The story of Megan Lloyd made the news recently. Megan was ‘self-employed’ as a beauty therapist in Sheffield city centre from August 2019 to February 2020.
Megan was a new mother and joined the business a few months after giving birth to her daughter, as a way to make some additional money on the side. Megan challenged her employment status in order to obtain the payments she was entitled to.
Despite Megan’s employer considering her to be ‘self employed’ the Tribunal found that she was actually considered an employee and made an award in Megan’s favour.
When you are self-employed, one of the benefits is that you should be able to ‘substitute’ a suitably qualified replacement to work your role if you are not able to work. However, salons frequently try to manipulate this situation by stating people are self-employed, when the reality is that they are in fact employed.
If you are employed, you are then entitled to the benefits that accompany employed status, such as protection from unfair dismissal, holiday pay and notice pay. Megan was asked to work Fridays and Saturdays and denied the right to appoint a substitute.
The issue
Megan noticed her pay packets were very small, and that her employer was deducting approximately 55% of her earnings before paying them to her, instead of paying her an hourly rate as you would expect if you were employed.
Megan raised concerns to the salon owner about the size of the deduction, which led to her dismissal by text message the following day. This meant for her final four week working period, Megan was only paid £104, a sum which fell under the National Minimum Wage for the hours she worked.
Megan said “I questioned her and didn’t accuse her of anything and just asked if she could look into the advice I had been given, the following day she sacked me.” Megan said she was keen to win the Tribunal and highlight how salons can employ people under a “false employment status”.
The verdict
Megan was successful in winning just short of £5,700 across multiple heads of claim. She was successful in claiming automatic unfair dismissal, based on the fact she’s raised whistleblowing allegations (in this case the Respondent’s failure to pay the national minimum wage) and was dismissed as a direct result of these.
Further reading
More in-depth information about unfair dismissal can be found here on our website.
In conclusion
The case highlights why it is important to ensure the correct employment status is considered properly by an employer, to ensure situations like this do not present themselves at a later date in time.
The judgement in the full can be found here.
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