Nadine Quashie

There’s no question about it: take a good looking woman, preferably without her clothes, have her dancing (naked, of course), throw in some large sums of money, add a celebrity and a good soundbite from a lawyer and, hey presto, you have a story to fill the paper.  In fact, you have this story.

The case is being fought as a preliminary hearing to decide whether Ms Quashie is an employee or not.  If she is self-employed, as Stringfellows allege, then there is no jurisdiction for the ET to hear her unfair dismissal claim and she will probably have no other remedy apart from a claim for any notice monies she may be owed.  On the other hand, if she is held to be an employee then the case will go to a final hearing to decide whether she was unfairly dismissed, unless it settles in the meantime.

You might think that the issue of whether a person is an employee or not is simple, but it often isn’t.  There is no one litmus test to distinguish between an employee, a worker, or a self-employed individual.  How the person paid their tax is often a very important factor in determining their status, but it isn’t the only one.  That’s why Stringfellows barrister, Caspar Glyn of Cloisters Chambers, memorably stated “she was a complete stranger to the taxman”: not just no  PAYE there then.

Paying tax on a self-employed basis is often a very persuasive factor in pointing to a lack of an employment relationship, but it’s not the overriding consideration. Employers do sometimes set employees up as self-employed and draw up a contract of employment which states that it isn’t, and it is hard for the employee to do anything about that at least initially.  Not that many employees in the whole scheme of things seek legal advice before they join their “employer”.

One of my favourite case quotations on this subject is this one from the case of Levy McCallum Ltd v Middleton EAT [2005]

If parties agree to create a horse but instead create a camel, the fact that they intended to create a horse and even call what they have created a horse is of little assistance in determining whether it is in fact a horse

It’s almost up there with Donald Rumsfeld’s “known knowns”. You can see how you might get confused, can’t you?

One very important factor is the “mutuality of obligation” test: was the employer required to supply work and was the employee obliged to turn up and do it?  If yes to both then it is suggestive of an employment relationship. Contrast that with a plumber whom you ask to come and fix your tap: it’s a one-off job and you’re merely engaging his services for that work.  Also, the plumber can delegate his duties to someone else – e.g. his mate.  An employee can’t do that.

Ms Quashie is probably relying on another test – that of direction.  She was working at the direction of the club and that is often evidence of an employment relationship.  They told her when to dance, and supplied the customers. She alleges she had to work – dance – for free, although the club denies this.

The result will be interesting.  My money’s on the horse.

If you’re in doubt about the terms of your employment,  contact me at michaelscutt@dalelangley.co.uk for a no obligation no fee discussion.

No related posts.

What Makes a Good Employment Law Story? originally appeared on Jobsworth by Michael Scutt on 29/10/2010.

I said 'TUPE, not toupee'

This can be a real headache for employers where they have “inherited” employees following a transfer of an undertaking under the TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006.  It is quite well known that if TUPE applies to a transfer then if the Transferor (let’s call it NewCo for ease if not originality) dismisses an employee from the transferee (OldCo) for a reason connected with the transfer, the dismissal will be automatically unfair, unless NewCo can show that an “economic, technical or organisational” reason applied entailing changes in the workforce.  TUPE has the effect of transferring all employment contracts and rights from OldCo to NewCo.

However, what is the situation where the TUPE transfer occurred some time ago and NewCo now wants to ensure that the employees from OldCo are on the same pay deal, the same holidays, sick pay arrangements etc?  This presents a problem for NewCo because Regulation 4(4) of TUPE provides that any variation to a term of a contract covered by TUPE will be

“void if the sole or principal reason for the variation is (a) the transfer itself; or (b) a reason connected with the transfer that is not an economic, technical or organisational (ETO) reason entailing changes in the workforce”

So, if the proposed variation is because of the transfer of the undertaking or is linked to the transfer but is not an ETO reason, the variation will not be legally valid, even if the affected employees agree to the change.  On the other hand if the proposed variation is because of the transfer but is an ETO reason then it can take place.  An ETO reason usually, but not always, entails reductions in the workforce but whether the proposed variation will be an ETO reason will usually be a matter for close factual analysis. 

 When employees seek legal advice on this issue it is usually the case that the proposed variation would adversely affect the employees, but it doesn’t have to be the case.  In 2007 the Court of Appeal confirmed that any changes that were beneficial to the affected employees would be binding.

