There has been an interesting case over whether professional football referees have employment status when simply providing their services as a single assignment in circumstances where those instructing them do not have overall control of their activities.
In case of HMRC v Professional Game Match Officials Ltd [2021] EWCA Civ 1370, First-tier Tribunal (FTT) decided that referees were not employees of Professional Game Match Officials Limited’s (PGMOL) and the Upper Tribunal upheld that conclusion.
HMRC took the matter on appeal to The Court of Appeal who have allowed HMRC’s appeal and have remitted the case back to the (FTT) to consider on the facts whether there was sufficient mutuality of obligation and control in the individual contracts for there to be contracts of employment.
The Court of Appeal was of the conclusion that a single assignment under an overarching contract can be a contract of employment even if there was no obligation to accept those assignments and thus could fall under the tax regime for the purpose of IR35 as deemed employment.
The decision has implications beyond football, as the "control" aspects of employment status could be satisfied by just having guidelines, training protocols and disciplinary procedures as (PGMOL) on the facts could not exactly step on to the pitch in the middle of the game to tell the referee what to decide but could impose sanctions like not offering further engagements or to suspend or remove a referee from the National Group list after the end of the engagement.
The Court of Appeal highlighted at paragraph 138 (see 1 below) “test requires that the putative employer has a contractual right to direct the manner in which the worker is to perform their obligations, and that those directions are enforceable, in the sense that there is an effective sanction for their breach. Provided that the right to give directions relates to the performance of the employee’s obligations during the subsistence of the contract, it is not to be disregarded because there is no ability to step in and give directions during the performance of the obligations (where the nature of the obligations precludes it), or because the sanctions for breach of those obligations could only be imposed once the contract has ended. The existence of an effective sanction (irrespective of when its impact would be felt by the employee) is sufficient to ensure that the employer’s directions constitute enforceable contractual obligations”.
Also, The Court of Appeal addressed the issue related to mutuality of obligations and emphasised at paragraph 119 (see 1 below) that “any suggestion that the criterion of mutuality of obligation is the sole, qualifying test for the existence of a contract of employment, so that if there is some mutuality, but it is not the right kind of mutuality, there can be no contract of employment. On the contrary, those authorities, and the other authorities to which we were referred, suggest that the court has to look at all the circumstances ………. before deciding whether or not there is a contract of employment” thus over relying on the absence of "mutuality of obligation" in determining any assessment of employment status in the context of IR35 and Employment Law would need to be reviewed by organizations facing similar situations.
Please note that this article is for information purposes only and should not be relied upon as being authoritative on the matter however further guidance on the matter can be provided by contacting our HR/legal advice-line on 01455 852028.
(1) https://assets.publishing.service.gov.uk/media/5eb2b7b8d3bf7f5d456fde95/HMRC_v_PGMOL_.pdf
