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Actors put Employment Status in the Spotlight

Employment status plays a central role in employment law as it determines the rights and protections available to individuals and can often have implications in relation to, for example, tax liability.

In the last three years alone, the Court of Appeal and the Supreme Court have decided on the employment status of volunteers, lap dancers as well as Methodist Preachers.

Given the complexities in this area of law, the Government’s recent decision to review worker and employee status is welcome in many quarters. According to the Department for Business, Innovation and Skills (BIS) many individuals are currently unaware of their employment status and so consequently their employment rights.

Many people could be ‘workers’ with employment contracts but consequently have fewer rights of legal recourse (such as unfair dismissal or maternity pay) than the vast majority of people who are ‘employees’, which is the most protected category. Those purportedly working under a ‘self-employed’ contract have virtually no employment rights relative to their worker and employee counterparts. Likewise and often surprisingly many employers are also unsure of the status of their workforce.

This confusion was most recently highlighted by the Employment Appeals Tribunal (EAT) on the facts in MacAlinden v Lazarov and others. The question put forward was were the concerned jobbing actors working under a straight profit share agreementor were they workers for the purposes of employment legislation?

All five actors recruited by the Respondent agreed to be paid by way of a profit share from the proceeds of a play they were to perform. Unfortunately the play did not turn a profit despite receiving a glowing critical response; as a result the actors received no payment beyond their critical plaudits.

However, the actors brought forward National Minimum Wage and holiday pay claims to the initial Employment Tribunal (ET). They were successful in their claims and it was held that since the actorsundertook to perform the work personally, there was a sufficient degree of mutual obligation which in effect established that they were workers and so capable of making such claims.

However on appeal, the EAT held that the ET failed to apply the correct legal test as it had not properly considered whether the actors were carrying out a profession or a business undertaking, to the extent that the other party to the contract was a client or a customer; this being an exception to the definition of a worker that if true would mean they should not be considered as such.

The witness evidence indicated that to some extent the actors were in essence embarking on a professional business undertaking. They seemed to have been actively marketing their services as an independent person to the world at large, rather than being recruited to work for another and in so doing become an integral part of that operation. Thus, the EAT has sent the case back to a fresh Tribunal for re-consideration. We will of course be following this one with great interest and report on the re-considered decision of the ET once available.

Conclusion

In sum, the concept of a worker in employment law is nothing new, however it is something that employers should bear in mind, as if the status of the people in their organisation is not correctly defined and understood then they could be leaving themselves open to costly litigation.

Therefore it is always a good idea for employers to ensure that they have in place robust contracts which make the relationship clear. In addition periodical reviews of such documents should be undertaken, as arrangements between parties can often change organically without being properly reflected in the relevant agreement.

As always if I can provide you with any further assistance in relation to an employment status query or any other issues, so please do not hesitate to contact me for a free consultation on 0113 350 4030 orsamira.cakali@scesolicitors.co.uk.


Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here. 

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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