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You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> Professional Game Match Officials Ltd v Revenue & Customs (PAYE and NIC) [2018] UKFTT 528 (TC) (30 August 2018) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2018/TC06698.html Cite as: [2018] UKFTT B1 (TC), [2018] UKFTT 528 (TC), [2018] STI 1861, [2019] SFTD 74 |
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[2018] UKFTT 528 (TC)
TC06698
Appeal number: TC/2017/01162
PAYE and NIC – regulation
80 determinations and section 8 decisions – whether Level 1 National Group
football referees
have contracts with PGMOL – yes – whether they are employees
of PGMOL – no – whether payments made on behalf of and at expense of PGMOL
within s 687 ITEPA – yes
FIRST-TIER TRIBUNAL
TAX CHAMBER
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PROFESSIONAL GAME MATCH OFFICIALS LIMITED |
Appellant |
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- and - |
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THE COMMISSIONERS FOR HER MAJESTY’S |
Respondents |
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REVENUE & CUSTOMS |
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TRIBUNAL: |
JUDGE SARAH FALK |
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JANET WILKINS |
Sitting in public at the Rolls Building, Fetter Lane, London EC4A 1NL on 18 to 20, 26, 27, 30 and 31 July 2018
Jolyon Maugham QC and Georgia Hicks, instructed by Deloitte LLP, for the Appellant
Akash Nawbatt QC and Sebastian Purnell, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2018
DECISION
1.
This appeal relates to determinations issued under regulation 80
of the Income Tax (Pay as You Earn) Regulations 2003 (“regulation 80
determinations”) in respect of income tax deductible under the Pay As You Earn
(“PAYE”) system, and decisions issued under section 8 of the Social Security
(Transfer of Functions) Act 1999 (“section 8 decisions”) in respect of Class 1
National Insurance Contributions (“NICs”), in relation to the tax years 2014-15
and 2015-16. The determinations and decisions were issued on the basis that the
appellant, Professional Game Match Officials Limited (“PGMOL”), was the
employer of certain football referees
during three football seasons falling
partly or wholly in those tax years, namely the 2013-14, 2014-15 and 2015-16
seasons. The amounts directly at stake in the appeal are income tax of
£172,849.18 and NICs of £123,990.30 in respect of the tax year 2014-15, and income
tax of £162,661.84 and NICs of £124,372.75 in respect of the tax year 2015-16,
a total of £583,874.07 excluding interest.
2.
The principal issue in the appeal is whether the referees
were in
employment relationships with PGMOL. In seeking to establish that they were
not, PGMOL’s case is not simply that the
referees
were self-employed, but also
that there was in fact no contract between it and the
referees
at all. In
addition, it has raised an issue as to whether, even if an employment
relationship is established with PGMOL, the determinations and decisions were
incorrectly issued because (in essence) it did not make the relevant payments.
3. There were two preliminary issues. The first related to the fact that the Tribunal had classified the appeal as complex in May 2017. Mr Maugham explained that PGMOL had intended to opt out of the costs regime under rule 10(1)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the “Tribunal Rules”). However, it had failed to do so within the permitted 28 day period. PGMOL wanted the time limit to be extended to allow a late application. HMRC opposed this, and in the light of that Mr Maugham did not pursue the point.
4. The second issue related to two additional witnesses whom PGMOL wished to call, and in respect of whom witness statements had been served on HMRC on 28 June 2018, relatively shortly before the hearing and well after the deadline set by the case management directions. One of these witnesses, Peter Elsworth, was relatively uncontroversial because his role was to provide witness evidence in place of another witness, Neale Barry, who had been taken ill and was unable to attend. HMRC did not object to the late service of Mr Elsworth’s evidence, and we admitted it.
5. The second additional witness was Ms Pamela Martin. HMRC objected to the admission of Ms Martin’s evidence on the basis that PGMOL wished to adduce it to support what HMRC viewed as new grounds of appeal, relating to whether PGMOL was the contracting party and whether it was not liable on the basis that it did not make the relevant payments, and that the proper approach would have been for PGMOL to make an application to amend its grounds of appeal.
6. After hearing submissions from both parties we agreed to admit the evidence. Following further submissions during the course of the hearing by Mr Nawbatt for HMRC, it was also agreed that Ms Martin would produce a supplementary witness statement covering certain matters omitted from the original, sufficiently in advance of giving evidence for it to be considered by Mr Nawbatt.
7. We agree that the arguments about whether PGMOL was the contracting party, and whether it was not liable because it did not make the relevant payments, were raised for the first time in Mr Maugham’s skeleton argument. However, they had now been raised and, given the factual matrix that the Tribunal would in any event have to consider, they were not in reality points that could simply be ignored by the Tribunal in determining whether the determinations and decisions were correctly made. In the circumstances the best course available was to ensure that the Tribunal had the appropriate evidence before it.
8.
PGMOL is a company limited by guarantee whose three members are
The Football Association Limited (the “FA”), The Football Association Premier
League Limited (“the Premier League”) and The Football League Limited (“the Football
League”), now referred to as the English Football League (“the EFL”). PGMOL is
funded by its members on an annual basis and is intended to be run on a “not
for profit basis”, with any annual surplus being retained as a reserve to cover
unexpected costs or deficits in other years. PGMOL’s role relates to the
provision of referees
and other match officials for matches in the most
significant national football competitions, in particular the Premier League
(the top 20 clubs), the FA Cup, and the EFL, which comprises 72 clubs in the
Championship League and Leagues 1 and 2.
9.
The FA is the governing body for English football, including all
referees
in England. The FA classifies
referees
by
reference
to a number of
different levels, ranging from International, then Level 1 (the National List)
to Level 9 (trainee
referees).
There are over 30,000
referees
in total, the
vast majority at the lower levels. PGMOL’s role relates primarily to
referees
at Level 1 and their appointments to matches, although it has some role in
relation to training and fitness for
referees
at the next level down, Level 2[1]. The FA has the
role of making match appointments for
referees
at Levels 2 to 4 (broadly
corresponding to semi-professional football), and below that
referees
are
appointed to matches by the County FAs and Leagues.
