What is an employee? What is a worker? The answer to those perennially tricky questions has been illuminated by a ruling of the Employment Appeal Tribunal (EAT) that elite cyclist Jess Varnish fell into neither category when she parted company with the British Cycling Federation (BCF) (Varnish v British Cycling Federation).

Ms Varnish was still at school when the BCF spotted her talent and selected her for its Olympic Podium Programme. After her relationship with the BCF was terminated for performance-related reasons in 2016, she launched Employment Tribunal (ET) proceedings, alleging unfair dismissal and discrimination. The ET, however, ruled following a preliminary hearing that she was neither employed by the BCF nor a worker within the meaning of the Employment Rights Act 1996.

In its decision, the ET noted that she had entered into a written agreement with the BCF – a not-for-profit body which promotes and controls cycling in the UK – by which she undertook, amongst other things, to train hard for the common purpose of winning medals for the British cycling team. The BCF reciprocated by providing her with a wide range of services and benefits that were designed to promote her success and had an estimated value of £600,000 to £700,000 over a four-year period.

Submitting to a high degree of control by the BCF, she amongst other things agreed to train with the British squad when required, to attend training camps, to wear team clothing and to use her best efforts to maintain the highest levels of fitness. She committed herself to conducting herself appropriately at all times and permitted the BCF to use her image in promoting the Podium Programme.

The ET, however, noted that, although her membership of the Podium Programme enabled her to apply for a National Lottery-funded grant, she did not receive any money from the BCF. She could choose her own coach if she wished and the services and benefits with which the BCF provided her could not be viewed as remuneration for work that she personally performed. It was the BCF who provided her with services, rather than the other way around.

In rejecting her challenge to the ET’s ruling, the EAT noted that not all work is of a kind that gives rise to an employment relationship. It did not doubt that Ms Varnish trained very hard to become an elite athlete and that she could not have substituted someone else to perform her role. It concluded, however, that she did not personally perform work or services for the BCF.

The dominant purpose of the agreement was to achieve the mutual goal of winning medals. The benefits and services she received from the BCF were provided in order to enable her to train and compete at the highest levels; they were not her remuneration for doing so. Her agreement with the BCF lacked the elements of mutuality of obligation and personal performance that are the hallmarks of an employment relationship. She also did not enjoy the status of a worker in that the agreement could not be viewed as a contract for services.