Employers will be aware how important it is to make sure you have got the employment status of workers right. But how do you know for sure?
It’s hard. Just how hard, was evidenced by a case at the Supreme Court brought by Professional Game Match Officials Ltd (PGMOL), a company providing referees for top football fixtures.
With no statutory definition of ‘employment’, case law is all-important, and the question ultimately to be decided here is whether the relationship between PGMOL and the referees is an employment relationship. At stake is the question of whether PGMOL is responsible for Income Tax and National Insurance on match fees paid to referees.
Determining factors
Case law has suggested a contract of employment is indicated by a three-stage test:
- mutuality of obligation: broadly speaking, this means the hirer is obliged to offer work; and in return for payment, the worker is obliged to accept it, and carry it out in person
- the worker is subject to control
- other factors present are also consistent with a contract of employment.
In practice, the tests are difficult to apply. Here, referees were appointed to a ‘National Group’ on an annual basis. Referees in the group were offered work via a software system, with weekend games usually offered the Monday before. They were free to turn work down, though they might have to explain why, and they could back out of a game before arriving on match day. PGMOL was also free to make changes after a match was accepted. Accepting a match created an individual contract for that match.
How it played out
The Supreme Court remit was confined to mutuality of obligation and control, and only as regards contracts for individual matches, not the season as a whole. The Court found that ‘the minimum requirements of mutuality of obligation and control necessary for a contract of employment were satisfied’ – at least for the aspects of the relationship it was tasked to consider. The verdict, however, set the bar lower than many had expected. As regards control, for instance, it said ‘sufficient control consistent with an employment relationship may take many forms and is not confined to the right to give direct instructions’.
It’s not the end of this particular story, as decisions on other aspects still have to be made. But it will be important to keep this case in view when making employment status decisions.
* Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
Business Newsletter 2025