10.
PGMOL employs a number of referees
under full-time written employment
contracts. These are referred to as the “Select Group”
referees,
who at the
relevant time primarily
refereed
Premier League matches[2]. Some of these
individuals are also qualified to
referee
internationally. The
referees
to
which this appeal relates are, like the Select Group, Level 1
referees
in FA
terms, but undertake
refereeing
in their spare time, typically alongside other
full-time employment. During the 2014-15 season there were 60
referees
in this
category. Although there is some variation in terminology we will refer to this
group as the “National Group”
referees.
The appeal relates to payments to these
individuals, mainly in respect of match fees and expenses.
11.
At the relevant time National Group referees
primarily
refereed
matches in Leagues 1 and 2, but also in the Championship League and FA Cup.
They also acted as “Fourth Official” in some matches, including in the Premier
League[3].
Occasionally National Group
referees
might also
referee
matches in the Premier
League, but this was exceptional and related to a few
referees
being considered
for the Select Group.
12.
Whilst secondary to the Premier League, the Championship League
is still a very significant competition in terms of viewing figures, both in
terms of attendance at matches and on TV. Promotion from the Championship
League to the Premier League (or indeed relegation) also has material financial
implications for clubs. The role of a referee
at this level is clearly a
significant one.
13. Section 4(1)(a) of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) provides that “employment” includes “any employment under a contract of service”. Section 2(1)(a) of the Social Security Contributions and Benefits Act 1992 (“SSCBA”) defines an “employed earner” as a person who is “gainfully employed in Great Britain…under a contract of service…with earnings”. Section 122(1) of SSCBA defines “employment” as including “any trade, business, profession, office or vocation and ‘employed’ has a corresponding meaning”. Neither Act provides any further definition of these terms, so recourse must be had to the case law meaning of “employment” and “contract of service”.
14. The classic summary of the conditions required for a contract of service was provided by MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 515:
“(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.”
15. The first condition is generally referred to as mutuality of obligation: some level of obligation to perform work personally and pay remuneration is an “irreducible minimum” of a contract of service: Carmichael v National Power [1999] 1 WLR 2042 at 2047. However, it is possible for a contract of employment to exist only when work is being performed, such that a casual worker may have a series of contracts of employment. This is discussed further below.
16. The second condition, control, is an important indicator but not a straightforward one, particularly when applied to certain professions. A “sufficient framework of control” must exist in the sense of “ultimate authority” (Montgomery v Johnson Underwood [2001] EWCA Civ 318, [2001] ICR 819 at [19]), rather than there necessarily being day-to-day control in practice.
17. The third condition is a negative one. If the first two are satisfied there will be a contract of employment unless other elements of the contract are inconsistent with that prima facie conclusion (Weight Watchers (UK) Limited and others v HMRC [2012] STC 265 at [41] and [42]).
18. Other approaches have been considered by the courts in determining whether an employment relationship exists. These include in particular a test of whether the individual can be regarded as in “business on his own account”, taking account not only of control but also of such factors as whether the individual supplies his own equipment, what degree of financial risk he takes (the ability to make a profit from the way he undertakes the task, and the risk of loss) and whether he already has an established business (Market Investigations Limited v Minister of Social Security [1969] 2 QB 173 at 184 to 185). However, there is no simple check list. Not all details are of equal weight in any given situation. An overall picture must be painted from an accumulation of detail, and then must be viewed by standing back from the detail: see Hall v Lorimer [1994] 1 WLR 209 at 216 where comments of Mummery J to this effect (at [1992] 1 WLR 939, 944) were cited with approval by Nolan LJ in the Court of Appeal. Mummery J also referred to additional potential factors to consider, being the understanding or intentions of the parties, whether the individual has set up a business-like organisation, the degree of continuity with the engager, how many engagements are performed and whether for different people, and whether the individual is accessory to the engager’s organisation or “part and parcel” of it. However, the test of whether someone is in business on their own account may also be of little assistance where the individual carries on a profession or vocation: Hall v Lorimer (CA) at 218, where Nolan LJ suggested that in such a case the extent to which he is dependent or independent of a particular paymaster for the exploitation of his talents may well be significant.
19. Witness statements were produced by 10 witnesses for PGMOL and one, Frances Ritson, for HMRC. We heard oral evidence from five witnesses, Michael Riley, Peter Elsworth, Pamela Martin, Stuart Attwell and Chris Sarginson. The other witnesses for PGMOL were Neale Barry, John Brooks, Sam Purkiss, Harry Phillips and William Finnie. As already mentioned Mr Barry was too unwell to give oral evidence, and the other witnesses were not required to be cross-examined.
20.
Mr Riley has been the Managing Director (previously called the
General Manager) of PGMOL since 2010. He previously had 30 years of experience
of refereeing,
including in the Select Group and at an international level. He
clearly has an in-depth knowledge of the company’s affairs and, as a relatively
small organisation, has had a significant involvement in operational as well as
more strategic matters. Whilst he was clearly mindful of the issues in the case
and this on occasion resulted in some hesitation or qualification of his
answers, we found Mr Riley’s evidence to be clear and his responses to
questions helpful. We had no concerns as to the veracity of his evidence and accept
it as regards matters of fact.
21.
Mr Barry has been the head of refereeing
at the FA since 2005. Like
Mr Riley he had spent about 30 years
refereeing,
including at Premier League
matches, before moving into a management role. During the period in dispute he
was also a member of what was referred to as the Operational Management Team of
PGMOL, alongside Mr Riley and two other individuals employed by PGMOL. Mr
Barry’s witness statement related primarily to the FA, the different levels of
referees,
how
referees
progress through the levels, appointments of
referees
to
matches, training and development of
referees
at different levels by the FA,
and other general matters affecting
referees
such as fitness testing, kit, the
“Laws of the Game”, and FA rules and directives. Mr Elsworth produced a
relatively short witness statement which exhibited a copy of Mr Barry’s witness
statement, marking it up to show some additions and corrections and otherwise
adopting that statement. Mr Elsworth is the Senior
Referee
Manager for the FA
and reports directly to Mr Barry. He does not have a direct role with PGMOL or
Level 1
referees.
