The employment status of part-time referees was recently considered in the case of Revenue and Customs v Professional Game Match Officials Ltd.
Ultimately, it was held that the referees were independent contractors (self-employed). In this blog we discuss this case and the wider implications it has on some employment engagements.
The part-time referees in this appeal were engaged to officiate at football matches by Professional Game Match Officials Ltd (PGMOL). The matches were primarily in Leagues 1 and 2 of the Football League, but also in the Championship and FA Cup, and by way of “Fourth Official” in the Premier League. The referees undertook these refereeing duties in their spare time, alongside other full-time employment.
PGMOL also employed a number of full-time referees engaged under written contracts of employment, but this case was not concerned with the employment status of those individuals.
The dispute initially arose when HMRC issued assessments for PAYE and national insurance on the grounds that PGMOL was the employer of the part-time referees. PGMOL appealed against this employment status determination to the First-tier tribunal.
The question was whether they would be considered to be employees of the company under contracts of service, or whether they were self-employed and thereby engaged under contracts for services.
In August 2018, the First-tier tribunal decided that the referees were not employed under contracts of service during the periods they officiated.
PGMOL contended that there was no contract at all between it and the referees. The FTT dismissed this argument and held that there was both an overarching contract between PGMOL and each of the referees, and a series of separate contracts between PGMOL and each referee in relation to each individual match they were engaged to officiate. The question was then whether those contracts were contracts of employment (or a contract of service).
The First-tier tribunal considered the legal test for determining whether a contract is one of service or one for services by reference to the case of Ready Mixed Concrete. This case is one of the leading authorities on the employment status test. In the case of Ready Mixed Concrete it was held that, in determining employment status, a detailed assessment is required of the following three elements:
In the PGMOL case, whilst it held that there were contracts in place, the FTT concluded that in relation to the separate contracts for each match there was not sufficient mutuality of obligation and control to render them contracts of employment. Further, it held that, as there was no mutuality of obligation outside the individual engagements, the overarching contract was not a contract of employment. This involved a balancing exercise and the weighing up of various factors. On the one hand, there was no sanction for referees if they were unable to officiate a particular match, and it did not amount to a breach of contract if they withdrew from a particular appointment. Further, PGMOL could themselves cancel a particular match appointment and replace the referee with another person. On the other hand, this was countered with the fact that the referee did not have the right to appoint substitute.
In relation to control, the FTT held that PGMOL could not direct referees where to go or when to get there, or what task to perform when they did. The referee was found to be the “person in charge” on match day. Whilst referees were subject to FA and competition rules, the FTT placed weight on the fact that PGMOL could not “step in” and give instructions to referees whilst they were officiating at a particular match.
Therefore, after considering all the relevant factors, the FTT decided in favour of HMRC.
PGMOL appealed against the decision.
On 6 May 2020, the Upper-tier tribunal released their decision on Revenue and Customs v Professional Game Match Officials Ltd. The UTT agreed with the FTT on the issue of mutuality of obligation. It too placed weight on the fact that either the referees or PGMOL could cancel an engagement without it constituting a breach of contract.
However, it did feel that the FTT had placed too much weight on the lack of PGMOL’s ability to “step in”, as there can be many circumstances where an employer does not have this ability during the performance of the employee’s obligations yet still has sufficient control for the purposes of an employment contract. Whilst this was a criticism of the FTT’s reasoning, because the finding of a lack of mutuality of obligation had decided the employment status question it was not necessary to engage in a further discussion around control.
Employment status cases are very fact specific. However, this case is a useful reminder of the tests to be applied, and how these might be applied to particular facts.
For individuals who are engaged on a casual basis to work on individual days or at individual events, two questions have to be asked. Firstly, it is necessary to determine the employment status in respect of each individual assignment. Then it is necessary to determine whether there is an overarching contract between assignments to form a so called “umbrella contract”. Whether there is an ‘umbrella’ contract is often important, as if each individual assignment only constitutes an employment relationship this employment relationship will not, generally, last long enough for the individual to accrue employment rights such as the right to claim unfair dismissal.
Mutuality of obligation is significant in determining whether there is a contract in existence at all. This is relevant to both whether there is a contract for individual assignments, and also whether there is an overarching, or umbrella, contract. Control and personal service then become significant in determining whether, if there is a contract in place, it can be classified as a contract of service (or contract of employment).
In this case, the UTT noted that a practical limitation on the ability to interfere in the real time performance of a task carried out by a specialist, be that a surgeon, chef, footballer, or live broadcaster, does not in itself highlight a lack of sufficient control meaning that there can’t be an employment relationship.
If you would like further advice in relation to employment status, please contact a member of the Employment team.
This blog was co-written by Adam Wheal, trainee solicitor and Clive Dobbin, partner.