PGMOL dispute goes to extra time

PGMOL dispute goes to extra time

HMRC’s dispute with the professional body for English professional football referees has been remitted to the First Tier Tribunal by the Court of Appeal.

This decision was the subject of a long-awaited decision by the Court of Appeal (CoA) handed down in September. Somewhat surprisingly, the court ruled that it could not reach a decision on status. This case has been closely followed by many advisors and engagers, as its focus on mutuality seemed to give renewed clarity for anyone engaging self-employed subcontractors.

Tribunal findings

The First Tier Tribunal (FTT) stated that PGMOL’s training and assessment systems were advisory rather than enforceable, and imposed no right of control. The referees had discretion over their geographical preference, the ‘laws of the game ‘specifically stated that the referee’s decision is final, and there were no sanctions or restrictions for withdrawing from a game once it had been accepted. Referees imposed an obligation on themselves out of their “love of the game”. Overall, the FTT concluded that mutuality of obligations and control was missing from the individual contracts.

The Upper Tribunal (UT) agreed with the FTT that this was no ordinary situation. The referees wanted to make themselves available at football matches, meaning that there was no need for PGMOL to impose an obligation on them. They also agreed that the absence of any obligation on PGMOL to provide work demonstrated that there was a lack of mutual obligations outside of specific engagements.

The UT disagreed with the FTT in terms of control, however. They argued that just because PGMOL were unable to interfere during a match, this did not mean any implicit right of control did not exist. Despite this, they did not conclude that PGMOL did in fact have a right of control, instead agreeing with the FTT’s overall findings.

Court of Appeal findings

The CoA agreed with the FTT that the overarching contract was not one of employment, as it did not require PGMOL to offer work, nor for the referees to accept it. However, it disagreed with the finding that withdrawing before a game begins demonstrates a lack of mutual obligations, arguing that the correct analysis on the possibility of early termination if irrelevant to establishing whether there were mutual obligations or not.

Regarding control, the CoA stated that the FTT had approached the issue the wrong way and did not consider whether the terms of the overarching contract amounted to a sufficient framework of control. Both the FTT and UT erred in law in concluded that coaching and assessment could not be relevant to control, the court ruled, arguing that this gave the PGMOL the opportunity to influence. It also ruled that the FTT had not given sufficient weight to the elements of control, and had instead given decisive weight to considerations that were irrelevant. There were many factors of the relationship which could give rise to PGMOL having a framework of control, the court ruled.

What’s next?

The CoA has remitted the case back the FTT to reconsider, deciding that, as an appellate court, it is not the most appropriate body to assess the case, and a fact-finding tribunal would be preferable.

The FTT must now hear the case afresh and establish all the relevant facts. The facts surrounding control were not fully examined in the CoA’s opinion, with the ‘laws of the game’ one factor that requires further scrutiny. The possibility of termination before a game was deemed “immaterial” to mutual obligations, so the FTT must establish the facts to identify if mutual obligations did exist. In-business factors such as the opportunity to profit and holding insurances were not discussed thoroughly. The requirement for referees to provide their own equipment was only touched upon, and it was not examined whether winning a share of the “performance or merit pot” constituted a bonus. The £100 token for attending training sessions was not expanded upon, nor whether a monetary incentive could give rise to an obligation.

What can we learn?

While this can be seen as a win for HMRC, they still haven’t scored the winning goal – the question of whether the referees are self-employed remains. The importance of having factual information such as a written contract is paramount in establishing the facts of the relationship, and could help to avoid any ambiguity over the existence of implicit terms.

Click here to learn more about IR35 and how to determine your IR35 status.

Published on
December 6, 2021