The Court of Appeal has recently allowed an appeal from Her Majesty's Revenue and Customs (HMRC) against a decision that there was insufficient mutuality of obligation and control for football referees to be treated as employees for tax purposes.(1)


The referees in question were engaged by Professional Game Match Officials Ltd (PGMOL) to officiate football matches, primarily in Leagues 1 and 2 but also in the English Football League Championship and the Football Association Challenge Cup (FA Cup). The individuals worked mostly part-time, combining refereeing with full-time jobs in other fields. They were offered matches through a software programme and could accept or reject them.

PGMOL brought a claim in the first-tier tribunal (FTT) against a determination by HMRC that the referees were employees, which meant that PGMOL would have had to deduct income tax and employer's National Insurance contributions from payments it made to them.

For the purposes of tax legislation, there are two employment statuses: employee and self-employed. The third, intermediate status of "worker", which applies for the purposes of many employment rights, does not exist in tax law. The tests for determining who is an "employee" are essentially the same in both the tax and employment context.

When determining employment status, courts and tribunals take a multi-factorial approach and consider how the relationship works in practice, rather than being bound by what the contract states. Under the main test, which dates from the 1960s (Ready Mixed Concrete v Minister of Pensions), someone is an employee if:

  • there is mutuality of obligation;
  • they have an obligation of personal service;
  • the putative employer exercises sufficient control over them; and
  • other factors point to employment status.

Two of these factors, mutuality of obligation and control, were the focus of the present case.

The FTT said that the referees had both an "overarching" contract with PGMOL, which existed between matches, and individual, specific contracts that existed when the referees accepted a match. Having considered these separately, the FTT concluded that there was insufficient mutuality of obligation and control for either of the contracts to be contracts of employment.

The upper tribunal (UT) subsequently agreed with the FTT on the absence of mutuality of obligation but disagreed with the findings on control. However, given that there was insufficient mutuality of obligation for there to be an employment contract, the UT did not overturn the FTT's overall decision that referees were not employees. HMRC then appealed to the Court of Appeal.


The Court of Appeal remitted the case to the FTT for a final decision on the referees' status, but it ruled that both the FTT and the UT had been wrong in their approaches to mutuality of obligation and control.

The Court of Appeal accepted that persons engaged to do work personally on an ad hoc, casual basis could have an overarching contract and/or a contract that exists for each individual assignment (in this case, a match). The question of whether there was a contract of employment was distinct to each contract. This meant there could be an employment contract at the individual assignment level, even if the overarching contractual arrangement was not one of employment.

Mutuality of obligation
The Court of Appeal considered that there was no overarching contract of employment that would apply to periods when the referees were not officiating because there was an insufficient mutuality of obligation. This was essentially because PGMOL was not required to offer any work and the referees were not required to accept any work offered.

In contrast, in relation to the individual, per-assignment contracts, the Court of Appeal held that even though either party could cancel the contract or the referee could refuse to work at any time before performance was due, this did not negate the existence of a mutuality of obligation. It did not matter that a referee could pull out before an accepted game, there had nonetheless been a contract, involving mutual obligations, which had then been terminated.

The work being performed by the referees was highly specialised. The Court of Appeal compared the nature of the role to ones which, while the work is being performed, are highly autonomous and where the purported employer has a limited ability to influence the duties or intervene. As such, the referees were akin to surgeons, chefs, footballers and live broadcasters.

Outside of the matches that were officiated, there were various levels of control in place:

  • a requirement to sign up and adhere to a code of conduct;
  • match-day procedures;
  • fitness requirements;
  • repeated assessments;
  • performance rating;
  • merit bonuses based on rankings in a table;
  • PGMOL's ability to promote or demote;
  • the use of coaches; and
  • the submission of data to sports scientists.

The Court of Appeal (siding with the UT on this point but for different reasons) decided that the FTT had wrongly concluded that certain aspects of the relationship, including coaching and the assessment system, were irrelevant to the question of control. The FTT had given decisive weight to PGMOL's inability to step in during the match that the referee was officiating, a factor which the Court of Appeal regarded as an irrelevant consideration.

The Court of Appeal also ruled that, for there to be control, there is no requirement for an employer's directions to "be enforceable in the sense that there is an effective sanction for their breach". Rather, the Court of Appeal said that "control may be exerted by positive, as well as by negative, means".

The key consideration was whether there was a "sufficient framework of control". Even when looking at individual assignment contracts, account could be taken of the terms of any overarching contract as part of the framework of that relationship. The factors listed above indicated to the Court of Appeal that there was a sufficient framework of control for an employment relationship to exist in this case.


This is the latest in a long line of cases that show that, when making employment status determinations, the tendency for the courts and tribunals is to limit the significance of mutuality of obligation in the overall test.

The approach taken by the Court of Appeal creates potential difficulties for anyone engaging individuals on a casual or ad hoc basis, who might previously have taken the view that they could legitimately be classified as self-employed on account of the overall nature of the engagement. The Court of Appeal's judgment means that such individuals could now be deemed as employees (and therefore should be taxed accordingly) in relation to each individual assignment, regardless of how ad hoc or sporadic the underlying arrangements may be.

This is the case irrespective of the fact that the individual (or putative employer) can cancel the assignment or decide not to go ahead with it at any time up to performance. The Court of Appeal considered that the fact that a company is not required to offer work and an individual not required to accept it was not sufficient.

This low bar may mean that casual arrangements are more easily fitted into the "employment" box in the future, making questions of control and personal service more important. It may only be possible to confidently conclude that an individual is not an employee if:

  • they have an unfettered right of substitution or delegation; or
  • they are not subject to any checks or guidelines in order to carry out their work.

The findings on control in this case are significant for those engaging highly skilled individuals to provide services in scenarios where they are being hired precisely for their skills – for example, IT or technology consultants. When engaging such individuals, their personal service is often required (another hallmark of an employment relationship).

The Court of Appeal's judgment makes it clear that purported employers cannot rely on their inability to "interfere" while those individuals are working, or dictate "how" the work is done, if the broader framework of the relationship involves sufficient control. This will mean greater scrutiny and reliance on other factors, such as the level of integration and how much control the engager otherwise has over the individual. For example, an individual's days and hours of work, any behavioural regulations or codes of practice, purported performance management and disciplinaries, and the level of financial risk and independence could potentially be cited to show that they are genuinely self-employed.

For further information on this topic please contact Colin Leckey or Emily Atkinson at Lewis Silkin by telephone (+44 20 7074 8000‚Äč) or email ([email protected] or [email protected]). The Lewis Silkin website can be accessed at www.lewissilkin.com.


(1) Further information is available here.