The claim was heard at the Employment Appeal Tribunal (EAT).
The tribunal concluded that she was not an employee and in any event, did not have the requisite period of continuous employment. Thus, there was no mutuality of obligation. The judge in the Employment HHJ McMullen QC. In the Employment Appeal Tribunal, the respondent was Stringfellow resteraunts and the appellant was Ms Nadine Quashie. The EAT considered it to be relevant that Nadine attended meetings every Thursday due to the fact that this alone was sufficient to create a continuing contractual obligation, thus meaning that there was an umbrella contract in place. The EAT concluded there were mutual obligations because Nadine had received a rota she must adhere to. Moreover, once she did turn up to work, it was Stringfellows which gave her this opportunity. Thus, HH Judge McMullen found the Tribunal at first instance incorrectly held there was no contract of service.
The judges in the Court of Appeal were Lord Justice Ward, Lord Justice Elias and Lord Justice Pitchford. The case was heard in the Court of Appeal on 21st December 2012. The solicitors and counsel were, Mr Thomas Linden QC for the Appellant, under the supervision of Messrs Davenport.
Mr John Hendy QC and Ms Catherine Rayner for the Respondent, under the supervision of Bindmans LLP. The appellant sought the restoration of the tribunal decision, in that there was no contract of service. The key issue was whether Stringfellow Resteraunts were under any obligation to pay Nadine Quashie. The appellant wanted the court to come to the conclusion that there was no obligation. It is important to decide whether someone qualifies as an employee or not because it determines whether or not they can claim unfair dismissal, as this right is reserved for employees only, not merely workers. The issue of whether or not there is a contract of employment frequently arises in a situation where a person works on a casual basis with their employer.
The Court of Appeal ultimately agreed with the Employment Tribunal`s analysis of mutuality of obligations, in that they were correct in stating that there was no employer-employee relationship present in the arrangement. It is not possible for someone to be classed as an employee if no mutuality of obligations exists. This was illustrated by the Employment Appeal Tribunal when they drew upon he case of Ready Mixed Concrete1. In this case it was concluded that there must be a mutuality of obligations between the employer and employee. One material fact of the case is that Stringfellows did not have to pay Nadine Quashie because she received her pay from customers.
The Court of Appeal felt it was crucial that Nadine discussed payment with her clients and took the economic risk she may not receive anything, thus Stringfellows had no obligation to pay her and it served to highlight that there was no contract of employment. Another material fact is that Nadine paid Stringfellows to dance there, which illustrates the aforementioned point further. Another material fact is that Stringfellows were under no obligation to provide Nadine with work. Thus, there was no obligation to pay her for any work done. Instead, Nadine was paid by customers and had to abide by a specific rule set as a result.
These rules enabled Stringfellows to maintain their license. One of the grounds of appeal were that there was a misreading of the Employment Appeal Tribunal, in that the used the concept of mutuality of obligation in two differing ways, thus arguing that the conclusion was incorrect. Another ground of appeal was that the Employment Appeal Tribunal are not entitled to interfere with the finding that the employer was not obliged to pay Nadine, meaning there can be no contract of employment. The final ground of appeal is that Stringfellows were not obliged to allow Nadine to dance there, thus there are no continuing obligations, which are a necessity for a contract of employment. According to the Employment Appeal Tribunal, Nadine could bring a claim of unfair dismissal, as the EAT held that the fact her earnings were from customers was irrelevant and that the appellant was obliged to pay the claimant.
The Court of Appeal decided in favour of the appellant due to the reasoning in the Employment Tribunal ultimately being accepted; in that there was no mutuality of obligations as there was no employer-employee relationship present. Thus, the appeal was upheld that there was no contract of employment. The case of Cheng Yuen v Royal Hong Kong Golf Club was useful because it served as an analogy to illustrate how it is possible to work on the premises of a club and adhere to all the regulations of a club, but have no contract of employment with that club, as there is no mutuality of obligations to work for one another.
The ratio decidendi of the case was that the club did not employ the dancers; rather she paid them to be provided with an opportunity to earn money by dancing for the clients. Furthermore, the EAT`s were not entitled to conclude that the payment arrangements of Stringfellows were merely a mechanism to discharge the payment of their employee. In addition, she took this economic risk, highlighting the lack of a contract of employment as it demonstrates her lack of obligation towards Stringfellows.
Lastly, the Nadine admitted to being self-employed and that she conducted her affairs on that basis. With regards to Daniel, using the decision of Stringfellow Restaurants Ltd v Nadine Quashie, it would appear as though there is no mutuality of obligations because Daniel provides his own alcohol and he is not paid by Ricardo`s Ristorante and Bar, instead he pays for a space at the bar. Furthermore, Daniel undertakes an economic risk as no facilities are provided and customers pay him directly and he does not receive sick pay or any benefits an employee would. Also, it is clear Daniel is also self-employed as sometimes rejects work in favour of higher paying venues.
Thus, there is no mutuality of obligations as neither party rely on another for anything. Therefore, a contract of employment cannot be in existence and thus Daniel will not be classed as an employee. Whereas, in the case of Isabelle, we can draw on the case of Ready Mixed Concrete (South East Limited) v Minister of Pensions and National Insurance to establish three requirements to a contract of employment. These are: “(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service”. Isabelle has a mutuality of obligations, in that she must attend all shifts on the rota and in return the company will ensure she works a minimum of 25 hours a week.
Furthermore, Isabelle receives the national minimum wage and both holiday and sick pay in return for her work. This satisfies the elements set out in the Ready Mixed Concrete case. Thus, there is an evident contract of employment and Isabelle would be classed as an employee.