Courts use a number of tests when deciding the employment status of an individual, including mutuality of obligation and the degree of control that the employer has over them. In Commissioners for Her Majesty’s Revenue and Customs (HMRC) v Professional Game Match Officials Ltd, the Upper Tax Tribunal held that part-time football referees were not employees. 

Basic facts

Having determined that football referees were the employees of a company called Professional Game Match Officials Limited (PGMOL), HMRC presented it with a bill for tax, deductible under PAYE, to account for fees and expenses that it had paid to the referees.

PGMOL argued that, although it employed some referees on full-time written contracts mainly in the Premier League, it was not the employer of the part-time referees to whom the tax bill purported to apply. By contrast, these referees (referred to as National Group referees) undertook refereeing duties in their spare time, typically alongside other full-time employment, at matches primarily in lower leagues.

Decision of First Tier Tribunal (FTT)

The FTT concluded that there was both an overarching annual contract between PGMOL and each of the three National Group referees as well as a series of separate contracts between the parties in relation to each specific match for which that referee was engaged.

In order to decide whether any of these constituted a contract of employment, the FTT applied the test set out in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance. Basically, this states that there is a contract of employment if there is mutuality of obligation (when the employer has to offer work and the employee has to accept it) and an element of control by the employer over the employee. As neither of these requirements were present in this case, the FTT concluded that the part-time referees were not employees. 

Decision of Upper Tribunal (UT)

With regard to the argument about mutuality of obligation the UT agreed with the FTT, not least because the PGMOL could revoke a match appointment and the referee could withdraw at any point before the scheduled match. For instance, they might withdraw if they decided that their other work commitments were more pressing. This, said the UT, was a right that was “qualitatively different” to that of “a typical employee.”

Indeed, the only contractual restriction on the referee’s right to withdraw from an appointment was an obligation on them to notify PGMOL that they were no longer available. In any event, the UT held that there was no need for a legal obligation between the parties as the referees were highly motivated individuals who wanted to make themselves available as much as possible.

As far as the second element of control was concerned, the UT held that the FTT had placed too much weight on the PGMOL’s lack of control over referees in the sense that it could not step in during individual matches. Although it was essential for the employer to have some control, this did not mean that they had to have day-to-day control over the employee, but rather that they had “ultimate authority” of the person in terms of the performance of their work. However, given its conclusion in relation to the lack of mutuality of obligation, it was not necessary to remit the case to the FTT or to undertake this job itself.

It therefore dismissed HMRC’s appeal.