Dancers are workers: Nowak v Chandler Bars Group Ltd and the history of dancer organising in London – by Katie Cruz

Are “sexual entertainment venues” paid by dancers to provide them with an opportunity to make a living by dancing for customers? Is the nature of the relationship between the venue and the worker akin to, for example, the payment of rent to a shop used for the purposes of selling haircuts to customers? Or do stripping venues recruit specific dancers to dance for customers according to terms set by the venue? In that case, is the nature of the relationship similar to a salon’s recruitment of a talented hair colourist that follows terms set by the salon regarding, for example, price and uniform? Which “side” of this debate you agree with is important; it reveals the extent to which you think that labour law should regulate the relationship between the venue and the worker. This debate is also at the heart of legal and sociological commentary on the “gig economy” and was aired in a recent dispute between a dancer and venue owner in the Employment Tribunal (Nowak v Chandler Bars Group Ltd UKET 3200538/2019).

 

In this post, I set Nowak v Chandler Bars Group Ltd within the recent history of, on the one hand, increased regulation of strip clubs via the Policing and Crime Act 2009, and on the other, the protest and mobilisation of dancers in London against aspects of this regime and for employment rights at work. Dancers have joined forces with the broader sex worker rights movement and United Voices of the World Union, and their efforts have culminated in an Employment Tribunal decision that concludes that they fall within the similar definition of “worker” contained within s.230(3)(b) of the Employment Rights Act 1996, Regulation 2(1) of the Working Time Regulations 1998, and s.146 of the Trade Union and Labour Relations (Consolidation) Act 1992. The claimant would also satisfy the “worker” status test for the purposes of s. 54(3) of the National Minimum Wage Act 1998, and would likely be employed under “a contract personally to do work” for the purposes of s. 83(2)(a) of the Equality Act 2010 and therefore protected against discrimination, harassment, and victimisation. It follows Nadine Quashie’s unsuccessful attempt to secure employment status for the purposes of her unfair dismissal claim against Stringfellows (Stringfellows Restaurant Ltd v Quashie [2012] EWCA Civ 1735). The Nowak case is a welcome development. It provides dancers with a legal route to access basic employment protections, and it allows dancers to retain the autonomy and status of self-employment that empirical work has revealed to be central to their working lives. The significance of this case is somewhat eclipsed, at least for now, by COVID 19 and the closure of venues across the country. I therefore conclude with some remarks about the potential uses and limits of the government’s Self Employment Retention Scheme for dancers and the efforts of sex worker rights activists to mitigate the economic effects of the pandemic.

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Sociological studies of work that focus on the capitalist labour process tell us much about day to day social relations between dancers, owners, and clients. These studies reveal extensive levels of worker control and high levels of economic exploitation or value creation practised by venues. The venue sets the price of the services and “pays” the dancer a cut of this, in combination with a system of fines for disobedience and “house fees” (payment for the use of the club and its facilities). Dancers must comply with obligations that relate to how they look, dress and conduct themselves in the workplace, including the use of phones, food, and toilet breaks. Protected characteristics in law, such as age, sex, gender, race and nationality, are key requirements of bosses and clients, and also structure the lives of dancers outside of the labour process. It is women that dance and they dance to make ends meet, to supplement wages or student loans. This system works to produce a good deal of profit for the venue and a good deal of competition amongst dancers, and encourages the provision of “extras” to customers to increase daily wages.

 

These themes are explored in the 2019 dark comedy “Hustlers”. Destiny is a racialised, single mother who cares for her grandmother, is in school, and whose dancing career bookends the 2008 financial crisis. Destiny ultimately joins forces with the top earners at the club, “Move”, upon the realisation that they are being exploited. The dancers’ tactic of drugging Wall Street types and rinsing their credit cards is perhaps not an example of collective organisation that ought to be endorsed.

 

But “Hustlers” does provide an accurate depiction of the labour process and the conflicting interests of bosses, workers, and clients. And the movie’s engagement with the knock on effects of the last financial crisis is particularly relevant given the current pandemic and coming recession.