However, we accept that, given his role and the fact that he
has been employed by the FA for 13 years, he was in a position to speak to most
of the matters covered by Mr Barry’s statement. We accept Mr Elsworth’s
evidence, and the marked-up statement from Mr Barry, as to matters of fact.
22. Ms Martin is the Business Director of PGMOL, responsible among other things for administration and finance at PGMOL. She is a qualified chartered accountant. Ms Martin joined the company in September 2016, after the period covered by the appeal. As already indicated Ms Martin produced two witness statements, the second of which was produced during the course of the hearing. As well as expanding on certain areas the second statement corrected errors in the first statement.
23. Ms Martin accepted in oral evidence that she now appreciated that her initial evidence was insufficiently detailed, and that in producing both statements she had had to rely to a significant extent on conversations with individuals in her team at PGMOL, together with staff in the finance functions at the Premier League and the EFL. This was in part because she was not employed by PGMOL at the time, but also because the details covered were complex and convoluted, and lacked clear documentation. She had also relied on conversations with Mr Riley and with Javed Khan. During the period in dispute Mr Khan was the Finance Director of the Premier League and was described as the CFO in PGMOL’s accounts, although he was not on the PGMOL Board. He has since retired from the Premier League and his successor as Finance Director holds a similar role at PGMOL, although Mr Khan continues to be involved as an adviser to the PGMOL Board. Prior to Ms Martin’s role being created (about 12 months before Ms Martin joined, replacing the initial holder of that role) its functions were in practice covered by a combination of Mr Riley and Mr Khan, although Ms Martin is more involved in the detail than Mr Khan had been.
24. Overall, we accept that Ms Martin was attempting to provide accurate evidence and ultimately did her best to assist the Tribunal. Whilst there is something in Mr Nawbatt’s submission that Mr Khan would have been better placed to provide evidence, and that evidence from others such as PGMOL’s head of HR might have been helpful, we do not see anything sinister in the choice of Ms Martin, given her current role and Mr Khan’s retirement. We also accept that Mr Khan was unlikely to have the level of detailed knowledge required to address details of the invoicing and payment arrangements.
25.
Mr Attwell and Mr Sarginson were both National Group referees
during the relevant period, although Mr Attwell had been in the Select Group between
2008 and 2012 (at which point he was reclassified to the National Group), and
he re-joined the Select Group as from the 2016-17 season. They were both
helpful witnesses in relation to the factual background from the
referees’
perspective, and we accept their evidence as to matters of fact.
26.
For the periods in dispute Mr Brooks, Mr Purkiss, Mr Phillips and
Mr Finney were all referees
at Level 2A or below. Their witness statements were
not challenged, and we accept them as to matters of fact, insofar as they are
relevant.
27.
Ms Ritson is an HMRC officer who was involved in the enquiry. The
primary role of Ms Ritson’s witness statement was to exhibit notes of
interviews undertaken with a number of referees
during 2015.
28.
A significant amount of documentary evidence was produced. This
included documents relating to PGMOL’s dealings with National Group and Select
Group referees,
documents relating to its legal structure and financial
position, rules and regulations of the FA, the Premier League and the EFL, and
correspondence between the parties. It is regrettable that a fair amount of
relevant evidence was only produced by PGMOL shortly before, and in some cases
during, the hearing.
29.
The FA’s responsibilities include ensuring that match officials
uphold standards and apply the Laws of the Game. It is effectively their
regulator. Referees
may not officiate in any affiliated match or competition
unless they are registered with the FA, which must be done annually through a
County FA. By registering, a
referee
agrees to become bound by the FA’s rules
and regulations, including the FA’s Regulations for the Registration and
Control of
Referees
(the “
Referee
Regulations”) which are discussed further at
paragraph 39 below. All the FA’s rules and regulations are set out in a lengthy
handbook, published before the start of each season. Breaches of FA rules,
including failure to apply the Laws of the Game, can lead to disciplinary
action by the FA.
30.
The FA operates in part through a Council. Under the FA’s
constitution the Council has power to manage a number of areas including the
registration, control and development of refereeing.
This is done through a
committee of the Council, the
Referees
Committee, of which Mr Riley is a
co-opted member. This committee has a broad responsibility for matters relating
to
referees,
including match appointments and disciplinary matters[4]. Within the FA it
is therefore the main body responsible for
referees.
For
referees
at Level 1
the FA’s disciplinary role effectively sits alongside PGMOL’s own role
(discussed further below), but it is only the FA that is entitled to cancel or
suspend FA registration.
31.
The FA (with County FAs) has responsibility for the recruitment,
training and development of referees
from the grassroots level up to Level 2.
Any
referee
must start at the lowest level and work up: there is no fast track.
Registration is dependent on showing proficiency in the Laws of the Game[5] and, from Level 4
upwards, a mandatory annual pre-season fitness test which increases in
difficulty at higher levels. Failure to pass the test (or a re-test) will lead
to reclassification. Increased amounts of assessment of the
referee’s
performance are required at higher levels, both from observers at matches
(referred to as assessors at National Group level) and from clubs. Promotion
between levels also requires a minimum number of games to be
refereed.
At Level
4 and above merit or ranking tables operate within the levels, which affect how
matches are allocated as well as being relevant for promotion purposes.
32.
