The respondent body appoints referees in football at the start of each season with the view that those engaged take on refereeing duties in their spare time and would be paid expenses and fees for each match.  The respondent in turn assessed the referees regarding their competency as well as offering training. The way in which it worked at a granular level was that the referee would be offered a match at the start of each week, and they could accept or reject.  Additionally, the respondent could also cancel a booking. The practical issue in this case is whether the Respondent body, should deduct income tax and employer's National Insurance Contributions from the payments it makes to referees whom it supplies to officiate at football matches.

There was a Code of Practice for the referees which outlined that they were self-employed, and they were not guaranteed any matches.   This went to both the First Tier and Upper Tax Tribunals.   At first instance, it was held that there was an overarching contract but there was insufficient mutuality of obligations for a contract of employment to be found.  The first-tier tribunal also found that there was a lack of control.  The Upper Tribunal upheld the decision vis-à-vis mutuality of obligations but allowed the appeal when it came to issues of control.  However, HMRC appealed this decision to the Court of Appeal.

The Court of Appeal held that the fact that there was no obligation in an overarching contract to offer work was not indicative of whether a single engagement was not a contract of employment.  The nature of each contract that was given was a distinct question that needed to be answered.  It also outlined that the mutuality of obligation criterion was not a sole test for the existence of a contract of employment.  There had to be a more holistic approach in determining whether there was a contract of employment.

In terms of mutuality of obligation, it was held that the first instance Tribunal was right in concluding that the overarching agreement did not constitute a contract of employment.  This was on the basis that there was no requirement for the respondent to offer the work and no requirement for the referees to undertake the work.   However, there needed to be a more in-depth examination of the individual engagements which they had failed to do.  The earlier Tribunals had focused on the fact that the parties could pull out of the individual agreements without breaching it.   However, the Court of Appeal found that there was a subsisting contract at that point with mutual obligations and this would continue until it was terminated by a particular party.

On the question of control, the Court of Appeal stated the Tribunal had misdirected itself.  The Tribunal looked at it from the perspective of whether the respondent could step in when the referee was officiating. This was incorrect.  Instead, it should have been whether the terms of the overarching contract were such that it created a sufficient framework of control.  This meant that the wider system including training and coaching should have been considered.  Accordingly, it was held that the Tribunals had erred when it came to both mutuality of obligations and control.  As a result, the appeal succeeded with the case being remitted back to the First-Tier Tribunal.

Practical Lessons

This case is important from the perspective of how mutuality of obligations and control are examined in determining whether there is a contract of employment.  The fact that the mutuality of obligations has to be considered deeper than just the overarching agreement does make it harder to avoid the contract of employment being recognised.  Further, the aspect of control going wider than just the carrying out of duties into other matters such as adherence to a Code and agreements to abide by other rules (such as fitness rules in this case) also widens the likelihood of a contact being found.  As the case was remitted, it will be interesting to see how the First Tier Tribunal interprets this in light of the evidence and facts before it.
https://www.bailii.org/ew/cases/EWCA/Civ/2021/1370.html