Stringfellows' Lap Dancer Not an Employee

The Court of Appeal has overturned the decision of the Employment Appeal Tribunal (EAT) and ruled that a lap dancer at a London club owned by Peter Stringfellow was not an employee (Stringfellows Restaurants Ltd. v Quashie) and was not therefore entitled to bring a claim for unfair dismissal.

Nadine Quashie auditioned as a lap dancer and began working for Stringfellows in June 2007. She was subject to numerous rules and regulations and was required to work one Saturday and one Monday twice a month, as set out in a fixed rota, working one night a week at the Angels club. She was also required to attend a meeting every Thursday, and was fined if she did not do so. She was obliged to notify her employer of her holiday dates and to dance on the next day following her return. If she was away for four weeks she could be asked to undergo another audition. Dancers had to pay upfront each night a ‘tip out’ fee of £15 to the ‘House Mother’ before commencing their shift. Customers paid the dancers using ‘Heavenly Money’ vouchers, to avoid actual cash being exchanged. These were then handed in and the dancers were paid in cash, after deduction of a nightly house fee of £65 plus various commissions and any fines etc.

In December 2008, Ms Quashie was dismissed for misconduct for allegedly taking or, later, dealing drugs. At a pre-hearing review to determine whether Ms Quashie was an employee, the Employment Judge found that Ms Quashie was required to provide her work personally – she was not permitted to provide a substitute – and the level of control exercised by her employer was sufficient to pass the required test to establish a contract of employment. However, in the Judge’s view there was no mutuality of obligation, which is an essential element of a contract of employment, and she therefore concluded that Ms Quashie was self-employed. Ms Quashie appealed against this decision.

In the EAT’s view, the Employment Judge’s conclusion that mutuality of obligation was absent was ‘frankly wrong’. Stringfellows was obliged to give Ms Quashie the opportunity to earn money and to pay her for work done. She had to perform at the direction of the management of the club. The EAT found that Ms Quashie was an employee on each night she performed work and was paid for the work done. Mutual obligations existed on these nights and subsisted between the nightly periods of employment so that the arrangements enured into an employment relationship under an umbrella contract such that she had the necessary continuous employment to bring her claim of unfair dismissal.

Stringfellows appealed to the Court of Appeal and won. Whilst accepting that there had been ‘mutual obligations of some kind’ between Ms Quashie and the company when she was actually dancing, the Court ruled that those obligations fell short of establishing that a contract of employment existed. There was nothing inherently implausible in the company’s plea that it was not obliged to offer her work or to pay her anything.

Stringfellows argued successfully that, on the contrary, she had to pay the club a fee of £65 for the right to dance there, plus commission on her earnings from customers, plus fines for any breaches of club rules and that it was a frequent occurrence for her to make a loss on a night’s work. She was free to take as much or as little holiday as she liked; she was able to choose whether or not to work and she was also at liberty to work for a competitor.

In the view of Elias LJ, “… it would, I think, be an unusual case where a contract of service is found to exist when the worker takes the economic risk and is paid exclusively by third parties.”