As already mentioned, the FA appoints referees
to matches at
Levels 4 to 2. It uses software called the Match Official Administration System
(“MOAS”), to which
referees
have access. MOAS is also used by PGMOL, which has
the benefit of a non-exclusive licence over it. Its functions include calendar
management, under which
referees
and other match officials can “close” dates
they expect to be unavailable, notification of match appointments and
acceptance (or rejection) of those by match officials, and dissemination of
performance analysis such as match reports and assessment scores. MOAS allows
referees
to include a temporary location or otherwise indicate that they have a
geographical preference or restriction that affects the location of matches
that they can take on at a particular time. When closing off dates there is a
drop-down menu to enter the times that the
referee
is unavailable and the
reasons (such as work, illness, holiday etc.), although there is also a “no
reason given” option.
33. Training is offered by the FA. Between Levels 4 and 2 this covers not only practical on-field matters, but also such matters as psychological support, diet and fitness training and dealing with players, clubs and observers off-field. Training is not compulsory and not paid for, although non-attendance could result in a conversation to ascertain the reasons. (This would probably also happen if match dates were regularly closed off with no reason given.) A coaching and mentoring system is also in place.
34.
Referees
below Level 1 are paid (modest) match fees and expenses
by the home club after each match, and not through the FA. The FA prescribes
what match officials may wear, but it does not provide kit.
35.
As already mentioned, through registration with the FA referees
are required to comply with its rules and regulations. This includes, for
example, the correct application of the Laws of the Game, together with duties
to act impartially, with integrity and in the best interests of the game, to declare
conflicts of interest, to follow certain match day procedures relating to
timing and other requirements, and to report incidents of misconduct to the FA.
36.
Each competition is also able to set its own rules and directives,
provided they do not contradict the Laws of the Game or FA rules. Both the
Premier League and the EFL do set their own rules, and referees
officiating in
matches in those competitions therefore need to be familiar with them, so far
as relevant to their role, as well as with the Laws of the Game and FA rules.
37.
The Laws of the Game are controlled by the International Football
Association Board (“IFAB”), which itself consists of FIFA, the FA and its
Scottish, Welsh and Northern Ireland equivalents. Law 5 deals specifically with
the referee’s
role. It makes it clear that the
referee
has full authority to
enforce the Laws of the Game, and that decisions made by the
referee
are final.
38. A key part of the FA’s constitution is the FA rules. Among other things these provide for the affiliation of clubs and County FAs and the sanctioning of competitions, and impose rules in relation to match participants, including match officials. The rules empower the FA to take action for misconduct, including breaches of the Laws of the Game, the FA rules, other FA requirements and competition rules. The rules also include requirements about standards of behaviour, integrity and prohibitions on betting on matches. There are powers of enquiry and disciplinary powers. Sanctions include suspension, fines and expulsion. Rule 26 deals with fees for match officials, and provides that they are to be set by the competitions within FA limits.
39.
The FA’s Referee
Regulations make detailed provision for the
registration, recruitment, training, examination, classification, promotion and
conduct of
referees.
There are provisions for examinations and annual fitness
tests, marking of
referees
by clubs and regular appraisals by competitions, as
well as annual reviews of the competitions’ list of officials. The FA can
require attendance at training. A specific obligation of impartiality is
imposed, together with obligations to declare conflicts of interest and to decline
to act. There are requirements about uniforms and obligations on
referees
to
report details of misconduct, sendings off and cautions to the FA. The
Referee
Regulations also require
referees
to be bound by an appended Code of Conduct.
This code in turn provides that PGMOL “is responsible” for officials operating
in the Premier League and the EFL.
40.
As previously noted, the competitions also have their own rules, and
these are sent to referees
before the start of each season. We saw the versions
of the EFL and Premier League rules for the 2014-15 season. The EFL’s Standing
Orders relating to match officials provide among other things that PGMOL will
determine match fees and allowances but that fees will be paid “monthly
directly by The League”. Various requirements are specified, including that
officials are generally required to be present two hours before kick-off,
conflicting engagements must not be accepted and reports must made to the
League on certain matters such as misconduct.
41. Section N of the Premier League rules deals with match officials, providing that PGMOL is responsible for compiling the list and for match appointments, which match officials must acknowledge to PGMOL. Rule N.4 provides that acknowledgment of an appointment:
“…shall constitute an agreement with the League by such Match Official to be bound by and to comply with:
N.4.1 the Laws of the Game;
N.4.2 the Football Association Rules;
N.4.3 these Rules.”
42.
PGMOL was established in 2001 to oversee the management and
administration of refereeing
in the professional game, in particular the
Premier League, the Football League and the FA Cup. Before that the FA was
responsible for appointing and managing
referees
in the professional game as
well as at lower levels, although following the formation of the Premier League
there were some interim arrangements under which it and the Football League
(now the EFL) had their own
referee
lists and organised appointments. The aims
behind the formation of PGMOL included ensuring, in line with UEFA principles,
that
referees
are appointed independently of competitions, and that a holistic
approach is adopted for the professional game with a view to ensuring that a
high quality and well trained pool of
referees
is available. It was not
disputed that PGMOL controls the National List (Level 1), being responsible for
promotions to it, reclassifications to Level 2, and the appointment of National
List
referees
to matches. PGMOL also determines the number of officials required
on the Select Group and National Group lists.
43.
PGMOL’s Memorandum of Association[6]
provides that its objects are to “provide the services of match officials” to
FA recognised competitions and to organise courses, conferences, training and
other programmes for match officials. Its statutory accounts for the year to 31
July 2015 describe its principal activity as the “provision of referees
and
refereeing
services” to the FA, the Premier League and the EFL.
44.
PGMOL’s Board comprises an independent chairman, a representative
of each member (the FA, the EFL and the Premier League) and Mr Riley. Only the
member representatives have votes. Reporting to Mr Riley are the Select Group
Director and National Group Director (at the start of the relevant period
referred to as the Select Group Manager and National List Manager), who as the
names suggest are responsible for the Select Group and National Group referees
respectively. They are both employees of PGMOL, and at the relevant times were Keren
Barratt for the Select Group and David Allison for the National Group. It was
these individuals who, with Mr Riley and Mr Barry, comprised the Operational
Management Team (“OMT”). Coaching staff (see further below) also reported to Mr
Barratt and Mr Allison.
