Case Summary: HMRC v Professional Game Match Officials Ltd [2024] UKSC 29
On 16 September 2024, the Supreme Court ruled on the employment status of part-time referees engaged by Professional Game Match Officials Ltd (PGMOL), a decision with significant implications for tax and National Insurance contributions. The core issues involved determining whether individual match contracts between PGMOL and part-time referees met the common law criteria for employment, particularly concerning mutuality of obligation and control (1).
Background:
PGMOL is the organisation responsible for appointing referees for major English football competitions such as the Premier League and FA Cup. PGMOL's referees fall into two categories: the ‘Select Group’, full-time referees employed under traditional contracts, and the ‘National Group’, part-time referees who officiate matches in their spare time, often alongside other full-time employment. The National Group referees operate on a per-match basis, receiving fees for individual matches without being under a comprehensive employment contract for the season (8-10).
The question before the Court was whether these part-time referees should be classified as employees during individual match engagements, affecting whether PGMOL was required to deduct income tax and National Insurance contributions under the PAYE system (4-6).
Legal Issues:
Two principal legal elements needed to be assessed: mutuality of obligation and control. A contract of employment at common law requires mutual obligations—whereby the employer is obliged to offer work, and the employee is obliged to perform it—and control, meaning the employer exerts sufficient authority over how and when work is performed (1, 23-26).
In this case, PGMOL argued that the part-time referees were not employees because there was no overarching obligation for PGMOL to offer matches, nor for referees to accept them. Further, PGMOL contended that it had limited control over referees during their officiating duties, as referees exercised independent judgment during matches and were subject to Football Association (FA) rules while officiating (12, 62).
Tribunal & Court Decisions:
First-Tier Tribunal (FTT): The FTT ruled that while individual match contracts existed, they did not constitute contracts of employment due to the lack of mutuality of obligation and control. The FTT held that both parties had the right to withdraw from a match agreement before match day, which undermined the notion of an employment relationship (18-19).
Upper Tribunal (UT): The UT upheld the FTT's decision, agreeing that there was insufficient mutuality of obligation to form an employment contract, despite finding that the FTT's reasoning on the issue of control required further analysis (20).
Court of Appeal: The Court of Appeal partially overturned the UT's decision, finding that there was sufficient mutuality of obligation for each individual match contract. The Court of Appeal remitted the case to the FTT to determine whether there was adequate control to classify these contracts as contracts of employment (21).
The Supreme Court Decision:
The Supreme Court addressed both the mutuality of obligation and control in relation to the individual match contracts. On the question of mutuality of obligation, the Court held that once a referee accepted a match appointment, there was sufficient mutual obligation. Referees were required to perform their duties, and PGMOL was obligated to pay them for doing so. While both parties retained the right to withdraw from the contract before the match, this did not negate the mutual obligations that existed once a match was accepted (56).
On the issue of control, the Court acknowledged that PGMOL could not intervene in referees' officiating decisions during matches due to FA rules, which granted referees independence on the field (67). However, the Supreme Court ruled that PGMOL still exercised sufficient control outside of match time. This control included disciplinary procedures, performance assessments, and the potential to withhold future match appointments or reduce merit payments based on a referee’s performance over the season (88). The Court noted that these sanctions were significant levers of control that could influence referees’ conduct and were consistent with an employment relationship.
The Supreme Court concluded that the combination of mutuality of obligation and control during individual match engagements met the common law requirements for a contract of employment. Therefore, National Group referees should be classified as employees for the duration of each match appointment, making their match fees subject to PAYE and National Insurance contributions (57-59).
Conclusion:
This case is a landmark ruling on employment law, particularly for casual or part-time workers. The Supreme Court’s decision clarifies that employment contracts can arise even in situations where work is performed on a task-by-task basis. In the case of PGMOL referees, the existence of mutual obligations during individual matches and the broader framework of control exercised by PGMOL were sufficient to establish an employment relationship for tax purposes (33, 88).
This judgment will likely influence how other industries treat freelance or part-time workers engaged on an assignment basis, particularly where mutuality of obligation and control are contested.
To read this judgment please click here.
And for a fun fact, our very own Nicholas Lakeland, who is not only a qualified FA referee but also holds a Level 1 FA coaching qualification, is certainly well-placed to appreciate the finer details of this case both on and off the field!
