1. The claim was first heard in the Employment Tribunal.
2. The court of first instance decided that she was not an employee and she did not have the requisite period of continuous employment, that the claimant had no relevant mutuality of obligation present.
3. HH McMullen QC (sitting alone)
4. Nadine Quashie – Appellant and Stringfellow Restaurant –Respondent ,
5. The EAT considered that it be relevant that Nadine Quashie attend meeting Thursday’s because of risk of fine is she failed to do so, it clearly indicates an umbrella contract in existence. It concluded that there was a continuing obligations in existence in the gaps where there was no rota in place.
6. The EAT decided that Isabella was an employee and she had the necessary continuity of employment it concluded that there were mutual obligations in that she had to turn up for work according to the rota she had been given, and when she did the employer had to give her the chance to work. HH Judge McMullen QC found that the Tribunal made an error when they held that there was no contract of service existed.
7. LJ Elias , LJ Pitchford and LJ Ward
8. 21 December 2012
9. Mr Thomas Linden QC / Messrs Davenport Lyons (Solicitors) for Appellant.
Mr John Hendy QC and Ms Catherine Rayner / Bindmans LLP (Solicitors) Respondent.
10. Appellant was seeking to restore the decision of Employment Tribunal in the Court of Appeal and to prove there was no contract of employment.
11. It’s important to distinguish the forms of working relationship because some rights including the rights to claim unfair dismissal are conferred on employees whereas others upon workers as all employees are workers but not all workers are employees.
12. This will likely to arise in situations where an individual works for an employer either on a casual basis or ad hoc, it’s important to distinguish that there is a continuation of a contract and if any gaps in between the period of employment.
13. The Court of Appeal did agree with the Employment Tribunal’s analysis regarding mutual of obligations and that it was entitled to decide that there wasn’t a relationship of employee and employer. The EAT were in fact using the concept of mutuality of obligation in two divergent ways as the concept was used in such a way that The Tribunal was concentrating on the nature of the obligations and concluded that there wasn’t mutual obligations of a sort which fixed the contract into the employment capacity.
14. Yes someone can be classed as an employee even if there is no mutuality of obligation because there is no reason why a worker should not be employed under a contract of employment even if of short duration referencing from Court of Appeal decision in Meechan v Secretary of State of Employment 1997IRIL 353.The employee need to prove continuity even when periods of no contract, there ought to be at least an ” irreducible minimum of obligation” either express or implied which continue during the breaks in work arrangements. Further from the Ready Mixed Concrete case, one of these elements was a requirement in there being a mutuality of obligation between the employee and the employer.
15. The material facts of the Court of Appeal are the facts that have a direct influence on the decision being made by the courts.
i) Stringfellow did not have to pay Nadine but was paid in Heavenly Money by customers and the Tribunal’s conclusion from the evidence that the employer was not under any obligation to pay the dancer. The key evidence for that was that she discussed her own fees with the clients, took the risk that on any night she would potentially earn nothing and receive back from the employer only money received from clients after deductions.
ii) Nadine Quashie paid Stringfellow to dance at their venues, the Court of Appeal held that the key findings of the Tribunal were that Nadine was never paid, in fact she paid the club to be able to dance at their venues. She would often go to work and not earn anything because she would not have earned enough Heavenly Money vouchers.
iii) Stringfellow had no obligation to provide Ms Nadine with work and was not obliged to provide work or pay her for any work done. While she worked on a rota the club would provide her a facility for dancing and her earnings came from the customers. In return she had to comply with specific rules required to enable Stringfellow to maintain their licences.
16. The grounds of appeal in the Court of Appeal were that the EAT wrongly concluded the
Employment Tribunal findings based on mutuality of obligation, firstly considering whether there was a contract in place during periods of not working on the rota. Secondly the EAT was not entitled to interfere that the employer was not obliged to pay any remuneration to the claimant which is entirely inconsistent with the evidence before the Tribunal.
Finally the Tribunal was entitled to find there was no duty on the appellant to provide opportunity to dance during here presents and no continuity obligation can be established an umbrella contract in existence between rotas.
17. Nadine Quashie could bring a claim for unfair dismissal according to the Employment Appeal Tribunal because it found that there some mutual obligation between employer and employee as such the employer was obliged to provide work. Further there were obligations to pay wage regardless of source and last but not least the employer failed to properly analyse the relationship during the periods of gaps in rota as there were continuing of employment and there was an umbrella contract owing to risk of fines is she didn’t attend meeting on Thursdays, the EAT held that section 212 of the Employments Rights Act could bridge the gaps of periods when there was no contract.
18. The Court of Appeal found for the Appellant for the reasons that they believed the ET was fully entitled to conclude that there was no relationship of employee and employ. The reasoning of the Tribunal in respect to mutuality of obligations was accepted, albeit not entirely. Subsequently the appeal was uphold, and that the Tribunal’s decision that there was no contract of employment was restored.
19. The case of Cheng Yuen v Royal Hong Kong Golf Club was useful because it identified that the Employment Tribunal saw an analogy that could be a very justifiable one when the Court of Appeal examined it. The analogy that stems from that case can be applied in the current case. The club did not actually employ the dancers to dance; the claimant paid them to be given an opportunity to earn some money by dancing for the clients.
