October 23, 2014

In a decision delivered at the end of last week, the Employment Appeal Tribunal has called into question the widely held assumption that actors are “workers” who are entitled to rights such as paid holiday and the minimum wage. The judgment has potentially far-reaching implications not only for organisations that engage actors but also for those that hire all types of freelance staff. The case involved a group of five actors who were hired to appear in a play. They were engaged under an agreement which provided that they would be remunerated by way of a profit share. As it happened, the play didn’t generate a profit so the actors received nothing. They brought claims alleging that they were “workers” and were therefore entitled to the minimum wage and holiday pay. After the tribunal initially upheld their claims, the Respondent lodged an appeal in which it argued that the judge had failed properly to consider the question of whether the play’s producer was a client or customer of a profession or business undertaking carried on by the actors (meaning that they would fall outside the “worker” definition in the relevant legislation). The EAT agreed. It found that the tribunal should have examined the way in which the Claimants carried out their work as actors. It went on to say that “if they were actively marketing their services as an independent person to the world in general, picking up or attempting to pick up work where available from a variety of sources, this may be a powerful indication that there were not workers“. It therefore remitted the case back to a fresh employment tribunal. This decision is significant for a number of reasons. First, it suggests that, when it comes to deciding whether someone is a “worker”, the question of whether they actively market their services in an attempt to pick up work is more important than the question of whether they are subject to a high level of control during the times when they are working. Secondly, it indicates that the fact that someone may work exclusively for one organisation will not necessarily make them a worker. In practice, most actors and freelancers operating in the media and entertainment industries will market their services to a greater or lesser extent, either by themselves or via agents. As a result, it may well be the case that many individuals who we assumed are entitled to “worker” rights such as paid holiday and the right to be automatically enrolled in a pension do not in fact qualify for these benefits. We will be preparing a more detailed briefing note explaining the implications of this decision. In the meantime, it would be advisable for employers to review the terms on which they engage freelancers to ensure that they accurately reflect their correct legal status. To assist with this we are offering a fixed fee freelance contract review service. For further information please contact me. A link to the EAT’s decision can be found here: MacAlinden v Lazarov and others