"Consultant" deemed to be employee
In a case that highlights the dangers of employers entering into consultancy agreements believing that this protects them from employee-related claims, an employment tribunal has found that a hairdresser who worked under a consultancy agreement with a salon for five years was an employee and not a consultant.
The claimant in this case started work as an apprentice in 2013. Following her qualification in 2014, the salon provided her with an agreement headed "Independent Contract for Services". In this agreement she was engaged as a "self-employed hairstylist" and it stated that the claimant was not, and did not wish to be, an employee.
The claimant issued a claim for unfair dismissal, sex discrimination, notice pay, holiday pay and redundancy pay when the salon closed.
The tribunal considered a number of relevant facts that led it to come its decision, including the following:
The claimant was 19 when she started work for the salon and did not understand and was unable to negotiate the terms of the contract.
The contract did not reflect the reality of her working arrangements.
The claimant was subject to strict control by the salon when providing her services.
There was mutuality of obligation, since her clients were allocated to her by the salon, she was obliged to perform services for them, and the salon was obliged to pay her for doing so.
Although the contract theoretically allowed her to send a substitute if she could not attend work, in practice this was not possible. If she was unable to work, her clients were covered by other stylists at the salon.
The claimant did not have access to information about her clients.
She was subject to restrictive covenants that prevented her from working for a competing salon during her contract and she was subject to a 12-month non-compete following termination of her contract.
She requirement permission to take a holiday.
67% of her fees were deducted by the salon for the use of its facilities.
Although a very fact-specific decision, it is a reminder that merely calling a worker “self-employed”, or a “contractor” or a “consultant” will not be sufficient to prevent a finding that they are in fact an employee if their duties and obligations are consistent with those of an employee.