Varnish appeal analyses key components of employment status (1)

Overview

This case (in which Mills & Reeve represented the British Cycling Federation) was about the legal status of elite cyclist Jessica Varnish when she was participating in their podium programme.

Earlier this month, the Employment Appeal Tribunal upheld the employment tribunal’s decision that she was neither an employee nor a worker while she was taking part in the programme. 

This bold statement of the outcome of the litigation doesn’t do justice to the EAT’s lengthy and thoughtful judgment.

Main features of the podium programme

Before looking at the wider implications of this decision, it is necessary to understand how the podium programme was structured.  Every year from 2007 to 2016 Jessica Varnish entered into a contract with British Cycling which allowed her to participate in their training programme, which they both hoped would bring her success, and in particular Olympic medals.

Being on their programme gave her access to valuable specialist coaching, facilities and equipment, though she was entitled to retain her own coach.  It also enabled her to apply for a discretionary grant from UK Sport, funded via the National Lottery.  Under the annual agreement, Ms Varnish, like the other athletes on the programme, was subject to a number of significant commitments and restrictions – for example in relation to training arrangements, doping compliance and image rights.

British Cycling was entitled to terminate or suspend the agreement at any time.  It was the termination of the agreement on 31 March 2016 which gave rise to this litigation.

Two key issues

The employment tribunal needed to look at the totality of the arrangements to determine whether Ms Varnish was an employee (benefiting from the full range of employment rights); a worker (with less significant but still extensive rights); or neither.

Two issues were particularly important in this evaluation:

• Was there a “work/wage bargain”?
• Was Ms Varnish providing “personal service” to British cycling?

In relation to the first issue, the employment tribunal concluded that although she was training very hard, this could not be regarded as work, nor could the benefits she was offered as part of the programme be regarded as pay.  Any grant she received from UK Sport while she participated in the programme could not be regarded as pay either, since both receipt of the grant and its amount were discretionary.

In relation to personal service, it was more a case of British Cycling providing services to her than the other way round.  While they both shared common aims with regard to medal success, Ms Varnish was essentially training for her own benefit.  The fact that British Cycling had considerable control over her training activities and general conduct while she participated in the programme did not alter this analysis.

The EAT has now confirmed that the employment tribunal had been entitled to make this evaluation, and its reasoning did not involve any material legal errors.  The appeal against the tribunal’s decision has therefore been dismissed.

Wider lessons

Our employment courts have had to analyse a great variety of arrangements between individuals and organisations of all types in order to determine how the relationship in question should be categorised for employment rights purposes.  This case provides the latest example of that, and probably one of the most unusual.

Like many cases before it, it emphasises the need to look at all the ingredients of the relationship in order to reach a decision on the status.  As the EAT puts it:

“The legislation does not seek to define what is meant by “work” or “service”. The constantly evolving nature of what is regarded as amounting to work or service would probably make such definition impossible, or at least liable to be quickly outmoded. Not all work will be of the kind that gives rise to an employment relationship; the hard-working student at University is a possible example of that.”

This approach may be frustrating for employers and employees alike when a dispute arises, but it can be difficult to come up with a concise definition of an employee. 

At the time of writing, the Supreme Court is considering Uber’s final appeal in the litigation about the status of its drivers.  This will give the Supreme Court the first opportunity for many years to develop and refine its guidance on how employment tribunals should approach these cases.