45.
PGMOL does not have a significant public profile. Its “logo”
simply comprises the logos of each of its three members, and when Mr Riley
engages with the media he is usually described as “head of refereeing”
since
there is little public understanding of PGMOL’s role.
Referees’
match kit has
the relevant competition logo together with any sponsorship logo, with no
reference
to PGMOL.
46.
Whilst PGMOL’s key responsibilities in respect of referees
relate
to promotion to Level 1 and
referees
in Level 1, it is involved in training and
development at Level 2A, known as the “Panel Select” group, with the aim of
ensuring that there is a suitable pool of
referees
available for promotion to
Level 1, and that there is continuity of training and quality across the
levels. PGMOL also makes certain performance payments and provides kit to Level
2A
referees.
In addition, it has a limited level of involvement in training and
fitness testing at Level 2B (the “Panel Group”).
47.
PGMOL also deals with assistant referees
at Level 1, for whom
there is a separate Select Group and National Group, and appoints observers
(called assessors for the National Group and evaluators for the Select Group)
who attend each match to report on the performance of Level 1 officials. The assessors
provide verbal feedback to the match officials shortly after the match, then
review a DVD of the match (now done online via “MOAStv”) and complete a
detailed post-match report on the officials’ performance. The assessment
procedure results in each
referee
being awarded a competency score after each
game, based on a number of criteria including his application of the Laws of
the Game and his “Key Match Decisions” (“KMDs”). KMDs are also reviewed by
independent panels, and in addition clubs provide their own reports on
referees,
strictly to the competitions but in practice through PGMOL.
48.
Promotion to the National Group depends on a number of criteria.
Eligible referees
seeking promotion to the group from Level 2A are invited to
attend a selection day, and their performance there is assessed together with
their on-field performance. The selection day includes fitness and
psychological assessments, interviews (including with the OMT) and a DVD match
situation test. Although promotion to Level 1 is strictly the responsibility of
the FA, in practice PGMOL has worked with it to refine the selection criteria,
and PGMOL manages the process. As discussed below, appointment to the National
Group is made on an annual basis, before the start of each football season. It
is dependent on passing a pre-season fitness test, based on FIFA requirements,
although there are opportunities to take the test again if it is failed
initially.
49. Once in the National Group, performance is assessed continually using match reports from assessors and clubs (all recorded on MOAS), and a merit table is compiled. Relative performance is relevant to selection for appointment to matches as well as to the performance payment arrangements discussed below, and to the potential for joining the Select Group or being reclassified back to Level 2. Concerns about fitness could also lead a mid-season fitness test.
50.
Mr Riley, and a number of the referee
witnesses, described the
role of a
referee
below the Select Group as a hobby, albeit a very serious one
at National Group level.
Refereeing
is fitted in around other paid work, and it
does not pay the bills. In contrast, members of the Select Group are full-time
employees of PGMOL. Mr Riley described what he considered to be a fundamental
difference between Select Group and other
referees
in that PGMOL “owns” Select
Group
referees,
expecting them to do everything it asks, including following training
programmes, attending all meetings, ensuring that pre-match preparation is
suitable, being available for appointments and even cancelling holidays. In
contrast National Group
referees
are, for example, not obliged to follow a
particular training programme or attend training meetings, and they have no
obligation to accept match appointments. In practice, however, National Group
referees
are at that level because they love the role and are highly committed
to it, so in the vast majority of cases they will do their best to
referee
as
much as possible, and to remain sufficiently fit to do so at National Group
level. Particular problems, such as work commitments, will usually be discussed
with PGMOL staff.
51.
Match appointments are offered to National Group referees
via
MOAS, usually on the Monday of the relevant week. The allocation is dealt with
by PGMOL’s OMT (see paragraph 44 above). Apart from suitability for the
particular match, the OMT will take account of
referees’
availability, any
conflict of interest (so that, for example, a
referee
is not appointed to a
match played by a team he supports or in his home town), and they will try to
take account of any geographical preferences entered on MOAS.
52.
Once appointments are allocated, referees
must go on to the MOAS
system to accept the appointment. It would be open to them to reject an
appointment if for some reason they were no longer available, although PGMOL
would typically want to understand why that had happened. In addition, changes
can be made even after an appointment has been accepted. Illness or injury may that
mean a
referee
has to step down, or work commitments may change at the last
minute. We were also given an example of a
referee
(Mr Sarginson) failing to get
to a match due to traffic problems.
Referees
who do not attend for whatever
reason do not get paid their match fee (although Mr Sarginson did have his
expenses paid on that occasion). Mr Riley also confirmed in his witness
statement that PGMOL may also cancel an appointment of one
referee
and replace
him with another. We understood that this might happen, for example, if the
referee
had received unhelpful media attention or there was a risk of a
perception that integrity was compromised. In each case substitution of an
alternative
referee
would be a matter for PGMOL, not the
referee.
53.
Training sessions are offered to National Group referees
each
season, and a token £100 attendance allowance is paid together with travel
expenses. A physical training programme is sent out each week during the season.
There is also a four week pre-season physical training programme. It is not
compulsory to follow these training programmes (although for a period there was
a misconception among some National Group
referees
that it was compulsory) and
a few do not, keeping sufficiently fit in other ways. However, our impression
was that most do follow the programmes pretty closely, not only for the obvious
reason that they need to stay at a high level of fitness to be able to perform at
National Group level, but also because they are generally highly motivated
individuals with a strong desire to develop and perform to the best of their
abilities. PGMOL employs sports scientists who develop the training programmes
and have direct contact with the individual
referees,
typically receiving and
analysing training data on a regular basis. Depending on the degree of
engagement and the data provided by the
referee,
a more tailored training
regime may be provided. PGMOL would expect a National Group
referee
to have at
least some level of engagement with his allocated sports scientist, otherwise
he would be contacted, at least if match reports also indicated that there was
an issue. The sports scientists also work with the Select Group, although the
arrangements are more rigorous and participation is compulsory.
