In a case concerning the employment status of part-time football referees, the Supreme Court recently concluded that the relationship between them and the company that provided their services demonstrated both sufficient mutuality of obligation and sufficient control for an employment contract to exist.

The referees were appointed on an annual basis and primarily officiated at Championship and FA Cup matches. They mostly had other full-time jobs and refereed in their spare time. They were able to refuse appointments and, having accepted an appointment, could change their minds before arriving at the ground on match day. The company could also change an appointment after it had been accepted.

HM Revenue and Customs (HMRC) claimed that the referees were employees and their fees were therefore subject to the PAYE scheme. The First-tier Tribunal (FTT) found that there were overarching contracts between the company and the referees, although these stated that there was no obligation to offer or accept work, and further, individual contracts in respect of each appointment. However, it rejected HMRC’s contention that either of these were contracts of employment. The individual contracts did not create a sufficient mutual obligation because either party could cancel the appointment until the referee arrived at the ground. Nor did they give the company sufficient control over the referees.

HMRC’s appeal to the Upper Tribunal (UT) was rejected. While the FTT had erred on the issue of control, the UT did not decide that issue itself or remit it to the FTT, as the conclusion on mutuality of obligation was sufficient to determine that the referees were not employees. HMRC further appealed to the Court of Appeal.

In respect of the individual contracts, the Court of Appeal allowed HMRC’s appeal on the issue of mutuality of obligation and rejected the company’s argument that there was insufficient control. The company appealed that decision to the Supreme Court.

The Court concluded that a mutual obligation arose when a referee accepted an appointment, notwithstanding that it could be cancelled. In determining whether sufficient control existed, the FTT had wrongly relied on the company’s inability to step in during a match. The company had the ability to impose sanctions on referees for breaching match day procedures.

Dismissing the company’s appeal, the Court considered that it was able to conclude, on the evidence, that the levels of mutuality of obligation and control necessary for an employment contract to exist were present. The question of whether, in all the circumstances, the referees were employees was remitted to the FTT for determination on the basis of its original findings of fact.