A number of actors that worked under a profit sharing arrangement have been denied the right to be paid the national minimum wage.
The Employment Appeal Tribunal has rejected the original judgement because it failed to apply the correct legal test to see whether the employed actors were defined as ‘workers’.
The case involved 26 actors that were involved in the theatre production of David Edgar’s Pentecost in 2012.
The actors involved agreed in advance to participate in the production on the basis of a profit share, whereby 60% of any profits generated were to be distributed evenly among the cast.
However, the production lost money, so there was not any profit to share. Four cast members, with support of the actor’s union Equity, brought a claim against director Galvin McAlinden for pay and holiday pay, citing minimum wage legislation.
In order to qualify for the national minimum wage, it is necessary to be classified as a ‘worker’ (as defined by statute). However, self-employed professionals who advertise and market their services are not considered workers and do not qualify for the minimum wage.
The Employment Tribunal agreed that the actors were entitled to the national minimum wage, but on appeal it was found that it had failed to consider whether or not the actors are in fact self-employed professionals, as opposed to workers.
Judge David Richardson, delivering the judgment, said: “It is no doubt true that some of the claimants were just starting out on what they hoped would be acting careers.
“The question, however, still arises: upon what were they embarking? Was it a profession or business undertaking (or both)? If they were actively marketing their services as an independent person to the world in general, picking up or attempting to pick up work…from a variety of sources, this may be a powerful indication that they were not ‘workers’.”
Paul Jennings, employment and discrimination lawyer at Bates Wells and Braithwaite, added: “The original judgment was flawed. It failed to evaluate whether or not actors are self-employed professionals. But there is a wider point to this appeal.
“Clearly, the national minimum wage and the living wage are exceptionally important and the exploitation of workers is unacceptable.
“But profit sharing, in the true sense, does not involve exploitation. It is extremely common for artists to collaborate and agree to work on the basis that they will share any profits generated.
“Employment status is an extremely important area of the law, it determines the rights and protections available and can have profound implications in relation to, for example, tax liability.
“In the last three years alone the Court of Appeal and the Supreme Court have had to decide the employment law status of volunteers, lap dancers and Methodist preachers.
“Given the complexities in this area of law, it is little wonder that the status of actors proved to be problematic. This judgment, however, provides valuable guidance.”
This case will now be sent back to a fresh Tribunal for re-consideration.
