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UK Employment Appeal Tribunal Dismisses Cyclist’s Attempt to Prove Employment Status

July 20, 2020

The Employment Appeal Tribunal (EAT) handed down its judgment on 14 July on Jess Varnish’s landmark appeal against the decision of an Employment Tribunal (ET) in relation to her employment status claim against British Cycling. Dismissing her appeal, the EAT held that the ET was entitled to conclude that Ms. Varnish was not an employee or worker, and that the manner in which the ET had reached its conclusion was reasonable.

A finding in favour of the appeal could have had far-reaching implications for sport in the United Kingdom. If Ms. Varnish had been held to have employee or worker status, this could have represented a paradigm shift in terms of the legal rights of elite athletes and the funding of UK sport. Despite its failure and focus on employment status, this case may nevertheless be important in terms of provoking a reassessment of how UK governing bodies treat their athletes and ignite attempts by those organisations to improve the culture within their own sporting domain.

BACKGROUND

As explained in our previous LawFlash, former Great Britain cyclist Jess Varnish began legal proceedings against British Cycling and UK Sport when British Cycling terminated her Athlete Agreement in March 2016 due to performance-related issues prior to the 2016 Olympics. Ms. Varnish had brought claims of unfair dismissal and unlawful detriment for having made protected disclosures under the Employment Rights Act 1996 (ERA), and direct sex discrimination and victimisation under the Equality Act 2010 (EqA).

In its decision dated 16 January 2019, the ET found that Ms. Varnish was not employed by, or a worker of, British Cycling, UK Sport, or both British Cycling and UK Sport under a tripartite arrangement. In short, the ET found the circumstances to be wholly inconsistent with a contract of employment given that Ms. Varnish was not, in their view, personally performing work for remuneration. Ms. Varnish’s claims therefore failed as the relevant employment protections are only afforded to employees (for the purposes of the unfair dismissal claim under the ERA), workers (for the purposes of the whistleblowing detriment claim under the ERA) or those employed under a contract “to do work personally” (for the purposes of both claims under the EqA).

However, Ms. Varnish was given permission in December 2019 to appeal the decision on the following three grounds:

  1. The ET erred in law in finding that there was no “mutuality of obligation” between Ms. Varnish and British Cycling
  2. The ET erred in concluding that Ms. Varnish was not a “limb (b) worker”
  3. The ET’s reasoning was irrational in relation to certain findings of fact

EMPLOYMENT STATUS

In dismissing each ground of appeal and ruling that the ET was entitled to reach its decision on employment status, the EAT’s judgment suggests that it will be difficult for British athletes who receive funding from their governing body to establish an employment relationship with that organisation despite a degree of control in the relationship.

In Ms. Varnish’s case, the EAT found that the ET had adopted the correct approach in considering all the relevant factors of the relationship and in particular, assessing whether Ms. Varnish was provided with remuneration in exchange for providing her own work and skill in the performance of some service for British Cycling. In relation to work, Ms. Varnish’s personal performance was found only to amount to a commitment to train in accordance with her individual rider agreement in the hope of achieving success at international competitions (i.e., not personal performance of work or services for British Cycling). With respect to remuneration, the EAT found, in agreement with the ET, that the benefits Ms. Varnish received, albeit valuable, enabled her to train and compete at the highest level but crucially, were not Ms. Varnish’s remuneration for doing so. Rather, they were services provided to Ms. Varnish to use at her own discretion.

It was therefore held that the ET had correctly characterised Ms. Varnish’s relationship with British Cycling as an agreement under which British Cycling provided Ms. Varnish with valuable benefits and services, and not one of employment.

IMPACT

It is not currently clear whether Ms. Varnish will seek permission to appeal to the Court of Appeal. Interestingly, the EAT commented that its “conclusion does not mean that in another case, where perhaps the contractual provisions, and the balance between services provided to and performed by the athlete, are different, the training done by cyclists could not be found to amount to work.” It therefore remains to be seen whether UK athletes in related positions may establish an employment or worker relationship with their governing body. In the meantime, the judgment suggests that stringent training regimes, giving up a degree of control over the training process and the provision of various non-monetary benefits, will not be sufficient to establish an employee or worker relationship.

More broadly, however, while the judgment will be welcomed by sports governing bodies that may, in similar circumstances and from a legal perspective, continue to provide support and services to athletes without attracting financial or legal liability, this case has nevertheless been significant in highlighting concerns regarding the treatment and welfare of UK athletes. Although this judgment seemingly leaves many UK athletes in a vulnerable position with respect to their employment protection, this case will likely cause many UK sporting bodies to reassess how they support their athletes. This is particularly important given the EAT’s comments above in relation to a potentially different outcome in similar cases involving contractual provisions that more clearly indicate the existence of an employment relationship.

Professional sports bodies should both catalyse the promotion of a “speak-up” culture within UK sport and incentivise the creation of appropriate avenues for individuals to raise concerns in order to mitigate the risk of similar claims arising in the first place. Indeed, in a statement issued following the EAT’s judgment, British Cycling commented that “since Jess raised her concerns about the Great Britain Cycling Team in 2016, we have implemented significant changes to the culture and processes of our high-performance programme.” It seems likely that Ms. Varnish’s case will have a lasting impact on the relationship between UK governing bodies and its athletes beyond its narrower impact on athletes’ employment status.

CONTACTS

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

London
Louise Skinner
Matthew Howse
Pulina Whitaker
Lee Harding