54.
PGMOL employs coaches for referees.
At the start of the period in
dispute there were insufficient resources to allocate a coach to each
referee,
although this has now changed. Levels of engagement vary but
referees
in their
first or second year at National Group level receive more intensive assistance,
with coaches attending a number of matches and providing one-to-one support in
person. Areas for improvement and targets will be discussed and reassessed over
time. Whilst at a match a coach may offer advice both before and afterwards,
and also at half time, and a written report may be produced.
Referees
in the
“Development Groups” (see paragraph 85 below) would also receive significant
support, and coaching from staff who also coach Select Group
referees.
Most
referees
will also call their coach after a game to discuss what went well and
what might have gone better. The support provided might well extend beyond
on-pitch performance. An end of season review would typically be conducted.
55.
PGMOL also offers some other types of support to National Group
referees.
It offers private medical insurance, although many have that through
their work, and in practice generally reimburses the excess on claims. It
offers a heart screening programme and psychological support. An annual
pre-season training conference is arranged, and for those who cannot make it
there is either a mop-up session or a personal meeting is arranged to ensure
that they pick up key matters before they can start officiating. The conference
is attended by Select Group as well as National Group
referees
and
referees
from Level 2. Match fee rates are announced at the conference, uniform is
collected and certificates are awarded to retiring
referees.
Mr Riley provides
a review of the previous season and a forward-looking message. Relevant changes
in the Laws of the Game are covered and copies of the latest version supplied.
Part of the conference involves smaller mixed discussion groups (led by and including
referees
from both Groups) to cover chosen topics.
56.
PGMOL provides match and training kit for National Group
referees,
together with suits (which should be worn to and from matches), ties
with the PGMOL logo and overcoats. Assistant
referees
and Fourth Officials
receive similar kit, the idea being to ensure that they appear as a
professional team. Match kit is provided in four different colours to take
account of different club colours, with the
referee
choosing which set to use
on the day. PGMOL loans the use of communication equipment to allow match
officials to communicate. However, National Group
referees
must supply their
own boots and trainers, watches, cards and whistles. In practice they also
require their own computer, and many pay for gym subscriptions and for heart
monitors that are used to provide data to PGMOL’s sports scientists, as well as
for other items such as Sky TV subscriptions, nutritional supplements and
sports massages.
57.
National Group referees
are paid match fees, travel expenses and
the training attendance allowance referred to above. Depending on performance
during the season they may also qualify for a share of a performance or merit
payment pot, the size of which is fixed before the season commences. The amount
payable depends on the position of the
referee
on the merit table, and is
discounted if fewer than a specified number of matches are completed.
58.
Many referees
remain on the National List for a number of years:
we saw two examples of 16 or 17 years, and others of between 7 and 11 years.
Some are promoted to the Select Group and a few are reclassified, including
where they do not meet fitness requirements. Others retire from
refereeing.
Mr
Riley accepted that National Group
referees
could be seen as “part and parcel”
of the PGMOL organisation, or as part of the PGMOL “family”. They were also
shown with Select Group
referees
and other match officials and assessors on a
PGMOL organisation structure diagram that we saw for the 2013-14 season.
59.
As previously mentioned, referees
are appointed to the National
Group on an annual basis, before each season starts. For newly promoted
referees
this takes the form of a letter inviting the
referee
to “serve on the
National List” for the relevant season, subject to the fitness test and to
attendance at an introductory seminar, and wishing him a “successful career as
a National List
Referee”.
60.
Referees
(including Select Group
referees)
that PGMOL proposes to
appoint to the National List for the forthcoming season are then sent, by email
on behalf of Mr Riley, a number of documents, some of which require signature.
The content varied to some extent between the three seasons with which we are concerned.
The description that follows is based on the materials for the 2015-16 season,
but except where indicated the differences between seasons are not material.
61.
This document refers to the invitation made to join the list, and
states that if the invitation is accepted then “you are not an employee of
PGMOL and will be treated as being self-employed”. It goes on to say that match
officials “who have accepted an appointment to the List will be expected to
adhere to the Code of Practice outlined below”. The document requires signature
and return by the referee,
who by signing confirms:
“I am pleased to accept the invitation to join the Professional Game Match Officials List for Season 2015/16 on the terms outlined above and in the Fitness Protocol.”
62. The content of the document is relatively brief, and deals with topics under a number of subheadings. Under “Appointments” it is stated that appointments will be made by PGMOL, and that there is:
“…no guarantee that Match Officials on the List will be offered any appointments to matches and Match Officials are not obliged to accept any appointments to matches offered to them.”
63.
A number of points are listed under “Expectations”, all
introduced by the words “Match Officials shall be expected to…”. The points
covered are: being readily and regularly available for appointment to matches,
reaching and maintaining a satisfactory level of fitness as determined by
PGMOL, undergoing fitness testing and any other assessment in accordance with
the Fitness Protocol, observing and obeying the FA and competition rules and
regulations, and carrying out “all instructions, procedures and directives
relating to Match Officials” issued by PGMOL. It states that sanctions related
to breach of FA regulations relating to referees
will be carried out only under
those procedures.
64. Under “Conflicts of Interest”, the documents state that a “Match Official shall at all times act impartially”, and that he must decline to act where there is a materially conflicting interest and declare it to PGMOL, whose decision will be final. Under the heading covering fees and other matters, it is stated that:
“The Football Association, Premier League and Football League will set the fees and expenses for matches in their individual Competitions. Match Officials will be advised on the amount and claiming procedures separately.”
