Another instalment in employment status – Varnish v British Cycling

In the recent case of Varnish v British Cycling, the Employment Appeal Tribunal (EAT) has ruled that a professional sportsperson who is paid by lottery grants and sponsorship is not an employee or a worker. Instead, they are considered to be self-employed.

The Claimant (Jess Varnish) is a gold medal-winning track cyclist and was paid via sponsorships and grants. The Claimant had entered into various Athlete Agreements in which it was stated that it wasn’t a contract for employment. The Agreement she had with British Cycling was not renewed in March 2016 due to performance-related reasons. The Claimant asserted that the non-renewal was both an act of discrimination and unfair dismissal.

In order to successfully bring her claims, the Employment Tribunal needed to consider whether the Claimant was an employee or a worker. This status was disputed by the Respondent, and at first instance, the Tribunal found that she was self-employed. This was appealed by the Claimant.

The EAT conducted a review of the many decisions on employment status including mutuality of obligations under Ready Mixed Concrete, the dominant person test in relation to the main reason for the person’s engagement, the ability of an individual to negotiate any personal terms, and the need to look at all factors in total.

The EAT took into account various aspects of the relationship between British Cycling and the Claimant and determined that the Claimant was not an employee because:

1. Public funds were used to provide the Claimant with coaching;
2. The Claimant could select her own equipment and her own coach;
3. British Cycling did not remunerate the Claimant; and
4. A grant from UK sport was paid to the Claimant rather than ‘wages’.

The EAT further considered whether the Claimant was a ‘worker’ and concluded that the nature of the work did not amount to the personal performance of work or services for British Cycling. In fact, the EAT concluded that the Athlete Agreement was a provision of services from British Cycling to the Claimant, not the other way around.

This is an interesting decision by the EAT because it brings some clarity to the employment status of professional athletes. Whilst it indicates how the status of other athletes might be considered, along with some of the relevant factors, it is important to remember that when determining employment status, the Tribunal will focus heavily on the facts and will consider all the elements before it when making a decision. In this case, the lack of remuneration and freedom to decide how and when to train were major factors in deciding that the Claimant was not an employee.

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Employment status is a significant issue and should be dealt with very carefully.

If you are unsure about how the individuals connected with your organisation should be dealt with, we would recommend that you take legal advice from our specialist Employment team, who can be contacted through this website or by calling 0330 404 0752.