‘Self-employed’ hairdresser found to be an employee
The Employment Tribunal (ET) heard the case of Gorman v Terence Paul (Manchester) Ltd which concerned a hairdresser who was engaged by a company to conduct work on their premises. In her contract, it outlined that she was a self-employed, independent contractor, however, after working for the respondent for six years, the claimant argued that she had been denied a number of rights as she had been falsely labelled ‘self-employed’.
‘Employment status’ refers to the arrangement under which an individual is engaged to work for an employer. There are three main categories of employment status: employees, workers and self-employed people. Distinguishing between these three labels is important; whilst employees and workers are entitled to a number of employment rights, those considered self-employed are not. Employees are those who are hired directly by an employer. Workers are also hired by an employer but have more freedom in the work that they do and when they do it. The self-employed are those who conduct work for an employer but have full control over how they conduct it.
In this case, the tribunal first needed to consider if the claimant could be considered an employee, and not self-employed. The claimant’s main arguments rested on the degree of control the employer had over her. The employer rebutted by stating that all hairdressers engaged by them did have control over how they worked. In their words, hairdressers could decide what treatments they provided, as well as control when they took holidays.
The ET supported the claimant, finding that the degree of control exercised over her by the employer meant that she was, in truth, an employee. The judgement identifies the elements of the contract, a self-employed “Independent Contract for Services”, which, taken alone, are consistent with self-employment but then goes on to note the contradictory practical situation. The truth of matter was that she had to work fixed hours from Monday to Saturday, had no control over pricing, had to conform to their standards of dress, use their products exclusively and also needed their permission to take time off. Despite this, she was not paid any holiday pay and had to provide 67% of her takings to the employer.
The level of control was crucial in this case and employers should be clear about the relationship they are going to have with an individual before engaging them. Failure in this regard could lead to costly employment status claims. Importantly, the case is only at ET level so, in effect, not binding on this particular set of facts and it is yet to be seen whether the respondent will appeal the decision; although, it is unlikely that, given the facts, any higher court will rule that the claimant is indeed self-employed.
Either way, this case will still have real resonance with the beauty industry who have similar circumstances, so employers must be careful and familiarise themselves with what constitutes the different types of employment status.