23/09/2024

Judgments from the Supreme Court (SC) are like buses – you wait for one, and then two come along at once. On 16 September 2024, in HMRC v Professional Game Match Officials Ltd (PGMOL) [2024] UKSC 29, the SC delivered a significant judgment on employee status, addressing the question:

“Is the relationship between a company responsible for providing football referees to the Football League and part-time referees an employment relationship, thereby obligating the company to deduct Income Tax and National Insurance from the payments it makes to the referees?”

Background

In the United Kingdom, there are currently three categories of persons for employment rights purposes: employees, workers, and the self-employed. However, for tax purposes, only two categories are recognised: employees and the self-employed. This judgment concerns tax, but its principles can be applied more broadly.

Facts of the Case

The case involved part-time referees for First and Second Division football matches supplied by Professional Game Match Officials Limited (PGMOL). HMRC had classified these referees as employees. This finding was subject to appeals that centered on the classic employee status tests:

1. Mutuality of Obligation: Was there an obligation for the referees to provide personal service and for PGMOL to provide work?
2. Control: Did PGMOL have a sufficient degree of control over the referees?
3. Other Circumstances: Were all other surrounding circumstances and the contract consistent with employment?

Supreme Court’s Judgment

In examining the facts, the SC noted that the referees were:

• Appointed on an annual basis.
• Match appointments for the weekend were usually offered on the Monday.
• Referees could refuse appointments, although they were typically asked for a reason if they cancelled.
• Once accepted, referees could back out before arriving at the match, generally only doing so for illness, injury, or work commitments.
• Similarly, PGMOL could cancel appointments at any time.
• When accepted, a contract was formed to officiate and complete a match report.
• PGMOL would pay the fee.
• There were no sanctions on either party for cancelling.

This case underscores the importance of examining the mutuality of obligations, control, and overall circumstances to ascertain whether an employment relationship exists.

Implications and Future Considerations

This is the latest in a long line of cases focussing on what constitutes an employee. The landmark case of Uber BV and others v Aslam and others UKSC 2019/0029 changed the emphasis. Since then we have seen a willingness from courts and the SC to find employee status, perhaps lowering the threshold required to establish sufficient mutuality of obligations and control. This trend indicates a broader interpretation of employment relationships, potentially offering more protections to individuals previously classified as self-employed or workers.

However, this case may have less significance in the future if proposals to move to only two categories of persons – employees and the self-employed – are accepted. Such a change would simplify the classification process but could also impact the rights and obligations of many individuals currently classified as workers.