Former track sprinter Jess Varnish has lost her landmark employment tribunal against British Cycling and UK Sport, which she had hoped would prove she was an employee of the bodies and could thus sue them for wrongful dismissal and sexual discrimination.

The ruling means that the 28-year-old is unlikely to be able to take both bodies back into the courtroom and prove her claims that: British Cycling had “extreme control” over her and other athletes; that she was discriminated against by former coach Shane Sutton; and that she suffered detriment for being a whistleblower against the national federation.

She was dropped by the Great Britain squad before the Rio Olympics in 2016 with coaches reasoning that it was a performance-based decision. However, her subsequent high-profile claims, including that there was a culture of fear at the Manchester-based organisation, has since caused change at its headquarters.

At a tribunal in Manchester in December, both BC and UK Sport claimed that national lottery funding awarded to Olympic athletes – which can be as much as £28,000 tax-free per annum – was similar to a university grant and therefore its athletes were not afforded the same employment rights.

This view was backed by Judge Ross on Wednesday evening. UK Sport said it gave it “confidence that the structure of the relationship between other national governing bodies, their athletes and UK Sport can continue in a  similar way, but we will reflect on the concerns that were raised through this case.”

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A spokesperson for Varnish said: “Jess and her legal team continue to digest the 43-page judgement and will look to offer a statement to media on Thursday.

Varnish claimed that Sutton had told her “to go and have a baby”. An investigation by UK Sport analysing bullying claims at BC cleared the Australian of that comment, but did find him guilty of using sexist rhetoric against Varnish.

BC reiterated that it would welcome Varnish back to its Manchester base. She won nine medals across World and European Championships and the Commonwealth Games from 2010 to 2014. She also rode the 2012 London Olympics team discipline alongside Victoria Pendleton. The duo broke the world record in the qualifying stages but were relegated in the semi-finals.

In a statement, BC said: “The decision to contest this case was founded on what we believe is the best interests of riders who represent Great Britain, and our conviction that our relationship with them is not one of employer-employee but that of a service provider supporting talented and dedicated athletes to achieve their best.

“We very much regret that Jess was advised to pursue the route of an employment tribunal when we had made significant efforts to reach a resolution which all parties regarded as equitable.”

What does the ruling mean?

Varnish had tried to prove that she was an employee of BC and UK Sport, alleging emails from coaches saying that if riders “don’t sign this, you won’t get paid this month.”  She also claimed that aged 15 coaches listened through bedroom doors in hotels on training camps.

Dr Richard Freeman, a former doctor, provided a written statement to the tribunal saying: “The coach would decide everything. The athletes were very firmly controlled. Non-compliance was not acceptable.”

Liam Phillips, a former BMX rider for Great Britain, and her agent James Harper also backed her. But the tribunal didn’t agree with her assertions, which will be a huge relief for UK Sport. 

BC and UK Sport both insist that changes have been made in relation to athlete welfare, largely due to the concerns expressed by Varnish and others. Had Varnish’s claim that she was an employee been backed, around 1,100 elite athletes who are funded by UK Sport would have been entitled to employment rights and a pension.

Such a huge outlay of money would have meant less athletes would have been funded towards Olympics success, which would have affected the number of riders who call the National Cycling Centre in Manchester their home. 

Lawyer Joe McMorrow of Pinsent Masons, who advised UK Sport, said: “This case marks a crucial moment for athletes and the entire sports industry safeguarding funding for athletes for the future. If the tribunal had ruled in favour of the claimant, funding for more than 1,000 could have been called into question.”