The club controlled the rota, the conduct, the appearance and the prices. On a control-centred analysis the dancer was plainly an employee. She was not, because the club never paid her, she paid the club, and on a quiet night she went home having lost money.
On this page
Full name: Stringfellow Restaurants Ltd v Quashie
Citation: [2012] EWCA Civ 1735; [2013] IRLR 99
Court: Court of Appeal (Elias LJ giving the judgment, with Ward LJ and Pitchford LJ)
Judgment: 21 December 2012
Subject: Employment status; who bears the economic risk; wage obligation
Result: The club’s appeal allowed. The dancer was not an employee.
Note on the name: frequently cited as Quashie v Stringfellows, but the club was the appellant in the Court of Appeal.
Why This Case Matters
Employment status disputes usually turn on control and mutuality. Quashie is the leading authority on a third question that decides a surprising number of cases: who bears the economic risk, and does the engager pay the worker at all?
The fact pattern (a worker engaged at a venue, paid by customers rather than by the business, taking the risk of a bad night) recurs across hospitality, beauty, fitness, hairdressing, taxi and delivery work, and in a great many HMRC status enquiries into salons, gyms, clubs and restaurants.
The Facts
Nadine Quashie worked intermittently over about 18 months as a lap dancer at Stringfellows and Angels, two London clubs operated by the same company.
The arrangements were unusual and are worth setting out precisely, because the reasoning depends on them:
- She paid a fee to the club for the right to work there on a given night.
- She was paid by patrons, not by the club, at prices the club set for various dance packages.
- Payment was made in vouchers (“heavenly money”) which patrons bought from the club.
- At the end of a shift she exchanged the vouchers with the club for cash, subject to deductions for the facilities and other charges.
- The club’s handbook described her as an independent contractor.
- On a quiet night she could end up out of pocket.
- There was a rota, and she was subject to a substantial degree of control while at the club as to conduct, appearance and the manner of performance.
She was told in December 2008 that she would no longer be permitted to work at the clubs, following allegations relating to drugs. She brought an unfair dismissal claim, which required her to establish that she was an employee.
Procedural History
- Employment Tribunal: held she was not an employee.
- Employment Appeal Tribunal: allowed her appeal, holding that she was.
- Court of Appeal: restored the Employment Tribunal’s decision. Not an employee.
The Ratio Decidendi
Control was present and was not enough
This is the point that makes the case so useful. The club exercised real control, over the rota, over conduct, over appearance, over the manner and pricing of performances. On a control-centred analysis Ms Quashie would have succeeded.
Elias LJ held that control is necessary but not sufficient. The obligation to pay a wage is a fundamental element of the employment relationship, and an arrangement in which the engager pays nothing and the worker takes the risk points decisively the other way.
The relationship with mutuality
The reasoning also bears on mutuality of obligation. Since PGMOL it is much harder to argue that a right to cancel defeats mutuality during a subsisting engagement. Quashie attacks from a different angle: the question is not whether obligations exist, but whether they include the obligation to pay that characterises employment.
Obiter and Qualifications
- The label in the handbook. The description of the dancers as independent contractors was a relevant factor but not determinative. Where other indicators are finely balanced, the parties’ own characterisation can tip it; it cannot override the substance.
- Observations on the umbrella contract. The Court’s remarks about whether any overarching contract subsisted between engagements are secondary to the reasoning on the individual nights.
- Not a licence to structure round employment. The case turns on genuine economic risk. An arrangement engineered to look as though the worker bears risk, where in reality the engager guarantees the income, will not attract the same analysis, and after Atholl House and PGMOL the whole picture is what counts.
- Employment law, not tax. The case concerns the unfair dismissal jurisdiction. The tests overlap substantially with the tax analysis, but tax status has its own statutory overlay in the off-payroll and salaried members regimes.
Practitioner Application
Where the argument works
- Chair rental and space rental models: hairdressing, beauty, tattooing, fitness. The worker pays for the space, is paid by clients, and takes the risk of a quiet week.
- Commission-only arrangements where the engager pays nothing absent sales.
- Venue-based performers and service providers paid by customers.
- Any arrangement in which the worker can end a shift out of pocket. That single fact is worth more than a page of submissions about control.
Evidencing it
- Show the money flow. Who pays the worker, out of whose funds, and on what terms. Bank records, till records and voucher or booking systems.
- Show the downside. Actual examples of shifts or weeks where the worker made a loss or earned nothing are the most persuasive evidence available.
- Show the fee. Rent, chair fee, house fee or commission deducted for the facilities.
- Do not rely on the label. A contract describing the worker as self-employed helps only at the margin.
- Expect the control point and answer it directly: control was present in Quashie too, and it did not decide the case.
Frequently Asked Questions
Why was the dancer not an employee despite the control?
Because the club did not pay her. She was paid by patrons, she paid the club a fee to work there, and on a quiet night she could go home out of pocket. Elias LJ held that control is necessary but not sufficient: the obligation to pay a wage is a fundamental element of employment, and an arrangement where the engager pays nothing and the worker bears the risk points decisively the other way.
Where does this argument work in practice?
Chair and space rental models in hairdressing, beauty and fitness; commission-only arrangements; venue-based performers and service providers paid by customers. The common feature is that the worker pays for the opportunity, is paid by third parties, and can end a shift out of pocket. That single fact is worth more than a page of submissions about control.
Does the contract calling someone self-employed help?
Only at the margin. The handbook in Quashie described the dancers as independent contractors and that was a relevant factor, but it was not determinative. Where the other indicators are finely balanced the parties’ own characterisation can tip the analysis; it cannot override the substance of the arrangement.
How does this fit with PGMOL?
They attack from different angles. After PGMOL it is much harder to argue that a right to cancel defeats mutuality during a subsisting engagement. Quashie asks a different question: not whether obligations exist, but whether they include the obligation to pay that characterises employment. Where the engager pays nothing, that is a separate and often stronger point.
Does Quashie answer an off-payroll or salaried members enquiry?
No. Those are statutory overlays with their own tests, the hypothetical contract analysis for off-payroll working, and Conditions A to C for salaried members under BlueCrest. A Quashie analysis is directed at the general common law status question and is most useful in a straightforward PAYE status enquiry into a venue or salon workforce.