Chair-Renting Hairdresser Remained an Employee – Guideline ET Ruling

Many hairdressers rent chairs from salons, paying a percentage of their takings to salon owners. However, as an Employment Tribunal (ET) ruling made plain, their apparent self-employed status is in many cases illusory.

The case concerned a stylist who was employed at a salon for a decade before she purportedly made the transition to self-employed status. She was eager to be paid on a self-employed basis, actively pursuing the change in the belief that she would be better off by £600 a month. She thereafter worked on a chair-rental basis, a commonplace arrangement in the hairdressing industry.

Following her departure from the salon, she launched ET proceedings against its owner, alleging, amongst other things, unfair dismissal and various forms of unlawful discrimination. In order to pursue her claims further, however, she first had to establish that she was an employee. The ET addressed the question of her status as a preliminary issue.

Following her apparent shift to self-employment, she was issued with a P45 and ceased to be a member of the owner’s auto-enrolment pension scheme. She was no longer entitled to holiday or sick leave. The ET nevertheless concluded that she had, throughout her time at the salon, remained an employee within the meaning of Section 230(1) of the Employment Rights Act 1996.

The ET noted that, following the purported transition, nothing changed save for the manner in which she was paid. To all intents and purposes, she remained an integral part of the salon team and there was nothing that would have enabled colleagues or her regular clients to distinguish her from other members of staff.

She had no realistic right to substitute another hairdresser to perform her work, she continued to be bound by the salon’s dress code, and the hours that she was required to work remained as before. She had to seek her manager’s permission before leaving work early or taking holiday leave.

There was no change in the mutuality of obligation between her and the owner and the level of control that the latter exercised over how she went about her work also remained the same. All her takings went through the owner’s till and she was neither an independent contractor nor in business on her own account.