 

Sociological studies of strip venues also make comparisons with the labour process of brothels and online platforms that deliver sexual content. And it is common to refer to stripping as a type of “sex work”, an umbrella term that covers the commodification of emotional, bodily, and sexual capacities for the purpose of sexual arousal. Dancers are part of the sex worker rights movement and campaign against the stigmatisation of all forms of sex work and for recognition that sex work is a legitimate form of work. The sex worker rights movement, then, sees continuity in the labour and lives of sex workers, and connects forms of sex work in an attempt to de-exceptionalise them.

 

The law, however, tends to exceptionalise a specific type of sex work, prostitution, as “sexual exploitation” and regulates it via a sexual offences framework. “Sexual exploitation” and “sexualisation” became a key concern of female politicians, women’s organisations, and feminist activists during the 2000s and this had an impact on the regulation of stripping venues. Jacqui Smith, then Labour MP and Home Secretary, introduced the Policing and Crime Bill into Parliament in 2008. Part 2 of the Policing and Crime Act 2009 (PCA), “Sexual offences and sex establishments”, introduced and reformed offences relating to prostitution, and gave local authorities increased powers to regulate “sexual entertainment venues”, defined as “any premises at which relevant entertainment is provided before a live audience for the financial gain of the organiser of the entertainer” (s.27(3)(1)). Relevant entertainment means “(a) any live performance; or (b) any live display of nudity; which is of such a nature that, ignoring financial gain, it must reasonably be assumed to be provided solely or principally for the purpose of sexually stimulating any member of the audience (whether by verbal or other means)”, excluding sex cinemas and sex shops (s.27(3)(2) and (3)).

 

But running a licensed strip club is not a criminal offence and dancers and customers are not at threat of arrest for soliciting each other’s services. The absence of a sexual offences approach to stripping means that the doctrine of illegality is not a block to the employment rights claims of dancers vis a vis venues (I’ll return later to the illegality defence and its potential impact on the employment claims of migrant dancers). I have long thought that there is an interesting conversation to be had about the potential worker protective coverage of labour law for dancers. Given the recent unionisation efforts of gig economy workers it is perhaps unsurprising that this dispute made its way to the Employment Tribunal. This dispute, then, fits into the burgeoning contestation of legal status amongst gig economy workers. But how did dancers get to the Employment Tribunal? Answering this question requires a brief detour into the recent history of dancer organising and capacity building alongside sex worker rights activists in London.

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In 2010, activists from the x:talk project and dancers in Hackney, London ran a successful campaign against the closure of strip clubs. Section 27 of the PCA amended the Local Government (Miscellaneous Provisions) Act 1982 and gave local authorities increased powers of regulation, including the power to control the number of “sexual entertainment venues” through closure or capping of numbers, according to what is deemed appropriate for that locality (s.27(5)). Hackney Borough Council wanted to close all of the strip clubs in the area. If successful, the Respondent’s venue would have closed. The x:talk project organised a meeting with workers from the clubs, including dancers, bar staff, cleaners and DJs, which was followed by a meeting with a Hackney local councillor and a protest outside Hackney Town Hall attended by dancers and activists from the x:talk project and the English Collective of Prostitutes (ECP). The outcome was that the Council decided to cap the number to the four existing clubs, including the Respondent’s.

 

The union Equity has dipped its toes into dancer organising. I spoke to an Equity representative in 2012 and was told that they had had contact with dancers at the time of the Policing and Crime Bill. Equity had, however, not had huge amounts of interest from workers, who, the representative pointed out, are often migrant and see their work in the sex industry as temporary. I was also told that stripping and dancing is a controversial issue for the trade union movement. At this point in time it was clear to me that grassroots organising was having an important impact on the day-to-day working conditions of dancers, by campaigning to keep venues open and offering other services, such as the English classes offered to migrant workers by the x:talk project. These grassroots initiatives remain the backbone of sex worker rights organising to this day (a theme I’ll return to in the final section of this post).

