Meghan Gorman from Lancashire worked as a hairdresser for 6 years for Terence Paul, a Manchester City Centre salon that closed in 2019.
During her employment, Meghan was under a contract that deemed her self-employed and not employed by the salon. This meant that the salon were not bound by the rights and obligations conferred by Employment legislation such as providing Meghan with paid holiday leave.
However, the Employment Tribunal has ruled in Meghan's favour that she was indeed an employee of the business and not self-employed. This is on the basis of the actual relationship between the salon and Meghan whereby the salon kept 67% of Meghan's takings from her work and dictated her hours of work.
There is little doubt that this is a landmark ruling and will certainly make a difference to many individuals working within the hair and beauty industry who may well be on similar contracts. This will now allow Meghan to pursue further claims against the salon which she would not have been able to do if she was not a worker under the legislation.
What makes someone an employee and not self-employed?
There is no set formula, as such, to determine whether a person is self-employed or a worker / employee. Sometimes, even the contract between the parties will state that the individual is self-employed. However, that is not enough to demonstrate that the person is actually self-employed.
In reality, there are a number of things to look at and they all boil down to the power balance in the relationship between the business and the individual:
Who determines the working hours?
Can the individual take time off as and when they please?
How is the pay determined?
Is the individual expected to adhere to the employment policies that the business has in place?
The Employment Tribunals have been made to determine these questions in the past and we have no doubt that they will continue to arise. However, again, Meghan's case is certainly an important one and sheds some more light on whether a person is self-employed or employed.
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This is not legal advice; it is intended to provide information of general interest about current legal issues.