Court of Appeal rules training repayment clause unenforceable
The Court of Appeal has provided important guidance on the enforceability of training repayment clauses in employment contracts.
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The employment tribunal case of Jess Varnish -v- British Cycling tested whether recipients of grants for actively participating in training should be classed as employees of their coaching and funding charities.
11 December 2019
Case Study
Having been recognised as having the potential to take part in British Cycling’s ‘World Class Programme’, Jess Varnish was awarded an annual grant by UK Sport to cycle, with the aim of winning medals for the British team in international competitions.
In return for being selected to participate in the programme, Jess Varnish agreed to be regimented by a training programme, which included details of what she could eat, as well as how, when and where she trained. In addition, British Cycling had a large degree of control over her media appearances and commercial work.
When she was dropped from the programme, Jess Varnish decided to bring claims for wrongful dismissal and sex discrimination in the Employment Tribunal. The Employment Tribunal would only have jurisdiction to hear these claims if she was deemed to be an employee or a worker.
Case Study
The three crucial factors in establishing employee status are control, mutuality of obligation and personal performance.
Given the level of control that British Cycling had over Jess’ lifestyle, the tribunal found that this was sufficient to satisfy the control factor of establishing employee status.
However, because Jess effectively volunteered for the programme with the desire of achieving success, the tribunal found no mutuality of obligation.
The tribunal also found that Jess was not obliged to personally perform any work and that she was merely required to train in the hope of achieving success in international competitions.
Given that two out of the three crucial factors in establishing employee status were missing in Jess’ case, the tribunal concluded that she was not employed by British Cycling. The tribunal also clarified that there was not a tripartite agreement with UK Sport.
This case reinstates the importance of taking care that, when making grants or providing services, the elements of a contract of employment are not present, unless they are intended to be.
To clarify the boundaries between employment statuses for charities, we provide step-by-step guidance, from drafting the initial agreement with the individual, through to managing changes to the relationship as it evolves over time.
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For further information and support in establishing employee status, please contact us on 01332 226 149 or complete the form below.
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