The employment status of referees might not immediately strike one as the most exciting aspect of the professional game. In fact, the Upper Tribunal (‘UT’) decision in HMRC v Professional Game Match Officials Ltd [2020] UKUT 0147 (TCC) is, we submit, at least as absorbing as some games we’ve sat through. The UT upheld the decision of the First-tier Tribunal (‘FTT’) that the referees in question were not employees.
It’s well established that an employment contract requires three elements to be present, namely:
- ‘Mutuality of obligation’
- A sufficient degree of ‘control’ by the putative employer
- The absence of any other features that are inconsistent with an employment contract
Historically, tribunals hearing ‘status’ cases have often focussed mainly on whether the putative employer has a sufficient degree of ‘control’ to render the contract one of service: perhaps this is because ‘control’ is an easier concept to grasp than ‘mutuality of obligation’. But, unusually – and very helpfully – the UT in this case spent a good deal of time analysing the tricky area of ‘mutual obligation’, especially in its application in the context of ‘call-off’ or ‘zero hours’ arrangements.
The case related to referees engaged by Professional Game Match Officials Ltd (‘PGMOL’) to officiate primarily in Leagues 1 and 2 of the Football League. These are ‘National Group’ referees, who undertake refereeing duties in their spare time (as distinct from the ‘Select Group’ referees who are employed under full-time employment contracts to officiate in the Premier League).
Each National Group referee enters into an ‘overarching contract’ with PGMOL at the start of each season. There are various ‘expectations’ under the contract including the need for referees to keep fit, but there is no guarantee that a referee will be offered any appointments to matches, and referees are not obliged to accept any appointments to matches offered to them. Engagements for particular matches are usually offered on the Monday preceding the weekend of the match; but following acceptance of an appointment it is still open to PGMOL to revoke the appointment and to the referee to withdraw, at any point before the scheduled match.
The UT distilled the case law on ‘mutual obligations’ requirement to three propositions:
- The minimum obligation on the employee is to perform at least some work and to do so personally. It is consistent with such an obligation that the employee can in some circumstances refuse to work, without breaching the contract. It is inconsistent with that obligation, however, if the employee can, without breaching the contract, decide never to turn up for work at all.
- The minimum requirement on an employer is an obligation to provide work or, in the alternative, a retainer or some form of consideration (which need not necessarily be pecuniary) in the absence of work. It is insufficient to constitute an employment contract if the only obligation on the employer is to pay for work if and when it is actually done.
- In both cases the obligations must subsist throughout the whole period of the contract.
In some cases, there may be ‘mutual obligations’ in these terms even though the written terms of a contract profess that there are not. The FTT identified “the ‘ordinary’ situation, where an entity whose function is to provide the services of a number of highly qualified individuals from a limited pool of talent on a regular basis for important commercial events would wish to impose a legal commitment on its staff to work. ” Thus, in cases such as Addison Lee and Pimlico Plumbers, mutual obligations in these terms had been found to exist despite the written contractual terms to the contrary. But this was to be contrasted with the present case, where “the referees were highly motivated and wished to make themselves available as much as possible such that there is no need for a legal obligation.”
The ‘overarching contract’ therefore lacked the essential element of mutuality and could not be an employment contract.
As regards the individual contracts made for each specific match, the FTT had found (and had been entitled to find, from the primary facts) that “the only contractual fetter on a referee’s ability to withdraw from an engagement without breach was that he needed to notify PGMOL that he could not officiate at the match.” That alone was sufficient to demonstrate the absence of mutual obligation and to ensure that this was no employment contract (though for good measure the fact that PGMOL had an unfettered right to cancel an appointment was also inconsistent with a contract of employment).
Interestingly, the UT was less supportive of the FTT’s conclusions on ‘control’ (though it did not go so far as to say that its conclusion was wrong). In particular, the fact that PGMOL could not ‘step in’ and take charge of a match (or even substitute the referee at half-time) was not conclusive; “a practical limitation on the ability to interfere in the real-time performance of a task by a specialist, whether that be as a surgeon, a chef, a footballer or a live broadcaster, does not of itself mean that there is not sufficient control to create an employment relationship … 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.”
Good decision. And without having to call upon the VAR either…
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Read our 2021 update on this case here.
