An employment tribunal has found that a hairdresser who worked under a consultancy agreement with a salon for five years was an employee.
Ms Gorman started at Terence Paul salon in Manchester in 2013 as an apprentice. Following her qualification in 2014, the salon provided her with an “Independent Contract for Services” in which it agreed to engage her as a “self-employed hairstylist”, which confirmed that Ms Gorman was not, and did not wish to be, an employee of the salon.
However, the salon closed in 2019. Subsequently, she issued a claim for unfair dismissal, sex discrimination, notice pay, holiday pay and redundancy pay. Since the salon disputed that Ms Gorman was an employee or worker, a preliminary hearing took place to determine this issue.
Ms Gorman was 19 years old when she started working for the salon and she didn’t understand and was not able to negotiate the terms of the contract. It also found that the contract did not reflect the reality of her working arrangements. She 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 providing those services. 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. Including but not limited to, Ms Gorman:
- had no access to information about her clients (as this was password-protected by the salon).
- was prevented from working for a competing salon during her contract and subject to a 12-month non-compete following termination.
- had to seek permission to take holiday.
- had 67% of her fees deducted by the salon for use of facilities.
Based on these facts, the tribunal held that the tests for employee status were easily identified.
This is a further reminder of the approach a tribunal will take when establishing employment status, and that the underlying contract must be considered in the context of all the other facts.