Where a written agreement provides that a professional sportsperson is not an employee and is paid by lottery grants and sponsorship, must that person be considered as an employee or worker (contrasted with genuinely self-employed)?
No, held the EAT in Varnish v British Cycling.
The Claimant is a gold medal winning track cyclist. Her contract with British Cycling was not renewed in 2016. British Cycling said that this was due to performances, but Ms Varnish's claim was that this was an act of discrimination and unfair dismissal. An employment tribunal decided that she was not a worker or an employee. Ms Varnish appealed.
The EAT conducted a wide-ranging review of the historical decisions on employment status and included the following observations:
1. the requirement that there be a mutuality of obligations is simply a refinement of the Ready Mixed Concrete requirement to provide work and skill to an employer;
2. the 'dominant purpose' test of what the main reason is for a person's engagement can be used to distinguish between workers and non-workers as well as employees and non-employees;
3. the starting point should usually be that an employee has lesser bargaining power than an employer and the lack of ability to negotiate individual terms will normally point towards rather than away from employee status;
4. after weighing up the competing factors pointing towards employment status and away, the tribunal should stand back and look at the whole picture before reaching a conclusion.
The tribunal in this case decided that the use of public funds from the National Lottery to provide coaching, the lack of remuneration from British Cycling to Ms Varnish and a grant from UK Sport that took the place of 'wages' was inconsistent with being an employee or a worker. The EAT decided that judgment was open to the tribunal where there was no challenge that the written agreement was a sham.
Thanks to Matthew Jackson of Albion Chambers for preparing this case summary.