Olympic athlete receiving funding from sports body not an employee: Varnish v British Cycling Federation, UK Sport

Summary

In Varnish v British Cycling Federation, UK Sport (Case No 2404219/2017), the Employment Tribunal considered whether the claimant, a former Great Britain cyclist, was an employee or worker for either of the respondent organisations (or jointly under a tripartite agreement) within the meaning of the Employment Rights Act 1996 or the Equality Act 2010. In December 2019, the Claimant won the right to appeal the Tribunal’s decision and the appeal is likely to be heard in 2020.

The Tribunal held that she was not. Instead, the Tribunal found that the relationship was more analogous to the provision of an education grant to a student. The dominant purpose of the contractual arrangements entered into by the claimant was to enable her to be the best athlete she could possibly be. In those circumstances, no employment relationship arose.

Background

The claimant brought claims of unfair dismissal, direct sex discrimination, victimisation and unlawful detriment for having made protected disclosures. Her claims centred on the termination and non-renewal of her contractual arrangements when she was a professional cyclist with the GB Cycling Team.

The claimant was a very talented track cyclist. Since 2010, she had been part of the Podium Programme for elite world class cyclists run by the first respondent, British Cycling. The relationship between British Cycling and the claimant was reflected in an “Athlete’s Agreement”. Although no funding was provided under this agreement, the claimant agreed to develop and agree an “individual rider plan” which was effectively an agreement to train in the hope she would be selected to compete for the British Cycling Team.  

The claimant also received (following an application) a tax-free grant (known as an “Athlete Performance Award”) from the second respondent, UK Sport (a public body responsible for funding Olympic and Paralympic sport at a UK level, represented by Jane Mulcahy QC). Although administered by UK Sport, the Award was funded by the National Lottery. The purpose of this funding was to provide the claimant with a financial platform to be able to focus on full or part-time training. The funding was subject to means-testing and provided solely at the discretion of UK Sport (upon receipt of recommendations by British Cycling).

Was there an employment relationship?

The Tribunal considered that there was no employment relationship between the claimant and British Cycling giving rise to employee or worker status. In this respect:

1. There was no mutuality of obligation. British Cycling did not provide any remuneration to the claimant (and nor could the clothing, coaching, personal development and other benefits or services provided to the claimant constitute such remuneration). Instead, the claimant was eligible as an athlete selected for British Cycling’s Podium Programme to apply to UK Sport for funding from the National Lottery. British Cycling did not provide any work for the claimant.
   
2. The claimant was not personally performing work provided to her by British Cycling. Rather, she was personally performing a commitment to train in accordance with the individual rider plan in the hope of achieving success at international competitions.
   
3. Control of the claimant by British Cycling was a significant feature of the relationship, including via the clauses of the Athlete Agreement. British Cycling had control over where and when the claimant trained, the terms of her media image and contractual appearances for British Cycling and restrictions on her personal commercial work. Ultimately, however, although the claimant was subject to control, this factor was outweighed by the lack of mutuality of obligation and no personal performance consistent with an employment relationship.
   
4. The Tribunal also considered other factors including that: state-of-the-art equipment was provided to the claimant although she could choose to use alternative equipment; British Cycling was a membership organisation; the claimant had established a business on her own account, and the fact that the benefits received by the claimant from British Cycling were not taxable. The Tribunal considered that these other factors pointed against employee status.
   

The Tribunal also considered that there was no employment relationship between the claimant and UK Sport. In this respect:

1. There was no mutuality of obligation. The claimant was simply provided with a tax fee grant to enable her to fulfil her dreams as an athlete. Further, the grant was provided on an annual basis based on an assessment of future performance by British Cycling; it was not “payment” for past performance in any sense.  
   
2. The claimant was not personally performing work provided to her by UK Sport. In fact, there was no day-to-day relationship between them.
   
3. UK Sport did not have any control over the claimant, save for an agreement by the claimant to carry out a maximum of three appearance days every year for the National Lottery. (In fact the claimant never made any such appearances.)
   

Finally, the Tribunal rejected the submission that there was a tripartite agreement between the claimant and the respondents, with both of them acting as the claimant’s employer.

Comment

National sporting and funding bodies are likely to breathe a collective sigh of relief following this judgment. Had an employment relationship been found to exist, this would have had significant consequences for organisations such as British Cycling and UK Sport and their contractual and funding arrangements for elite athletes. Such organisations would have been subject to the obligations required of employers under the Employment Rights Act and related legislation, as well as by reference to the Equality Act 2010.

The Varnish case, however, was at the outer edge of what might possibly constitute an employment relationship. Given different facts – contractual arrangements that imposed a work for wage component and/or greater degrees of control, for example – the employment relationship line may well have been crossed.