 

In 2014, the East London Strippers Collective (ELSC) was established. According to their manifesto, the “ELSC recognises the work of a stripper to be a legitimate job and profession, aims to promote high standards of employment and working conditions for all its members and all strippers alike, and seeks to de-stigmatise the choice to work as a stripper.” The same year Stacey Clare, one of the founding members of ELSC, described the exploitative and discriminatory working conditions and practices of venue bosses and how legal exclusion exacerbates this treatment. Clare clearly articulated the problem: “[S]trippers are denied employment status, leaving them with no legal protection whatsoever, despite in almost all cases being treated as employees, regardless of their right to independence. Employment rights of strippers simply do not exist, and there is no forum to speak out.” The ELSC provided this platform by organising meetings to share knowledge and experience, to discuss labour standards and stigmatisation. One such event was “The Art of Stripping” in 2015.

 

I was invited to this event to talk about the possible worker protective application of labour law, which I had been researching as part of my PhD thesis. In a 2013 article I had argued that the legal category “worker” would likely apply to dancers given the organisation of clubs, as revealed by sociological studies of venues and the Court of Appeal case Stringfellows Restaurant Ltd v Quashie [2012] EWCA Civ 1735. Nadine Quashie, a dancer at the London club Stringfellows, was arguing that she was an employee for the purposes of unfair dismissal. Like others, I believed that, based on this organisation of the labour process in Stringfellows, there was a case to be made that dancers are employees. However, in the process of fact finding and assessment the Employment Tribunal found that the club did not pay Nadine anything. As such, there was no wage-work bargain. Nadine accepted the economic risk and Stringfellows merely provided her with the space to earn cash as an independent contractor, reinforced by her acceptance that she was self-employed. The Court of Appeal agreed.

 

Employee status aside, I argued that Nadine, and dancers working in similar conditions, would fall within the definition of “worker” contained within s.230(3)(b) of the Employment Rights Act 1996 and Regulation 2(1) of the Working Time Regulations 1998, and would be employed under “a contract personally to do work” for the purposes of s. 83(2)(a) of the Equality Act 2010 and therefore protected against discrimination. Nadine was a (limb b) worker because she was contracted personally to perform the work and the venue was not a client or customer of any business undertaking carried on by Nadine. First, there were extensive obligations between Nadine and Stringfellows and, unlike employee status, limb b worker status does not require that the employer be obliged to pay the worker (Singh v Members of the Management Committee of the Bristol Sikh Temple UKEAT 0429/11). In other words, a limb b worker can be paid by donations, accommodation, or as Nadine and all other dancers are, by customers. Second, clear evidence of a requirement of personal service was provided by the fact that she auditioned for the job and was expressly prohibited from substituting or delegating her labour. Third, the “integration test” demonstrates that Stringfellows was not a customer or client of Nadine in her capacity as a dancer. This test was outlined and applied in the Respondent’s favour in another 2012 Court of Appeal case concerning limb b worker status (Hospital Medical Group Ltd v Westwood [2012] EWCA Civ 1005). Much like Dr Westwood and his relationship with the Hospital Medical Group, Nadine was in an exclusive relationship with Stringfellows, did not offer her services to the world in general, and was recruited to work as an integral part of Stringfellows’ business.

 

However, I also argued that this optimism needed to be balanced against a number of social and legal barriers blocking worker status claims and unionisation efforts. A major legal issue is the doctrine of illegality, which for dancers relates to immigration offences and the lack of a right to work. Post Okedina v Chikale [2019] EWCA Civ 1393 we know that, depending on the wording of the offence, legislative intent and criminal culpability, a migrant worker without the right to work might not be barred by illegality from claiming employment rights, such as unpaid wages. As Alan Bogg notes in a forthcoming article in the Industrial Law Journal, ‘Okedina V Chikale and Contract Illegality: New Dawn or False Dawn?’, this decision marks progress in the protection of the employment rights of migrant workers without the right to work. But he also points out that the reasoning in Okedina would likely not extend to migrant workers that have committed a criminal offence under the Immigration Act 2016, and was something of a missed opportunity for the Court of Appeal in terms of elucidating the worker protective and public policy focused illegality defence test found in Patel v Mirza [2016] UKSC 42.

