Professional football referee Supreme Court Case: Case study
Case details
Looking at the full picture & an analysis of key elements for determining employment status: Football referee Supreme Court case – Commissioners for His Majesty’s Revenue and Customs v Professional Game Match Officials Limited.
Case overview & Appeal
The Supreme Court has considered the application of the authorities for determining employee status in relation to football referees who officiate matches for the Premier League and Football League. In headline summary, the referees were provided by the appellant Professional Game Match Officials Limited (PGMOL) and the appeal considered whether or not income tax and National Insurance contributions should be applied to the referees’ payments. To recap, for the purposes of determining taxation, the law identifies either those who are employed or self-employed. However, when determining individual statutory rights (such as unfair dismissal rights, or paid annual leave) the employment legislation also provides the middle ground tier of “worker” status, with statutory rights beyond a self-employed independent contractor, but short of full employee status rights and entitlements.
The professional referees
The PGMOL referees enjoyed broad autonomy as to whether to accept or refuse match appointments that were offered to them, and once they had accepted the match appointment (via PGMOL’s software platform) they could later change plans and decline the match. There were two groups of referees – the ‘Select Group’ employed under contracts of employment, and the ‘National Group’ who worked part-time alongside other roles. The part-time referees were nonetheless officiating matches at an elite level, with a high level of physical fitness and experience required, and under the governance of their referee licence with the Football Association. If a referee accepted a match appointment, they would officiate the match fixture and were obliged to submit a match report in return for their fee.
The key authority of Ready Mixed Concrete (South East) Limited v Minister of Pensions and National insurance [1968] 2 QB 497 sets out the elements of an employment contract – if 3 conditions are fulfilled: “(i) the servant agrees that in consideration of a wage or remuneration, he will provide his own work and skill in the performance of some service for his master (‘mutuality of obligation’), (ii) he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master (‘the control test’), and (iii) the other provisions of the contract are consistent with it being a contract of service.”
In the PGMOL case, the Supreme Court had to consider the first two aspects of employment status on appeal: whether there was ‘mutuality of obligation’, and whether there was sufficient control over the referees. The Supreme Court held that the referees’ individual engagement for each match did satisfy the threshold for mutuality of obligation, and further that the contractual obligations imposed on the referees by PGMOL viewed as a whole demonstrated that PGMOL exercised sufficient control over the referees – so as to indicate employment status. The case will now be remitted to the First Tier Tribunal to consider the final important elements of determining employment status (beyond mutuality of obligation, and control), to determine whether the individual match contracts should be characterised as contracts of employment. The Supreme Court emphasised that the First Tier would need to take into account all of the relevant terms in light of the surrounding circumstances, now that mutuality of obligation and control had been found.
The PGMOL judgment provides a detailed analysis of the tests to consider when determining employment status, and an analysis of applying these principles in practice, especially as the working environment has evolved so much – this has been accelerated even more by the pandemic. Lord Richards highlighted that employers should not lose sight of the fact that mutuality of obligation (an obligation to perform work duties in return for payment) can arise when work is being done, regardless of there being no mutuality of obligation in between assignments/or short-term work tasks. Lord Richards also provided guidance for considering whether there was sufficient control exercised over the individual so as to point towards an employment relationship. He cautioned against an overly narrow approach, and highlighted, with illustrative examples, highly skilled roles where there would be limited or no intervention in the performance of a task, but nonetheless the individual could still be determined to be an employee.
In the PGMOL case it is of course a key element of the role as a referee that they are put in a position of institutional independence under the FA rules, and that each referee makes the calls on the pitch and when preparing the match report afterwards. Lord Richards emphasised that many skilled roles will be performed with no intervention or direction by the employer however sufficient contractual control can still be found to indicate employment status – he highlighted that a hospital manager would not be entitled to intervene in the performance of an operation by a surgeon, a circus master could not interfere with the specialist technique of an acrobat, nor an opera house manager interfere with the tempo of a conductor’s performance. The key point is whether there is sufficient control based on the terms of the contract – it does not follow that an employer must have a contractual right to intervene in every aspect of the performance by an employee of their duties.
Employment status audit – look at the picture as a whole
Correctly determining employment status is very important for employers to ensure they correctly account for individual’s statutory rights and the correct tax and national insurance classification. The label that the parties apply to the relationship (for example if an individual’s contract states that they are a casual worker, or alternatively a self-employed consultant) is not definitive, and the Courts and Tribunals will look at what happens in practice to determine whether an individual should be determined to be an employee, worker, or self-employed in business on their own account. If an employee, the individual will benefit from statutory unfair dismissal protection with two years continuous service, and this is proposed to soon be a day one right by the new labour government – with its commitment to implementing these changes imminently.
Employers should look at the picture as a whole and consider all of the wider factors that may indicate employment (alongside mutuality of obligation and the degree of control), such as who carries the financial risk and reward of the relationship, can they provide a substitute to perform the services (and do they in practice), are they integrated into an organisation akin to another employee (e.g. subject to employment policies and held out in the same way as an employee/treated in the same manner) do they provide their own equipment, insurance, and are they responsible for fixing any defective work at their own costs, etc. The Courts have emphasised that there is not an exhaustive checklist for each aspect, and the picture as a whole must be considered – the more factors that indicate employment that pin that picture on the wall, the more likely the threshold will be hit to trigger employment status rights and obligations.
We will keep you updated on the final whistle and the First Tier Tribunal’s decision on PGMOL, and please do not hesitate to contact the team if you need fact specific guidance on assessing employment status.
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