20. Ratio decidendi means the reason behind the decision and be defined as the point in a case which concludes the judgment, looking at the claimant, she did not receive a formal copy of the contract of employment but was bound by the terms as there is a club agreement which the Employment Tribunal stated the claimant did not receive. Nevertheless, she did receive a handbook about Cabaret of Angel which contained much of the same information as the house rules and the contract was performed in regards to those terms, regardless whether she had not received the formal document.
If an individual takes on the economic risk and is paid by a third party, they are unlikely to be classed as working under a contract of service and the fact that the dancer took the economic risk establishes an important fact against the contract being a contract of employment.
Nadine Quashie was responsible for paying her own tax and national insurance this decision by the Employment Tribunal on the economic risk was backed up by the fact that the terms of the contract consisted of the dancer accepting that she was indeed self-employed, thus conducted her own affairs did not receive holiday or sick pay. The Tribunal was entitled to decide that there was no relationship of employee and employer established by this arrangement.
The Employment Tribunal should not interfere with finding of fact unless the findings were ones which no tribunal would make, the Court of Appeal reinstated the finding of the Tribunal in regards to the claimant not being employed under a contract of employment. An appellate tribunal is only permitted to interfere with the verdict of that tribunal, on the basis that it is satisfied that in its opinion no reasonable tribunal, correctly guiding itself on the relevant question of law, could have reached the decision under appeal.
Based on Isabelle employment status and taking into consideration the case of Ready Mix Concrete v Minister of Pensions and National Insurance 1968 1 QB 497 as the fact of this case points to the multi-factorial test reflected in the judgement of McKenna J which analysed various different features of the relationship.
The test adapted and applicable to Isabella for an employer and employee relationship to exist McKenna J summarised the essential elements of a contract of employment, this three elements of service should be fulfilled.
The servant (Isabella) agree that in consideration of wages or other remuneration, she will provide her own work and skills in the performance of some service to the employer (Ricardo’s Restaurant) and a contract imposing obligation on Isabella to provide work personally.
Isabella agrees expressly or impliedly, that in performance of that service she will be subject to Ricardo Restaurant’s control in a sufficient degree to make the employer master. Furthermore there should be mutuality of obligation or some legal obligation which is a continuing overriding arrangements between employer and employee.
Last but not least some form of control over the employee by the employer and being a contract of service whereby distinguishing these provisions are either contract of sale from one of labour
When applying this test the courts or tribunal should examine and assess all the relevant factors which makes up an employment contract in order to determine the nature of Isabella’s contract.
This approach establishes that the issue is not merely about control, and that the sheer nature of the contractual provisions could lack consistency with the contract being a contract of services. The test adapted the court is required to examine all the key elements which create the employment relationship in order to conclude the nature of the contract. It is known that Isabelle receives the national minimum wage, but makes most of her money from tips she receives from customers, which the restaurant does not require her to give to them. Even though she receives substantial payment from the tips left by the customers, this would not necessarily mean she is not in a contract of employment as Cozens-Hardy MR from the case of Penn v Spiers and Pond Ltd.
According to the facts it is clear Isabelle she accepted control by the employer. This is supported by the fact she is contractually bound to follow a specific rota of her shifts every week, and it is also compulsory for her to attend a staff meeting every Thursday. Moreover, a senior waitress supervises her when they are working, emphasising the fact there is some form of control consistency of a contract of service. There does seem to be a mutuality of obligation between the employee and employer. Isabelle is contractually bound to work the given shifts and the employer is under a legal obligation to provide at least 25 hours of work per week. Subsequently this would mean that Isabelle would have to notify her employer and obtain permission if she were to leave on a holiday and receive her holiday pay, which she is entitled. Based on this test Isabella can be classed as an employee.
Daniel situation would be similar to the Employment Tribunal decision on Stringfellow v Nadine Quashie case as he does not have the requisite period of continuous employment as defined by section 230 of Employment Rights Act 1996.
In my finding I refer back to the Employment Tribunal facts that there were no mutuality of obligation between Daniel and Ricardo Restaurant Bar as no was no wage/work bargain is present rather Daniel had to pay the Ricardo Restaurant £50 for space.
Daniel could turn down work and work at different establishments making him and independent contractor paid by clients which makes Daniel being self-employed.
There is no mutuality of obligation between Daniel and Ricardo. Ricardo is under no obligation to supply work to Daniel, there also seems to be no degree of control by Ricardo must be some form of control over the employee by the employer. Daniel provides his own alcohol to make cocktails to sell to customers, and does not follow any specific rota. The fact that he is paid directly by customers for the alcohol he does not alter the fact that Daniel not making enough sales in one night, taking such an economic risk is also a significant factor against him being an employee. It would be an abnormal case where a contract of service is found to exist when the worker is aware of the economic risk they take and is paid wholly by third parties.
In summary, Daniel was not paid by Ricardo but was paid by the customer, and according to the facts did not receive any holiday or sick pay, as well as any benefits. All these factors are consistent with the Daniel not being employed for a contract of service.