 

Turning to the social barriers, the industry is transient and stripping is highly stigmatised. Another hurdle is that both bosses and dancers are attached to “self-employment” as a label for their relationship, albeit for quite different reasons. For management self-employment shifts the economic risk onto the shoulders of dancers. For dancers, however, attachment to self-employment is not explained by a desire to be economically vulnerable. Their attachment appears to have something to do with viewing stripping as a “private” matter and a reasonable distrust of both the state and employers. Dancers, I argued, want to be “unmanaged”. It is not hard to see a connection between demands for privacy and autonomy and distrust of the state and the high levels of stigma associated with female participation in the sex industry.

 

In 2017 I revisited these themes in an article with colleagues that had completed a UK wide study of strip clubs. Of particular interest to me was a contradiction revealed by their data. On the one hand, the data showed high levels of control and discipline in the labour process, and, on the other, dancers were attached to an everyday idea or ideal of self-employment. This observation led us to argue that there is a distinction between dancers’ aversion to de facto self-employment as it is practised by venues and their attachment to a form of de jure self-employment characterised by high levels of autonomy. Dancers sought to be treated in reality, and not just formally, as independent contractors. Self-employed status was a key attraction for many dancers because they believed that it would enable three different types of freedom — temporal, corporeal/behavioural, and financial  — and because of an intense identification with the label of self-employment. We described these freedoms as mainly “future oriented” because dancers do not enjoy them to a significant extent in the present. The conflict between this desire for genuine self-employment and related freedoms and the possibility of dancers claiming labour rights seemed clear to us.

 

This led us to explore an alternative route for improving working conditions in clubs. Self-employed dancers want financial autonomy and this includes a transparent, consistent, and fair system of pay. We concluded that dancers could articulate workplace grievances as a demand for “decent work” and collectively pursue this agenda via the licensing regime. As discussed above, the PCA 2009 gave local authorities increased powers to regulate “sexual entertainment venues.” While these powers have primarily been used to close or cap the number of clubs in a local area, they are also being used to regulate the relationship between dancers and club owners. The licensing regime, then, is a promising legal framework for dancers to ensure decent working conditions in clubs in the absence of individual employment tribunal claims.

 

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Come 2020, and the sex worker rights movement has moved from strength to strength. The collectivity amongst the sex workforce, and between sex workers and other workers, is inspiring. Sex workers are protesting and organizing against several connected issues: criminalisation, poor working conditions, stigma, and austerity. Dancers are a highly visible contingent of the movement. Sex worker rights groups in the UK now include Sex Worker and Advocacy Resistance Movement (SWARM, formerly Sex Worker Open University), Decrim Now, ELSC, United Dancers of the World (USW), and long standing organisations including the English Collective of Prostitutes and the xtalk project. Sex workers are also organising with unions and the feminist movement. And an important example of the latter is the Women’s Strike, which this year included a Sex/Work Strike protest against “against the sexist, racist and criminal laws that jeopardise the lives of sex workers.” Key to the case that is the subject of this blog is the alliance between United Dancers of the World and the United Voices of the World Union (UVW).

 

In November of 2018, Michael Ford QC and I met with representatives from USW and UVW. We discussed the working conditions in London clubs and the applicability of “worker” status for the purposes of guaranteeing basic labour protections. I came away from the meeting quite convinced that the social hurdles were going to be more difficult to mount than the relevant legal tests. A major hurdle was whether any dancer would be willing to put herself in the public eye. By late 2019 the UVW had settled two holiday pay claims made by dancers in London.

 

In one sense, then, my co-authors and I were wrong in 2017 to believe that there was little interest amongst dancers for legal recourse (I will return to this point later because it is not quite so simple). But I was right in anticipating that dancers are workers for the purposes of labour law.

