The long-awaited decision of the Employment Appeal Tribunal ('EAT') in Jess Varnish v British Cycling has now been handed down. The ruling brings to a close a four-year saga, which was triggered by Varnish’s abrupt dismissal from British Cycling’s elite programme a few months prior to the Rio 2016 Olympics.

Varnish issued claims of unfair dismissal and sex discrimination against British Cycling in the wake of her failure to qualify in the team sprint. The employee/worker status aspect of her claims was dealt with as a preliminary issue, Varnish contending that she was either an employee or a worker of British Cycling within the meaning of s.230 of the Employment Rights Act 1996, “ERA”. 

The Employment Tribunal originally concluded that Varnish was not an employee or a worker. Dismissing her appeal, the EAT has held that “based on an evaluative judgment taking account of all relevant factors, …. the Claimant was not an employee or worker”, and further that the Tribunal did not reach a perverse conclusion.

British Cycling like many other UK sports governing bodies, is a not-for-profit organisation that promotes and controls its sport. Varnish entered into a series of “Athlete Agreements” with British Cycling, under the terms of which she undertook (amongst other things) to train hard for the common purpose of winning medals for the British Cycling Team. The Agreements expressly stated that they were not contracts of employment and further that participation in the Olympic Podium Programme did not create an employment relationship. UK Sport, as funding agency, joined the proceedings as Varnish had received an Athlete Performance Award (“APA”) from UK Sport of varying amounts between 2007 and 2016. 

Under the most recent Athlete Agreement, British Cycling agreed to develop a performance plan (the “Individual Rider Plan”, or “IRP”), which identified Varnish’s personal performance, development goals and support service requirements, and further agreed to provide her with a package of services and benefits, including coaching support, team clothing and equipment, sports science support, medical services, travel and accommodation expenses, and access to facilities. The total package was estimated to be worth between £600,000 and £700,000 over a four year period. In turn, Varnish agreed to comply with the IRP, to train with the British Team Squad as and when required, to attend training camps as required, to enter identified competitions, and to follow all reasonable directions of British Cycling relating to the matters set out in the Agreement.  

The Employment Tribunal, whilst acknowledging that there was a degree of “control” in the relationship, held that there was no contract of employment with British Cycling. It also rejected Varnish’s contention that the services provided by British Cycling amounted to remuneration, holding instead that they were “benefits”. The Tribunal found that Varnish agreed to a high level of control under the Agreement with both coaches and athletes working towards a common goal, but also noted that Varnish was not obliged to use the coach supplied by British Cycling.

The Tribunal found that there was “no wage”. What occurred was that Varnish was selected to take part in the Podium Programme and this was reflected in the Athlete Agreement, the purpose of which was “to recognise the ultimate goal of everyone involved in the Podium Programme to win medals for the British Team at international competitions”. The Tribunal found it to be “significant” that the APA was not funded by British Cycling. It was funded by the National Lottery and Varnish had to apply to UK Sport to receive it. The Tribunal accepted British Cycling’s evidence that, unlike conventional wages, the relevant sum was not payable on the basis of past performance or past results or past work done, but instead was considered on an annual basis by considering the future potential of an athlete. The Tribunal also relied on the fact that the funding was from a third party, that Varnish had to submit an application for funding, that the award was means tested, and that the funding was in the form of a grant where the award was based on assessment of likely future potential as opposed to work done in the past, as factors which meant that the Claimant was not providing work or skill in consideration for wages or remuneration.

In terms of the personal performance aspect, the Employment Tribunal, whilst not doubting the “huge amounts of personal effort”  Varnish had put in, found that she was not personally performing work provided by British Cycling but rather was personally performing a commitment to train. This fell short of the requirements of a contract of employment.

The Tribunal found that the benefits provided were not remuneration but rather services. They were not automatic.  They were discretionary and (a minor point) the benefits were not taxable. In terms of the “worker status” argument, the Tribunal found that there was no minimum amount of work that Varnish was obliged to perform personally, and therefore dismissed that aspect of the claim as well.

Ms Varnish argued that the Tribunal had failed to recognise that in the case of a professional cyclist, the obligation and the agreement to train hard for the common purpose of achieving medal success was work done. Had the Tribunal appreciated that Ms Varnish’s training was work it would not have reached the erroneous conclusion that she was merely the recipient of services.

It remains to be seen whether Varnish will seek permission to appeal to the Court of Appeal. If she does, she will inevitably face the same arguments on the need to identify errors of law in the approach taken to her case.

It had been considered that the outcome of this case could potentially represent a radical shift in the legal rights of elite athletes and the way they are funded by their governing bodies. Had Varnish succeeded, the case had the potential to send shockwaves through the whole of elite UK sport. For the time being, governing bodies can breath easy, whilst we await the next elite athlete prepared to take on the establishment and attempt to extend the ever-widening scope of employment protection into this area.