This section also provides that Match Officials may be
invited to assist in promoting products or services of sponsors or official partners
of competitions (and may receive additional payments for that), but may not
enter into arrangements under which PGMOL, the FA, the Premier League or the EFL
may be associated with any product or service, in particular if it is in
competition with sponsors or official partners of any of them. Referees
are
permitted to speak to the media immediately after a game to clarify fact or
points of Law, but otherwise media work may only be undertaken with the
approval of PGMOL. If media work is undertaken with approval
referees
may
receive additional payment for it. (We did not see any evidence of additional
earnings from sponsorship or media work in practice.)
65.
The document also has a heading briefly describing the match
assessment and feedback system, referring to “continuous monitoring” of performance
with “individual appraisals being made when appropriate”. The training
programme and coaching system is also referred to briefly and it is stated that
referees
“will be required to attend meetings arranged by coaches at specific
times throughout the season”. There is also
reference
to the provision of match
kit and health insurance.
66.
This is a relatively lengthy document produced by Mr Riley,
described as containing “directives” issued by PGMOL for the relevant season.
Within PGMOL the document is referred to as the “PGMOL Guidelines”. There is a
table of contents listing the topics covered. The focus is on the conduct of
matches, for example safety and security matters (specific FA guidance being
reproduced), dealing with injuries, disciplinary procedures, reporting certain
incidents and on-pitch misconduct to the FA, dealing with abuse, and so on. There
are a number of references
to particular Laws of the Game. Appendices are
included setting out FA reporting procedures in respect of certain incidents,
and specific FA guidelines for assistant
referees.
We accept Mr Riley’s
evidence that the purpose of this document is largely to bring together, in a
relatively digestible manner, key FA and (to some extent) competition
requirements and guidelines that are of particular relevance to PGMOL match
officials. It also includes some points of best practice from PGMOL’s
refereeing
experts.
67.
As the title suggests, this document sets out certain procedures
to follow on match days. The same document deals with the Select Group and
National Group, the procedures varying to some extent between the two. For
National Group matches officials must arrive in accordance with the competition
instructions, must enter the changing room at least 75 minutes before kick-off
and at that point must switch off their mobile phones, not switching them on
again until they leave the ground[7].
Further restrictions apply as to who else can enter the officials’ changing
room at various stages before, during and after the match. Match officials are
reminded to be vigilant at all times of any possible threats to their
integrity, and must report any concerns to the Select Group Manager or National
Group Manager, or the General Manager (Mr Riley). There is an instruction to
behave appropriately at all times and do nothing which could give rise to
concerns about their independence. We accept Mr Riley’s evidence that these
procedures are designed to protect officials from perceived or real threats to
their integrity, and that generally such matters as timings are prescribed by
the competitions and are simply being highlighted or transmitted to referees
by
PGMOL. However, the procedures also provide protection to PGMOL, as is clear
from the covering emails referred to in paragraph 82 below, and to the
competitions.
68.
This document was required to be completed, signed and returned
to PGMOL, (although from the 2014-15 season referees
previously on the list
only needed to update PGMOL of any changes). It reflects the requirement in FA
regulations to declare any potential conflict of interest.
69. The introductory text in the form restates that where a match official believes that there is a material conflict of interest, he must decline to act and must declare it to PGMOL, whose decision will be final and binding. It states that where a match official actively supports a given team then this must be declared. It also makes clear that match officials may not bet on a match or competition in which they may be involved, and that in case of doubt they should refer to the FA.
70. The remainder of the form contains boxes for completion declaring direct interests and also indirect interests affecting the immediate family. The form also has a gift register, with match officials being required to declare gifts with a value in excess of £20.
71.
Different protocols apply for the Select Group and National
Group. For the latter, the first part of this form deals with the annual
fitness test, stating that officials who do not successfully complete it by 31
August will be reclassified unless the OMT accept that there are extenuating
circumstances (such as injury or work commitments), in which case a revised
date will be provided. Various alternative dates for the test are provided in
June and July (before the start of the season), with an additional test date at
the end of August. The form makes clear that no official will be allowed to
officiate on the National List until they have passed the test. It also states
that the OMT “reserves the right to re-test any official on one or more
occasions during the season”, listing a number of criteria for this including
performance in the initial test, body fat measurements, comments on fitness in
match assessment reports, injury or an assessment by sports scientists of
training records. Any re-test must be completed by 31 March, the sanction again
being that the referee
will be reclassified unless extenuating circumstances
are accepted. Details of the test are provided.
72.
The last part of the form deals with training monitoring,
injury/illness and training expectations. It is recommended that training
(heart rate) data is submitted to PGMOL’s sports scientists weekly or
fortnightly. Referees
who become injured “must” inform their sports scientist
immediately and keep them regularly updated, and may be required to undertake
further testing before returning to officiating. The form states that officials
who do not satisfy the sports scientist that they are fit “will not be allowed
to officiate”. On the subject of training programmes, the document states that
the programmes will be available each Friday, that
referees
are “advised” to
follow them closely, and that they should speak to their sports scientist if
they are having difficulty. The sports scientists will monitor the training and
failure to “satisfy the Sports Scientists’ training requirements may result in
the loss of match appointments or a recall for a fitness test.” In contrast to
this training advice for the National Group, training requirements for the
Select Group, and the provision of training data, are mandatory.
73.
This document must be signed and returned, in terms that the
referee
“understand[s] the PGMOL protocol outlined above and agree[s] to abide
by it”.
74.
This document sets out the way in which individuals will be
selected for promotion or re-classification (demotion) between the various
lists that PGMOL maintains, including promotion to the Select Group from the
National Group and reclassification from the National List to Level 2A. The
criteria for these promotions and reclassifications are largely performance
based, taking account of match reports and performance in the assessor and club
merit tables, but also include fitness and (for promotion to the Select Group) the
ability to demonstrate the off-pitch social, political and diplomatic skills
required for an international referee.
In relation to fitness there is a
reference
to “fitness denoted by…compliance with the fitness protocol,… match
performance and adherence to the training programme…”. A section dealing with
promotion to the National List refers to the selection interview process and
states that promotion will depend on a combination of performance as a
referee
and performance at interview. There is a similar
reference
to the fitness
protocol and training programme.
