UPDATE: THE FTT HAS NOW JUDGED THIS CASE AND CONCLUDED THAT THE INDIVIDUAL ENGAGEMENTS WERE NOT CONTRACTS OF EMPLOYMENT – SEE THE CLARITAX NEWS STORY.
In HMRC v Professional Game Match Officials Ltd [2024] UKSC 29, the Supreme Court has affirmed the Court of Appeal’s earlier judgment that, whilst there was no overarching mutuality of obligation (MOO) between Professional Game Match Officials Ltd (PGMOL) and the part-time football referees it contracted with, in the individual contracts there was MOO and a degree of control, meaning that it was possible that the contracts might be contracts of employment. Having established this, the Court of Appeal had judged that the case should be returned to the FTT to determine whether there was “sufficient mutuality of obligation and control in the individual contracts for those contracts to be contracts of employment”. The Supreme Court concurred with this and the case was remitted back to the FTT.
“The underlying issue in this litigation is whether part-time football referees were employees of the appellant company. The issues raised by this appeal concern two critical elements in determining whether a contract of employment exists. First, the mutual obligations involved in the provision of services personally by the putative employee and the obligation of the putative employer to pay remuneration for those services. Second, the requirement for a sufficient degree of control by the putative employer over the provision by the putative employee of his or her services. These elements, and the issues before the Court, can be understood only in the broader context of the correct approach to deciding whether an employment relationship exists.”
“The overall issue in the case is whether the contracts formed each time that an offer of a match appointment was accepted by a referee were contracts of employment, although as stated above this appeal is confined to the issues of mutuality of obligation and control.”
While MOO and control represent “an irreducible minimum” that must be present for a contact to be one of employment “It is not the case that once the pre-conditions of mutuality of obligation and control are satisfied, they drop out of the picture as relevant factors in the overall assessment of whether a contract of employment exists”. The nature of the MOO and the degree of control must then be considered as part of the overall consideration as to whether the provisions of the contract are consistent with it being a contract of employment.
“In my judgment, it is clear that the individual engagements of referees to officiate at matches satisfied the test of mutuality of obligation, which is a necessary but not sufficient condition to the existence of a contract of employment, and that the Court of Appeal was correct so to hold.”
“In my view, the Court of Appeal was correct to say that the combination of contractual obligations imposed on referees as to their conduct generally during an engagement from the time that a match was accepted to the submission of the match report, and as to their conduct during a match, was capable of giving PGMOL a framework of control sufficient for the purposes of meeting the control test for employment purposes. Unlike the Court of Appeal, I consider that the existence of effective sanctions which it was open to PGMOL to impose after the end of an engagement are of some significance because, on the facts of this case, the right to impose those sanctions played a significant part in enabling PGMOL to exercise control over the referees in the performance of their duties, on and off the pitch. I am not downplaying the significance of the fact that the referees’ obligations were contractual and enforceable as such, but I think the UT was right in this case to attach some significance to those sanctions.“
“In my view, the position as regards both mutuality of obligation and control is clear. On both issues, I consider that this Court is able, on the basis of the FTT’s findings of fact and the extensive submissions made by both parties, to conclude for itself that the irreducible minimum of mutuality of obligation and control necessary for a contract of employment between the National Group referees and PGMOL is satisfied in this case in relation to the individual match contracts.”
“… the right course is to remit the case to the FTT for its decision, on the basis of its original findings of fact and applying the guidance as to the correct approach to the issue … It is part of that guidance that the FTT should take into account the nature of the mutual obligations and the degree of control exercisable by PGMOL, as described in this judgment. “
https://www.bailii.org/uk/cases/UKSC/2024/29.html
Related content from Claritax Books
In Employment Status, author David Kirk guides the reader through the maze of apparently contradictory case law on this topic. The book includes coverage of IR35 issues, and also of topics of officers, agency workers, personal services companies and special occupations.
