A post about managing contingent labour spend… and lapdancers…

Over the last few years, there has been increased focus on organisations trying to avoid their obligations to staff by re-classifying people as independent contractors rather than employees.

This can help the employee get out of paying certain taxes (National Insurance in the UK for instance) and also avoid costs related to sick pay, maternity or sickness benefits, or pension costs. It may also protect against action for unfair treatment of staff – dismissal, bullying or discrimination for instance.

And this whole topic is of course relevant to procurement professionals, as these “contractors” will therefore be classed as suppliers, or will be engaged usually through other third party suppliers. New opportunities have grown up around this development of the contingent labour market, for Vendor Management Solutions (VMS) software providers, and managed service providers (MSPs), who can take on responsibility for managing organisations’ contingent labour resource.

Governments have also developed regulations to try and stop organisations “abusing” the process by classifying people who are in reality staff as “contractors” or service providers. And every so often, this comes into the public domain when there is a legal challenge.

Ms Quashie

As the Guardian reports, last week, Stringfellows, the famous London “gentlemens’ club” lost the latest hearing in a case where one of their dancers, Nadine Quashie, is claiming unfair dismissal. Stringfellows claim she signed a contract saying she was self-employed, so cannot go to a tribunal for a job she never had. She was not an employee, but an independent contractor, with no right to claim unfair dismissal.

She says that she was a de facto employee – she has a schedule she had to follow, was prevented from setting her own prices, and the club did not allow her to work anywhere else. All of these factors suggest an employment relationship, not a contractual service provider.

In a newly released decision, the judge in the case, Jeremy McMullen QC granted Quashie permission to take her case against Stringfellow Restaurants Ltd to an employment appeal tribunal in “this very unusual case”. The fact that she was regularly “rostered” to work on pre-arranged days meant, the judge said, that she had an arguable case that she was employed by the club. Stringfellows, which won an unfair dismissal hearing last year, has appealed against the latest ruling.

Mr Stringfellow - nice!

If she does win, it could have major implications – it would suggest that organisations will not be able to get out of employment obligations merely by getting an individual contractor to sign a piece of paper.

While we don’t approve of most employment regulations, in this case, we feel that if you’re going to have them, they should be followed - you can draw your own conclusions about Ms Quashie and whether it looks like she was an employee or a supplier. Get rid of the legislation entirely by all means, but don’t have it in place so that those of us who are law abiding get caught up in it, but others just ignore it.

And by the way, in our experience, public sector bodies abuse this as much as anyone. Contractors working full time for years as members of staff in public bodies – 16 years was the record we came across...

Finally, we note that Ms Quashie studied accountancy and finance at Thames Valley University , and was elected to the student council. She has shown commendable tenacity and determination taking her case so far. "I want dancers to have the same employment rights as others. I hope a positive outcome will help bring about better regulation of the industry" she says.

She sounds like a clever and charismatic young lady, with good inter-personal skills – a perfect procurement leader of the future perhaps? But she did earn £113 K in 2007/8 (the Guardian obviously did a D&B on her accounts..) so it would have to be a senior role and a pretty good offer if you’re interested in recruiting her..

Voices (2)

  1. Jason Busch:

    Peter,

    I’m just reading this … I can’t believe that Jane would tolerate you researching such an area despite the fact it is on a professional services procurement topic (and she is a professional, after all). I’m guessing that by now she has installed new tracking software in your Google searches (images as well, so be forewarned!) so be more careful …

    There’s another direct materials sourcing angle to this case … not to mention CAPEX. Dancing poles are definitely CAPEX and have seen commodity price inflation of late, but do pasties go into COGs? Perplexing!

  2. Life:

    At least we now know where some of that ““undeserved” wealth from exploitation of imperfect markets” ends up, although I’m still trying to reconcile the implications for the “launch of procurement activism” in this context.

    To borrow from Dan, it would appear that in the City, as “In local government, helping the local economy, or getting residents into work, is just as important as making savings”…. Obviously.

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