Determining employment status

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In Gorman v Terence Paul (Manchester) Ltd, Judge Batten found that an alleged consultant, who worked under a consultancy agreement, was actually an employee.

Ms Gorman worked at Terence Paul, a hairdressing salon, from 2013. She started out as an apprentice and later qualified. In 2014, she was given an ‘Independent Contract for Services’, which described her as a ‘self-employed hairstylist’. The contract stated that Ms Gorman was neither employed by Terence Paul nor wished to be.

Following the salon’s closure in 2019, Ms Gorman brought claims for sex discrimination, unfair dismissal, redundancy pay, holiday pay, and notice pay.

A preliminary hearing took place to determine whether Ms Gorman was an employee or worker of Terence Paul, rather than the independent contractor her contract made her out to be.

The Tribunal considered Ms Gorman’s contract in the context of other facts, including:

  • the salon strictly controlled Ms Gorman in the provision of her services;
  • the salon allocated clients to Ms Gorman, for whom she was obliged to perform services, and in turn the salon had to pay her for doing so;
  • although she was theoretically allowed to send a substitute, this was not possible in practice;
  • Ms Gorman needed the salon’s permission to take holiday; and
  • during the contract she couldn’t work for a competing salon and, after her contract terminated, she was required not to compete for 12 months.

Judge Batten’s decision is a useful reminder of the Employment Tribunal’s approach to determining employment status.