A director ordered by a tribunal to pay four actors the minimum wage for their performances in a profit share production has won an appeal against the decision.
The Employment Appeal Tribunal has ruled that the original tribunal’s decision that the actors hired by director and producer Gavin McAlinden were “workers” and therefore entitled to the minimum wage had failed to apply the correct legal test.
The ruling will come as a severe blow to union Equity, which supported the actors in their case against McAlinden last year and which had hailed the original ruling as a judgement  that served notice on “bogus” profit share on the fringe.
Now, however, the case will be referred back to a tribunal for another hearing, which has the potential to set a new precedent regarding actors’ entitlement to pay when employed on fringe productions.
McAlinden said he had “nothing but respect” for Equity, but added: “This time I feel they took the wrong stance. Acting is a very tough industry and I believe actors should have the right to say ‘yes’ or ‘no’ to profit share productions. Most profit share producers are completely devoted to the artistic process, work very hard and invest – and often lose – their own money. I was completely open with the cast – everyone knew and accepted that they were unlikely to make money. Nevertheless, we produced a critically acclaimed play, and it is a piece of work that I am proud of.”
The play at the centre of the dispute was a fringe production of David Edgar’s Pentecost staged at St Leonard’s Church in 2012.
There were 26 actors in the production, who agreed to be paid a share of 60% of any profits.
With the support of Equity, four cast members submitted claims to the Employment Tribunal for pay and holiday pay, citing minimum wage legislation.
At last year’s hearing, the judge ruled that the actors should have been paid minimum wage – despite the production being advertised as profit share – because they qualified as workers under the definition of the National Minimum Wage Act and the Working Time Regulations 1998.
However, the appeal found that the original tribunal had failed to consider whether or not the actors were in fact self-employed professionals, rather than workers, and therefore not entitled to the minimum wage.
Paul Jennings, a lawyer from law firm Bates Wells Braithwaite, which represented McAlinden, said: “The original judgement 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.”
He added: “Requiring a director, choreographer or conductor to pay the minimum wage in circumstances where there is no independent funding and the participants have agreed in advance to a profit share arrangement runs the risk of stifling fringe there and other collaborative artistic projects.”
The case is expected to be heard again in a couple of months.