In the latest decision on ‘employee’ versus ‘worker’ status, the Employment Appeal Tribunal (EAT) has found that a British Cyclist was neither an employee nor a worker of the British Cycling Federation and the package of services and benefits she received, did not amount to remuneration.
Jessica Varnish, a former professional cyclist, was selected for the British Cycling’s Olympic Podium Program in 2006. Following her selection, she entered into a series of contracts with British Cycling, the last of which was in November 2015 (the ‘Agreement’). The Agreement expressly stated that it was not a contract of employment and the participation in the program did not amount to an employment relationship.
Under the Agreement, Ms Varnish was required to train with the British team, enter identified competitions, wear team clothing, follow all reasonable directions of British Cycling and make sure not to engage in any personal commercial work or media appearances without British Cycling’s written consent. In return, British Cycling provided her with access to coaching, equipment, medical services and paid travel expenses.
In October 2016, a few months before the Rio Olympics, Ms Varnish was dropped from the program for performance related reasons. As a result, she raised a claim for unfair dismissal and discrimination against the British Cycling Federation. British Cycling disputed her claim on the basis that she was neither an employee nor a worker.
When considering Ms Varnish’s employment status, the Employment Tribunal (ET) found:
- There was no mutuality of obligation between the parties – a key factor in any employment relationship – as there was no work/wage bargain because Ms Varnish did not receive any money from British Cycling.
- The package of services she received did not amount to remuneration and there was no obligation on her to accept the services; nor were the services taxable by HMRC.
- Ms Varnish was not personally performing work on behalf of British Cycling.
The ET also found that Ms Varnish could not be a worker as under the Agreement the services were provided to her, not by her. Therefore, the ET found that the Agreement was “wholly inconsistent with a contract of employment”.
Ms Varnish appealed the ET’s decision principally on the grounds that there was “mutuality of obligation” and that she was a worker. She further argued that the ET’s reasoning was irrational.
The EAT dismissed her appeal. It concluded that the ET was entitled to reach the decision it had and that no error of law had occurred. The EAT noted that not every type of work gives rise to an employment relationship. In this case, the purpose of the Agreement was the mutual goal of winning medals. The benefits and services she received in return for working hard and training was not remuneration but was the opportunity to compete at the highest levels. The EAT confirmed the Agreement lacked the elements of mutuality of obligation and personal performance that are essential in an employment contract. They also held that Ms. Varish could not be considered a worker as the Agreement could not be viewed as a contract for service.
Based on the facts of this case, the ET’s conclusion is perhaps not surprising. However, as with all litigation, each case is very fact-specific therefore it does not automatically follow that an athlete cannot be an employee or worker. Although in Ms Varnish’s case her training did not amount to work, the EAT made clear that if the balance between services provided to and performed by the athlete had been different, the training carried out could have constituted work, which would have led to a different outcome.
How Blaser Mills Law can help
Employment status is a complex area that has rightly received much attention in the press. An individual’s work status dictates the level of employment protection and statutory rights they are entitled to. For businesses, it is important that they choose the right contract for the work they need doing.
Our expert lawyers work with you to gain a solid understanding of your business so that they can recommend the right approach for your workforce and industry sector. They can also work with accountants and other professionals to highlight and address any issues, (including tax), that may arise from the incorrect classification of an individual’s work status.
If you would like further information on the contents of this article please contact, our employment team on +44 (0) 203 814 2020, or email James Simpson at firstname.lastname@example.org or Debbie Sadler on email@example.com.