 

Turning now to Nowak v Chandler Bars Group Ltd, the facts do not deviate from the labour process common to strip venues. The Respondent had a Code of Conduct (as required by its license) and House Rules. It and organised the labour process through a system of “house fees”, penalties, and commission on “sit-down’ and “VIP/Redroom” dances. The House Rules also contained provisions that: labeled dancers self employed and granted freedom to dance at other venues; allowed for substitution should the dancer not be able to attend her shift; and prescribed a number of rules relating to availability for and cancellation of shifts, appearance and conduct at work and outside of work, and the payment of house fees, commission, and penalties for non attendance (if no venue approved replacement were found) or for accepting cash direct from customers.

 

Dispensing with the Respondent’s argument that there was no contract between the parties for lack of mutual obligations, Judge Housego outlined the two remaining requirement for worker status: “The other two questions are whether there is personal service required for the contract? If yes, it is not a limb b contract if the Respondent is a client of the individual.” [para 61] The Respondent argued the following: that it was a client or customer of the dancer supplying a space for the dancer to make money; that dancers could come and go as they pleased, could dance elsewhere and send a substitute (albeit an approved substitute); that the venue did not pay the dancer. Rather, what money she made was dependent on how well she performed and negotiated with customers. Judge Housego disagreed.

 

First, there was a clear requirement for personal service. Dancers did not perform elsewhere. There was, in reality, no freedom to dance elsewhere. And dancers could not simply send a replacement if they were unable to attend. They could only suggest a possible substitute to management and it was up to the discretion of the club to veto the recommendation. It was not unusual for the venue to exercise this right. The Respondents relied upon the Supreme Court judgment in Pimlico Plumbers Ltd and another v Smith [2018] UKSC 29 to argue that their (limited) substitution regime was inconsistent with the requirement of personal service that is key to worker status. Judge Housego turned this argument on its head. The Supreme Court’s ruling in Pimlico on when substitution clauses will, or will not, contravene the requirement of personal performance was in fact “wholly supportive of the claimant.” [para 63] This is because the sort of limited substitution regime that will be inconsistent with personal service is not one that limits substitution to plumbers, or dancers, within the same organisation, let alone one that then depends on the approval of the business (here Chandler Bars Group Ltd) [para 63-64]. A substitution clause that would be inconsistent with personal service would be one that gave the independent contractor more discretion over their choice of replacement. A probable such clause would be one that allowed dancers to self select a dancer from another club, provided that that club recruited dancers with a similar appearance and level of skill.

 

Second, the Respondent was not a client of customer of any business undertaking of the claimant. Sonia sold her services exclusively to the Respondent and was integral to that business. The Respondent required dancers to interview for the job by attending an audition with the manager. The extensive system of control and fines also pointed to an inconsistency with the Respondent’s argument that it was simply a customer of the claimant. Judge Housego made a series of statements and posed rhetorical questions to highlight this discrepancy. “People in business are not fined by their clients” [para 66]; “Whoever heard of a customer telling someone in business on her own account that she could not use a mobile phone? And who would be penalised if they did?’ [para 67]; “that dancers do not compete with the Respondent … is likely to be inconsistent with the dancer being in business on her own account” [para 68]; and finally, “The Respondent takes a percentage of the money agreed by the dancer and the customer … This was not the product of any negotiation. It was something imposed on the dancers without discussion. It is not usual for the customer to dictate the price …” [para 70].

