claim founded on the proposition that the claimant was an employee within the meaning of s.230 of the Employment Rights Act 1996 and had the requisite one year's continuous employment.

Issues framed by the court:

• Whether the claimant was an "employee" under section 230 (i.e. whether there was a contract of employment/contract of service).
• If an employee, whether she had the necessary continuity of employment (including whether an overarching or "umbrella" contract existed between engagements).

Court's reasoning and conclusion:

1. The court reiterated the established multi-factor approach to employment status (control, integration/economic reality, and the Ready Mixed Concrete tripartite test) and the limited role of appellate review where fact-finding and mixed fact-law determinations are involved.
2. The pivotal factual finding at first instance was that the appellant was under no contractual obligation to pay the dancer: her receipts came from customers via "Heavenly Money" vouchers and the dancer bore the risk of being out of pocket after a shift. That finding was a permissible and non-perverse inference from the evidence and the contractual terms which treated the dancer as an independent contractor.
3. The Court of Appeal held that this absence of an obligation to pay, together with the economic risk borne by the dancer, strongly pointed against a contract of employment despite features of control and integration; analogies such as a golf caddie were instructive. The court concluded the EAT was not entitled to overturn the Employment Tribunal's findings.
4. The appeal was allowed and the Tribunal's decision that there was no contract of employment (and therefore no jurisdiction to hear unfair dismissal) was restored. The court did not need to decide continuity matters once status was resolved.

Appeal allowed: the Court restored the Employment Tribunal's finding that the claimant was not an employee under section 230, because the Tribunal permissibly inferred there was no contractual obligation on the club to pay wages (the dancer received payments from customers, bore economic risk and was treated as self-employed); the EAT erred in substituting its own evaluation of the evidence on mutuality and payment.

Appeal from the Employment Appeal Tribunal (UKEAT/0289/11/RN, HHJ McMullen QC sitting alone) which had allowed the claimant's appeal against the Employment Tribunal. The Court of Appeal ([2012] EWCA Civ 1735) allowed the employer's appeal and restored the Employment Tribunal's decision.