Many people think that if much time has passed since the transfer of the undertaking (OldCo to NewCo) that is sufficient defence, but mere passage of time is not the whole answer.  The real issue is “what is the reason for the proposed variation?”  The fact that many months, or even years has passed, since the transfer is not going to be conclusive on its own. A case involving Dale Langley (my partner’s) previous firm, Langley & Co, called Taylor v Connex South Eastern EAT/1243/99 [2000] held that a lapse of two years was insufficient.  As ever though, as in all cases, they all turn on their own facts: this is a difficult area and legal advice should be taken (especially by employers) before proposing a variation that might fall foul of TUPE.   Even if TUPE is not engaged, an employer that tries to implement a unilateral change in an employee’s terms and conditions e.g. by reducing employee’s pay may find itself facing a claim for constructive dismissal and/or unfair dismissal.  Employers should proceed with care…

If I can assist please do not hesitate to contact me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk.  Nothing contained in this post or anywhere else on this blog constitutes or is intended to constitute legal advice or creates a solicitor-client relationship between me and you the reader.

Related posts:

1. TUPE
2. TUPE vs Blancmange: Compare and Contrast
3. Solicitors get it wrong too

Harmonising contracts under TUPE originally appeared on Jobsworth by Michael Scutt on 18/11/2009.

In a bit of a departure from normal practice here I am uploading a copy of a presentation I gave at the City Business Library today. It may be a bit cryptic if you weren’t there to hear it and please contact me if you require further assistance or explanation.  You can find it at my Slideshare site, which is here;

http://www.slideshare.net/michaelscutt/contracts-of-employment-201009f

Related posts:

1. Contracts of Employment: what you need to know
2. Harmonising contracts under TUPE
3. What Makes a Good Employment Law Story?

Contracts of Employment – what you need to know originally appeared on Jobsworth by Michael Scutt on 20/10/2009.

I  spent a good part of yesterday evening preparing a seminar that I have been asked to give at the City Business Library on 20th October next.  The topic handed to me is the title to this post: “Contracts of Employment: what you need to know”, to cover one hour.  The seminar is aimed at new businesses looking to take on staff for the first time.  At first glance I thought it would be an easy topic, one I am very familiar with, nothing too controversial and plenty of time for discussion afterwards.  Then, on my way in to work this morning, tapping out a skeleton presentation in Powerpoint on the trusty laptop, I realised just what I have let myself in for. 

The topic is huge.  You could spend an hour discussing what actually constitutes an employee before you even get on to discussing the information that has to be given to a new employee under s.1 of the Employment Rights Act 1996 (click here to view the BAILLI database for the full test of s.1). If you follow that link  you will see that s.1 requires the employer to write to the employee setting out the main terms of the employment, the name of the employer (not as silly as it might seem at first glance), the date the employment began and any periods of continuous employment to be taken into account, job title, place of work, the amount and rate of pay and many other important “housekeeping” issues.  The s.1 statement must be given within two months of the employee starting work, failing which the employee could complain to an Employment Tribunal for a declaration of the applicable terms of employment.  In other words, the ET would decide what the terms and conditions of employment will be (or were if the employee has since left); a potential double-edged sword which is why not many complaints under s.1 ERA get made to ETs.

In many cases a business will describe someone as “self-employed” when, in reality, they are an employee, in an attempt to avoid the individual acquiring the right to sue for unfair dismissal. The taxation treatment of the individual isn’t enough.  In other words, if someone is not on PAYE that doesn’t mean they are self-employed.  There are many different tests used by ETs to determine whether a person is an employee or not – none of them overridingly conclusive.  Each situation is looked at on its own facts and an ET won’t be blinded by whatever label the person has been given. 

The factors that are particularly important though concern whether there is a need for the individual to provide the services themself, or are they required to find a substitute to perform when they are sick/on holiday.  If yes, then that tends to be suggestive of an independent contractor relationship rather than an employee.  Also is there mutuality of obligation?  Is the business obliged to provide work to the individual?  If no then it is not suggestive of an employee relationship.

A massive topic and I haven’t even got onto disciplinary procedures, notice periods, PILON clauses, restrictive covenants and how to avoid being sued plus a hundred and one other considerations. At least there is scope for further seminars.  More updates to follow in due course.

Of course, if you want any advice on any of these issues please do not hesitate to contact me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

Related posts:

1. Contracts of Employment – what you need to know
2. Harmonising contracts under TUPE

Contracts of Employment: what you need to know originally appeared on Jobsworth by Michael Scutt on 12/08/2009.