 

This is an important victory for USW and UVW. The result of the full hearing of the case is eagerly anticipated (though no doubt impacted by the outbreak of coronavirus, of which more in the next and final section). I don’t want to distract from the importance of this judgment. But I wonder whether and how USW and UVW will counter the skepticism with which many dancers view unionisation, the state and legal system? USW recently tweeted that there has been “a lot of confusion, misconception and some deliberate misinformation about the recent employment tribunal ruling that dancers are workers (with some legal rights) and not independent contractors (with none)” and have written a blog post in response. But I think that a key message to get out, which perhaps is unclear at the moment, is that, as Judge Housego reminded us his opening statement of facts, “the status of self employment is not inconsistent with being a worker” [para 11]. Limb (b) workers are a sub-category of the self-employed; dancers can be both self-employed and workers (see Clyde & Co LLP and another v Bates van Winkelhof [2014] UKSC 32). In practical terms this means that unionisation and basic worker rights do not signal any loss of freedom at work for dancers (however future oriented that freedom might be). Finally, it would make sense for UVW to communicate to dancers that worker status does not alter their status as self-employed for tax purposes.

 

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Fast-forward a mere four weeks and the UK is on lockdown due to the outbreak of a new virus sweeping the globe. Strip clubs are closed and the attention of sex workers and sex worker rights activists has been somewhat diverted away from improving working conditions. Like many other industries, the sex industry will have largely ground to a halt and many sex workers will be out of work, or attempting to find someway of moving online. One very relevant example is Cybertease, an online co-op strip club created and run by USW, of which the claimant is a member. Income is derived from online ticket sales and private dances that can be bought during the performances.

 

To conclude, I want to briefly address two important questions about coronavirus and stripping. First, will the government’s Self Employment Support Scheme, which grants workers 80% of their salary, be of any use to dancers? Second, what is the sex worker rights movement doing collectively to mitigate the economic hardship that it likely to be faced by the vast majority of sex workers?

 

The Scheme might be useful. Dancers will need to meet the following criteria: registered as self-employed for tax purposes, earn at least 50% of their income from self-employment, started their business before April 2019, and not make over £50,000. The Institute of Fiscal Studies has suggested that about two million self-employed workers will fall through the gaps of the scheme. Melanie Tether and Nadia Motragh, counsel at Old Square Chambers, have pointed out two issues that I believe will affect some dancers. In Nowak it was reported that Sonia earned about £30,000 per annum from stripping and many dancers do not earn over £50,000 each year. However, those that do will not be able to claim under the Scheme. Many dancers will work more than one job and stripping will be an important, often second, source of income. In other words, it is a job that fits around a day job or studying and will often be chosen as a way to make ends meet. Under the Scheme only those dancers that earn over 50% of their income from stripping will be able to claim 80% of their income. Dancers at both the top and bottom end of the earning scale stand to fall between the gaps in this scheme. And as Tether and Motragh point out, these gaps are not applicable to workers that fall under the Job Retention Scheme (JRS). The government is starting to address issues with the scheme for workers who fall under the JRS, including making clear that it extends to workers that are not employees but are paid via PAYE. It is imperative that it addresses the gaps and differential treatment of self-employed workers.

 

In order to mitigate the economic effects of the pandemic sex worker rights activists are organising hardship funds and SWARM is doing excellent work in the UK. The ECP and SWARM have stressed the connection between poverty, poor state provision for unwaged care work, and sex work. The global pandemic and attendant job losses for women in sectors such as sex work has seen the ECP and Global Women’s Strike ramping up their campaign for a “care income”,  and SWARM support the chorus of voices calling for a universal basic income.  Just this week it was reported that Spain is the first country in Europe to introduce a basic income in response to the pandemic. Might this pandemic be our chance to radically reimagine and regulate work in conversation with the sex worker rights movement? Fingers crossed. But what we can be sure of is that the business of stripping will be changed by the pandemic and if online clubs take off, co-operative, worker run platforms might make venues and managers increasingly irrelevant.

 

 

 

 

About the author: Katie Cruz is a Senior Lecturer in Law at the University of Bristol. She is a member of the Bristol Centre for Law at Work and a board member of the journal Feminist Legal Studies.

 

 

 

 

(Suggested citation: ‘K Cruz, ‘Dancers are workers: Nowak v Chandler Bars Group Ltd and the history of dancer organising in London,’ UK Labour Law Blog, 30 April 2020, available at https://wordpress.com/view/uklabourlawblog.com).