The Employment Tribunal has handed down a judgment that could potentially have a significant impact upon the hair and beauty industry as a whole.
A “self employed” hairdresser who had worked in a salon for a period of six years was considered to be an employee by the Tribunal, meaning that she now has the right to claim for holiday, notice and redundancy pay.
Although the hairdresser had signed a contact which labelled her as self employed, it was thought that the level of control the salon had over her working time and practices was so significant that in reality she was actually an employee. In particular, the salon dictated the hours that the hairdresser worked, set the prices to be charged and products used, and also retained 67% of her earnings. The hairdresser also had to conform with the salons dress code and request time off in advance.
It has long been established in case law that a Tribunal has the ability to look past the labels applied by the parties and instead examine the true day to day reality of the relationship when assessing employment status. The greater degree of control the business has over the individual, the greater the risk that the individual will be deemed to actually be an employee. This has been seen in the recent gig economy decisions involving Uber and Pimlico Plumbers, which currently await appeal.
This case could have huge implications for the industry as it predominantly operates on a self-employed ‘chair rental’ basis. In reality many who believe they are self-employed could actually have accrued employment rights and be entitled to holidays, be protected from being unfairly dismissed or have family related leave/pay entitlements for example.
It is recommended that all working relationships are recorded in writing so that all parties know what is expected of them, however, these should be regularly reviewed in order to assess whether the document still accurately reflect the reality of the relationship.
If you are concerned about your employment status, or that of those who are engaged to work in your business, please contact a member of our employment team for assistance.