Booking referees: Supreme Court rules on employment status of part-time football officials

Author: Robert Oldham, 12KBW

Intro

The case concerned the employment status of part-time football referees who officiated professional football matches in the English Football League.

The Supreme Court held that the requirements of ‘mutuality of obligation’ and ‘control’ were fulfilled in the case of referees working on individual contracts that arose for each football match officiated.

The Facts

The Professional Game Match Officials Ltd (PGMOL), the appellant company, provided referees and other match officials for Football Association matches at ‘National Group’ level games – mostly Championship or FA Cup matches. Officials for National Group games were paid, but refereed in their spare time, usually alongside other employment.

The appeal concerned the employment status of referees in the National Group in the tax years 2014-2015 and 2015-2016. During this time, the system in the National Group was as follows:

• Referees were appointed to the Group annually, having passed a fitness test and attended an introductory seminar.
• Match appointments were offered to referees via an online system, usually at the beginning of the week of the game.
• A referee could reject a proposed appointment, but the PGMOL would typically want to know why.
• When a referee accepted a proposal, a contract was formed for the purposes of officiating and reporting upon that particular match.
• Having accepted a match, a referee could renege before match day, but usually only due to injury, illness, or other work commitments.
• HMRC contended that these were contracts of employment, meaning that PGMOL should have deducted income tax and NI contributions from its payments to the referees.

The route to the Supreme Court

• At first instance, the First-tier Tribunal considered both the overarching contract between the referees and PGMOL, as well as the individual contracts for each match, and concluded that neither carried sufficient mutuality of obligation or control to constitute contracts of employment.
• HMRC appealed to the Upper Tribunal, which disagreed with the court below regarding control, but agreed that there was insufficient mutuality of obligation, and therefore also concluded that there were no contracts of employment.
• HMRC appealed again, this time to the Court of Appeal, which sided with HMRC and disagreed with both tribunals below. The Court of Appeal found that the individual match contracts possessed sufficient mutuality of obligation and control for there to be an employment relationship.
• PGMOL appealed to the Supreme Court, contending that there was not sufficient mutuality of obligation or control for these to constitute contracts of employment.

The Supreme Court’s Judgment

The Supreme Court dismissed the appeal, finding that there was sufficient mutuality of obligation and control as related to the individual match contracts.

Mutuality of Obligation

A distinction had to be drawn between overarching contracts (covering continuous employment) and individual contracts (covering individual engagements, as in this case). In this instance, there was no requirement for mutual obligations to predate or arise between matches. Instead, as there was a ‘work-wage bargain’ for each match, there was sufficient mutuality of obligation covering the period from acceptance of the specific match, the match itself, continuing to the submission of the referee’s match report. It did not matter that both parties had the right to cancel – mutuality of obligation was still met. However, the ability to cancel might be a factor to be considered under the third limb of the test – namely the overall circumstances of the engagement.

Control

The Supreme Court noted that the question of control would require an assessment of the facts of each case. It was not necessary for an employer to have the ability to interfere with every aspect of an employee’s performance of his or her duties. By way of analogy, a hospital manager cannot direct a surgeon during surgery, but there is still sufficient control for the purposes of the test.

Therefore, it did not matter that the PGMOL could not interfere with the refereeing of an individual match. What mattered was that an overall framework of control existed as regarded each individual contract. For each individual contract, control was present by virtue of the overarching supervision of the PGMOL. This included a fitness protocol, match day procedures document, code of conduct, coaching, assessment, and possible sanctions.

Conclusion

The Supreme Court found that mutuality of obligation and control were present. However, the Court noted that this was not sufficient to rule that a contract of employment did exist. The authorities were clear that the next stage was to consider the contract in light of all the relevant circumstances. As such, the case was remitted to the FTT to continue the application of the test. Given the success HMRC had on the first two factors, they would appear to be in a strong position for the third.

Comment – Implications of the Decision 

This case provides significant interpretation and clarification of the principles of mutuality of obligation and control as relates to individual working engagements. This is of primary relevance to workers, whether those be in sports, as in this case, or in the ever-growing gig economy.

The Court took a broad view of mutuality of obligation, appearing to make this a somewhat easier threshold to meet, and preferring to use the more intuitive and simple terminology of a ‘work-wage bargain’. There is no requirement for mutuality of obligation to predate individual engagements, nor for it to exist between those engagements. However, this would be relevant to the separate question of whether an individual was an ‘employee’ or a ‘worker’.

As to control, this case confirms that this will be very fact specific. The Court restated the importance of ‘control’ being rooted in contractual right of the employer to intervene, rather than the practical ability for them to do so. This is particularly relevant to specialist occupations, where they may be no practical ability for the employer to interfere in the performance of working duties. Nevertheless, if there is a sufficient contractual framework, control will likely be found.

While these findings do interpret the two factors in such a way as to make finding a contract of employment more likely, the Supreme Court was careful to warn that these factors are merely two pre-conditions for a contract of employment. The next step was to analyse all the contract in relationship in light of all relevant circumstances. The nature and degree of control and mutuality of obligation can be considered under this third part of the test, even if they have been found to be sufficient for the purposes of the first two pre-conditions.

Therefore, while more claims may now pass the ‘mutuality of obligation’ and ‘control’ limbs of the Ready Mixed test, the Supreme Court’s emphasis on the importance of the third stage means that many disputes will turn on a reading of the overall circumstances of the work in question.