The Employment Status of Referees
The Professional Game Match Officials Limited (PGMOL) and more specifically, Howard Webb (PGMOL’s Chief Refereeing Officer) are used to being at the centre of media attention, due to the controversies surrounding VAR. This week, PGMOL’s media attention has soared not only due to VAR, but also the employment status of its referees.
On 16 September 2024, the Supreme Court gave its anticipated Judgment regarding the employment status of referees who had been engaged by the PGMOL.
Employment status has and continues to be a widely discussed topic within the UK employment industry due to the different employment law and tax implications that come with an individual’s employment status.
In some circumstances, it can be extremely difficult to identify the employment status of an individual who is working for you.
Before we dive into the details of the Supreme Court case, let’s take a look at the different types of employment status:
- Employee – An employee has more employment rights than workers or self-employed people.
- Worker – A worker has limited employment rights.
- Self-Employed – An individual who is self-employed has no statutory employment rights.
The Supreme Court Ruling – What Happened?
PGMOL is the body which provides referees for professional football matches within England, including the Premier League. They engage 2 sets of referees:
- Those who are employed on a full-time basis under written contracts of employment; and
- Those who referee in their spare time and/or alongside other full-time employment.
This case concerned the second group of referees i.e. those who referee in their spare time and/or alongside other full-time employment. These referees are offered match appointments through an online software and have the option to accept or refuse an appointment. If accepted, both the referee and PGMOL still have the option to back out before the match commences.
PGMOL has its own disciplinary procedure; if the referee breaches a match day procedure, PGMOL has the ability to take disciplinary action against the referee.
For tax purposes, HMRC considered the referees to be employees, rather than self-employed. This would mean PGMOL would need to deduct tax and NI contributions from payments made to the referee.
PGMOL disagreed and brought a claim in the First-Tier Tribunal, arguing that the referees were self-employed. After several appeals, the case was heard by the Supreme Court.
Back to Basics
In making its decision, the Supreme Court went back to the basics, emphasising the test set out in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance 1968. In this case, the court held that for a contract of employment to exist, there must be:
- Mutuality of obligation; and
- Sufficient degree of control by the employer.
Mutuality of obligation
An essential element of an employment contract is that there is mutuality of obligation. Essentially, the employee must provide a personal service in return for payment by the employer.
The court held that a sufficient mutuality of obligation existed between the referee and PGMOL in the period from acceptance of the match and ending when the referee produced their match report.
The fact that either party was able to cancel the contract before the referee arrived at the grounds did not matter.
Control
In order for a contract of employment to exist, the employer must also have a sufficient degree of control over the employee.
The Supreme Court held that PGMOL had sufficient control over the referees. The fact that the referees were subject to contractual obligations regarding their conduct and PGMOL had the ability to impose sanctions on the referee if they did not comply with these, gave rise to a sufficient degree of control consistent with an employment relationship.
The case has now been remitted back to the First-tier Tribunal to reconsider the employment status of the referees in light of the Supreme Court’s findings regarding mutuality and control.
The Wider Implications For Employers
It’s extremely important for employers to establish the status of an individual from the outset of their employment. As set out above, an individual’s employment status can determine what employment rights they are entitled to and tax implications.
Currently, self-employed workers do not have any statutory employment rights. On the flip side, employees are afforded a wealth of statutory employment rights including the right not to be unfairly dismissed after 2 years continuous employment, statutory sick pay and redundancy pay, to name a few.
The Supreme Court case suggests that the bar for a ‘sufficient degree of control’ required to establish a contract of employment is a lower than previously suggested. This could result in a greater number of individual engagements constituting an employment relationship, affording greater employment rights to the individual. Employers should be alive to this when it comes to engaging individuals on a self-employed basis, and the risks of creating an employee/employer relationship where the employer is exercising a degree of control.
How can Ellis Jones Help?
Ultimately, it is up to a court or tribunal to decide the employment status; however we are well equipped to be able to provide you with an opinion so that you are fully aware of the risks associated with engaging an employee, worker or self-employed contractor.
If you require assistance in determining the status of an individual working for you or any other employment law or HR matter, please do contact us on 01202 525333 or by email at employment@ellisjones.co.uk, one of our team would be very happy to assist you. We also run a monthly, free HR forum in conjunction with Rubicon People, it is free to join and an invaluable way to stay up to date with changes to employment law and HR. If you would like to attend, please contact employment@ellisjones.co.uk.
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