Were actors working under a profit share agreement ‘workers’ for the purposes of employment legislation?
Not necessarily, held the EAT on the facts in MacAlinden v Lazarov and others .
Five actors were hired to appear in a play. They were recruited on an ‘actor’s contract’ which remunerated them by way of a profit share. The play gained critical success but did not produce a profit. The Claimants received nothing.
On the termination of their engagement they pursued claims to the employment tribunal for payment of the national minimum wage and holiday pay. They could only succeed if they were ‘workers’ as defined in the relevant legislation. The Employment Judge determined that they were workers. He considered that the Claimants undertook to perform work personally. And he found that there was a sufficient degree of mutual obligations for the Claimants to be workers.
On appeal, the Respondent contended that the Employment Judge had not properly considered whether the actors were carrying out a profession or a business undertaking so that the other party to the contract was a client or a customer, this being the exception to the definition of a worker.
The EAT agreed. On the witness evidence, there was some indication at least that the actors concerned were people who were embarking on a professional business undertaking. They appeared to be actively marketing their services as an independent person to the world in general rather than being recruited to work for any individual as an integral part of that individual’s operations.
In this case the Employment Judge had not applied the statement of principle set out by Langstaff J in Cotswold Developments Construction Limited v Williams t o the effect that the focus must be on whether the purported worker actively markets his services as an independent person to the world in general (a person who will thus have a client or customer), on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principal’s operations, on the other. The matter was remitted to a fresh employment tribunal.