You may be bored of reading about employment status and the gig economy by now and frankly, who could blame you. However, this is an employment status case with a difference.
This month UK Sport, which provides funding for over 40 summer Olympic and Paralympic sports, appeared before the Manchester Employment Tribunal in a case which could change the practices of the government agency forever. Jess Varnish, a former British track cyclist raised a claim against UK Sport and British Cycling for sex discrimination and unfair dismissal. However, in order for the Employment Tribunal to hear both of these claims, Varnish must first prove that she enjoyed employee status.
In 2016, Varnish was informed by the Olympic Podium Programme that her contract with British Cycling had not been renewed. She alleges that during the non-renewal discussions, the Performance Director Shane Sutton told her to ‘move on and get on with having a baby’. He was cleared of making this remark during a British Cycling investigation. However, a draft independent review carried out in March 2017 found that the internal British Cycling investigation into allegations of sexism had been sanitised. It also suggested that Varnish had lost her funding as an act of retaliation for challenging her coaching staff. The final version of the report which was published in June 2017 did not mention this.
Case law on employment status has developed three-fold in the last few years with landmark cases involving companies such as Uber and Deliveroo deliberating over the issue. When determining employment status, the Employment Tribunal will not only look at the contract in place but will also look behind the contract to the reality of the relationship between the parties.
Although there are a large range of factors that will help the Employment Tribunal determine employment status, three key factors have emerged out of case law in recent years:
- Mutuality of obligations: if an individual is an employee, the employer would be under an obligation to provide them with regular work and the individual would be under an obligation to make themselves available to do the work. If an individual is self-employed, the employer would not be obliged to offer regular work and the individual would not have to accept any work offered.
- Control: If an individual is an employee they would be under the control of the employer to the extent the employer is their ‘master’. The employer would control what the individual does, how they do it and when they do it. The individual would also be expected to conform to the employer’s standards. This is in contract to a self-employed individual who can determine when and how they work and is not under the direct supervision of the employer.
- Personal service: An employee would be required to provide their services personally. This means that either they would have no right to substitution or any right would be subject to the employer’s approval and only in certain situation. An individual with self-employed status would not be required to provide the services personally.
Ordinarily, none of these factors will be determinative in and of themselves as the Employment Tribunal will seek to look at the whole picture. Where an individual does not reach the higher benchmark of employee, this does not necessarily mean they are self-employed as they may still have worker status. Whilst workers cannot raise a claim for unfair dismissal, they are still protected from discrimination under the Equality Act 2010. Therefore, even if Varnish is not considered an employee, her sex discrimination claim may still be heard by the Employment Tribunal if they determine that she is a worker.
In her evidence to the Employment Tribunal, Varnish described the ‘extreme control’ that British Cycling had over its cyclists. She referenced the fact that coaches would listen through the hotel door to see if the athletes were still awake when they went to training camps and that they carried out regular blood tests. She also alleges that they controlled which sponsorship deals she could accept and would punish athletes if they turned up late for training sessions. In a written statement submitted by former British Cycling doctor Richard Freeman he commented that British Cycling coaches had absolute control over cyclists and disapproved of them questioning their training regimes.
Conversely, Varnish admitted in cross-examination that she had set up her own company in order to alleviate the level of tax she paid on sponsorship earnings. British Cycling have denied throughout that Varnish was one of its employees claiming there was no mutuality of obligation. They have argued that she received grants, not remuneration, to allow her to train and prepare for Olympic and World Championship events and to succeed on her own account.
Future of UK Sport
Having heard final submissions, Judge Ross confirmed that she would reserve her judgment and hopes to deliver it by mid-January. For the time being, then, it remains unclear whether Varnish and her peers could be considered employees of UK Sport and British Cycling. However, if that is the decision Judge Ross makes, this could have huge ramifications for UK Sport.
UK Sport currently gives more than 1000 athletes grants of up to £25,000 a year tax-free. If Varnish is successful in arguing that she is an employee, this could affect how grants are awarded to other athletes as UK Spot would have to pay pension and national insurance costs. It may also change the contractual terms that athletes enjoy, with many in the industry hoping it could lead to the negotiation of better terms. Finally, it would also afford athletes employee rights such as accessing grievance and whistleblowing procedures or being able to raise claims of unfair dismissal.
Law At Work will keep you updated on the progress of this case. If you have any questions about how employment status issues might affect your organisation then get in touch with your dedicated legal manager today.