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The Court of Appeal rules that part-time referees working for Professional Game Match Officials Limited (PGMOL) may be employees for tax purposes.

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The Court of Appeal rules that part-time referees working for Professional Game Match Officials Limited (PGMOL) may be employees for tax purposes.

In this case, which has been fought from the First-tier Tax Tribunal to the Court of Appeal, HMRC argued that PGMOL referees (described as self-employed within their contractual documents) are in reality employees under tax legislation.
Whilst not directly related to employment legislation, and despite the fact that tax legislation only recognizes employees and the self-employed without the intermediate status of worker, the principles at play here are the same as that considered throughout employment status case law. Furthermore, given that this is a Court of Appeal decision, it is also likely to be highly persuasive within Employment Tribunals.


The contractual position is one that is likely familiar: part-time referees would be placed within a pool of referees, known as the ‘National List’, and would accept or reject match appointments as they were offered. The relevant code of practice stated that these referees were ‘self-employed’ and that there was no guarantee that appointments would be offered, nor were referees obliged to accept appointments.
Either party had the ability to pull out of a particular engagement before a game took place without either committing a breach of contract or triggering a particular sanction.
In relation to the level of control that PGMOL had over the referees, there were expectations about maintaining fitness levels, PGMOL had its own disciplinary procedures and there were assessments which could result in a referee being promoted or demoted within the National List.

Legal Issues

There are three fundamental elements to a contract of employment: in return for a wage an individual provides their own work (known as ‘mutuality of obligation’), that individual is under the control of the other party and the other terms and conditions are consistent with an employment contract.
In this case there were two contracts considered – an overarching contract governing the periods in which the referees were not working and the status of the contract for each individual assignment.
The lower courts had found that, given there was no obligation to offer and/or accept work and either party could pull out before a game, there was insufficient mutuality of obligation to give rise to an employment contract in respect of either contract. They also ruled that there was no ongoing obligation to provide or accept work and this further undermined employment status – completing work and being paid for it was not enough to establish the required mutuality. This was the case with either the overarching contract or each individual contract created per engagement.

Court of Appeal’s View

The Court of Appeal ruled unanimously that the lower courts’ application of the mutuality requirement was wrong, though it ruled that the lower courts were entitled to find that the overarching contract was not one of employment.
It found that the mutuality required to establish an overarching contract was different to that in relation to individual engagements – these questions were legally distinct. It was an error of law to conclude that individual contracts could not be employment contracts on the basis that it merely provided for a worker to be paid for the work that they did.
The court also ruled that the fact either party could withdraw before a game did not automatically negate mutuality of obligation in respect of each individual engagement. The contract remained in place unless and until it was terminated.
The extent of PGMOL’s control of the referees was also considered by the court, and it made clear that when considering control, an overarching contractual control will suffice rather than a control of a worker’s day-to-day tasks. Therefore, the fact that PGMOL could not interfere with a referee whilst they were conducting a game did not mean that there was insufficient control to potentially give rise to an employment relationship during engagements.
The court therefore sent the case back to the original tax tribunal for them to consider whether there was sufficient mutuality of obligation during each individual engagement to give rise to an employment contract.

Guidance for Associations – what does this mean for me?

This case further highlights the difficulty in attempting to ensure that individuals deemed to be self-employed, but who are at the same time subject to certain controls and rules, always fall outside of employee or worker status.
A different approach to mutuality will be applied when considering the relationship during each individual engagement as opposed to the overarching relationship in place between engagements. This means that it is possible for a ‘casual’ worker to be an employee or worker whilst actually working, but the relationship not to be deemed an employment relationship overall.
It is also worth noting that the Court of Appeal referred to the fact that from the 2017-18 season PGMOL accepted that the ‘casual’ referees were workers, rather than self-employed, under employment legislation. This would have entitled these referees to rights such as sick pay and paid annual leave.
The bottom line is that determining an individual’s employment status is very complex. Many factors are at play. The most important action that you can take is to make sure you have properly considered employment status questions, and that you have taken proper advice on it. Only that way do you put yourself in the best possible position to reduce the likelihood of an employment status challenge later down the track.

Please speak to your dedicated advisor on 01274 864999 to discuss this issue further.

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