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Varnish Employment Appeal ruling may not be the end of the road

Emily Chalkley, senior associate at law firm Charles Russell Speechlys, explains why the UK’s Employment Appeal Tribunal ruled against cyclist Jess Varnish’s claim that she was employed and unfairly dismissed by British Cycling and assesses the impact of the decision

Jess Varnish, the former track cyclist, has lost her appeal in her landmark employment tribunal case against British Cycling. The outcome will be welcome news to the sporting governing bodies because if Varnish had been successful it could have set a precedent and potentially given over 1,000 athletes UK employment rights and pension rights; meaning more financial cost to sporting bodies and greater risk around legal claims.

The Employment Appeal Tribunal (EAT) has held that the employment tribunal was entitled to conclude that Varnish as a professional cyclist was neither an employee nor a worker of British Cycling. The EAT looked into a number of employment status tests, but held weight to the Athlete Agreement which governed Varnish’s professional relationship with British Cycling.  The Athlete Agreement expressly stated that it was not a contract of employment and that it was not intended to create an employment relationship. Under the agreement, British Cycling was required to develop a performance plan and goals for Varnish and to provide support services. Varnish had access to, but did not have to utilise, a package of services provided by British cycling, including coaching support, team clothing and equipment, sports science support, medical services, travel and accommodation expenses, and access to facilities. In return, Varnish agreed, among other things, to train hard for the purpose of winning medals for British cycling team, attend training camps, enter identified competitions, wear team clothing, obtain and maintain the highest possible levels of health and physical fitness, and allow her image to be used in a promotional capacity.

The employment tribunal in her original case decided that the use of public funds from the National Lottery to provide coaching, the lack of remuneration from British Cycling to Varnish and a grant from UK Sport that took the place of ‘wages’ was inconsistent with being an employee or a worker. The EAT agreed and concluded that the Athlete Agreement was properly characterised and was not a sham. British Cycling provided her with valuable benefits and services, including the provision of world-class coaching, but this was not a contract under which she was deemed to work for British Cycling.

This case shows the importance of ensuring that clear and accurate written agreements are put in place and the need to take legal advice around employment status at the outset; especially as there are so many unique arrangements that exist across different sporting bodies.

Varnish undoubtedly trained hard in pursuit of the common purpose of winning medals for the British cycling team, but this did not amount to ‘working for’ British Cycling pursuant to an employment contract. The EAT did not agree with Varnish’s Counsel that a comparison could be drawn between Varnish and professional footballers, who are usually employed by the football club they play for.

For Varnish personally it means that she is prevented from moving to the next stage of her claim; to sue British Cycling and/or UK Sport for unfair dismissal and sex discrimination. Varnish disputes the fairness of her removal from the team, which British Cycling claimed was for performance reasons. Varnish also claimed she had been told “to go and have a baby” by British Cycling’s former technical director Shane Sutton. Varnish may feel that the EAT’s decision was morally unjust, but it was an unsurprising result from a legal perspective. She has not yet commented on the ruling, but she may still seek to continue the fight in the Court of Appeal. If she does, and if she is successful, it could yet have a huge effect on sports funding, as UK Sport could be forced to restructure its funding programme, paying national insurance on behalf of athletes and pension contributions for the first time. It could also lead to athletes making backdated financial claims.

Even if Varnish decides to give up the fight, employment status cases are extremely fact-specific and the EAT’s judgment states The Tribunal’s 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 a cyclist could not be found to amount to work.” So until the legislature sets clear guidance on employment status we may see more athletes follow in her footsteps and bring expensive and complicated employment status claims in the employment tribunal.

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