75. For the 2015-16 season, a new PGMOL Code of Conduct was produced. This is expressed to apply to PGMOL directors and staff, and to all match participants (including match officials, coaches and assessors). Individuals were required to sign a declaration confirming that they had read and would comply with the Code and with the requirements of FA rules and regulations, and also that they would comply with FA rules on bribery and betting, not tolerate any form of manipulation or unlawful influencing of match results, and would report any issues.
76. The content of the Code states that compliance with it is a “condition of… employment or engagement as a self-employed contractor”, and that bribery or corruption could result in dismissal of employees for gross misconduct or, for self-employed match participants, removal from the relevant PGMOL list.
77.
The Code includes sections covering risk areas, as well as specific
sections on bribery, hospitality and gifts, inside information and reporting of
concerns. FA guidance on match fixing is appended, together with the FA rules
on bribery and betting. There is a specific reference
to the need to comply
with PGMOL’s declaration of interests requirements, and a direction to comply
with the Code and also to “attend and actively participate in PGMOL education
and awareness programmes”. Hospitality or gifts in excess of £50 in value must
be recorded on the gift register without delay, and anything in excess of £100
requires prior approval by the General Manager. These limits are fixed by PGMOL
and the Code expressly states that the PGMOL Board, OMT and line managers are
responsible for the implementation and monitoring of the integrity policy.
78. Mr Riley explained in evidence, and we accept, that the Code of Conduct was designed to put the FA’s integrity related obligations into a digestible form for match officials, but also that it allowed PGMOL to take action quickly rather than waiting for an FA process. However, the ultimate sanction of de-registration was one for the FA.
79. This document is a protocol relating to the electronic system provided by Hawk-Eye, and details the procedures to follow in terms of pre-match testing, what to do if there is a problem with the system at any stage, and certain unusual situations where match officials considered that the system has produced an incorrect result.
80.
Referees
are also provided with a copy of the match assessor
guidelines. We did not see these for 2015-16, but the earlier versions we did
see set out detailed instructions and marking guides set by PGMOL for match
assessors in relation to the National Group. (The arrangements are different
for the Select Group when
refereeing
in the Premier League, but the match
assessor procedure does apply to them for Football League and FA Cup matches.)
There is a system to allow a
referee
to challenge KMD scores, which are
relevant to the merit tables.
81.
There are a number of comments in the guidelines about how the
assessor should interact with the match officials. We also saw some sample
assessors’ reports. It is clear that assessors do have an important role in
providing feedback to referees,
both in the immediate debrief following the
match and in the subsequent detailed written report that they produce, as well
as in providing an appraisal and marks that are relevant to the merit tables.
The clear tone of the interactions with
referees
is one of advice and
assistance in personal development, rather than instruction.
82.
The 2015-16 covering email refers to the Code of Practice as
setting out “the basis of your relationship with PGMOL”. The 2014-15 equivalent
states that the Code “sets out PGMOL’s requirements of you”. The Declaration of
Interests form is stated to set out the basis on which referees
are “obliged to
notify us” of any conflicts of interest and gifts received. The Match Day
Procedures are stated to exist to “protect you and the PGMOL”, and the
importance of adhering to them is stressed. For 2015-16 there is
reference
to
the new Code of Conduct and the need to complete a form on the PGMOL portal
confirming that the
referee
has read, understood “and will comply” with its
requirements.
83. In contrast to the 2015-16 and 2014-15 pre-season emails, the cover email for the 2013-14 season was very brief and simply referred to the need to sign and return the Code of Practice and Declaration of Interests forms.
84.
Although not included in the same covering email, a further
document is provided to National Group referees
by PGMOL by the start of the
season, informing them of details of the merit payments available. This states
the total “pot” available for the season and how payments “will” be calculated.
Those at the bottom of the merit table, and those who complete fewer than 10
matches, do not qualify. Payments to those who complete fewer than 20 matches
are discounted (by 40% up to 14 matches and 15% up to 19). The distribution is
otherwise based on a set number of “shares” which are split in the manner
specified in the document, with the first ranked
referee
receiving the most
shares. A further email is sent on behalf of Mr Riley after the end of the
season referring to PGMOL’s Board having confirmed the size of the pot. The
maximum payment for 2014-15 was around £3,500 and the lowest was under £700. Mr
Riley’s evidence was that merit payments would be made as indicated unless the
referee
group had had a “catastrophic” season, which he thought might happen if
the EFL was dissatisfied with the overall level of service.
85.
This protocol is a separate document issued to National Group
referees
regarded as having the potential for Select Group status. There are
two groups, with Development Group 1 aiming for the Select Group within two to
three seasons and Development Group 2 within three to five. Composition of
these groups is reviewed annually, and
referees
accepting a place in either
group are expected to comply with the development protocol.
86.
As might be expected, the protocol sets out a stronger level of
commitment than for other National Group referees,
including fitness requirements,
regular engagement with the sports scientist and weekly submission of training
data, attendance at some Select Group training sessions and at Development
Group seminars, and full engagement with the coaching process. The document
must be signed and returned. However, despite the additional commitment there
is still a recognition that attendance at training sessions is not obligatory:
we saw a sample email to Mr Attwell, as a member of Development Group 1, which
made it clear that it was recognised that work came first.
87.
The total hours worked by National Group referees
obviously
varies with the number of matches offered and accepted. We heard and saw a
variety of evidence on this but our general impression is that, for National
Group
referees
performing at an acceptable level, they would be offered match
appointments in most weeks in the (42 week long) season. Some may
referee
at a
mid-week evening match as well as at the weekend. In oral evidence Mr Riley
suggested that a National Group
referee
could expect a
referee
or Fourth
Official appointment in three out of every four weeks. A table he had produced
with the discussion paper relating to worker status referred to in paragraph 108
below suggested an average of 28 matches per season (20 as
referee
and 8 as Fourth
Official) and an overall commitment of 12 hours (match and non-match) per
season week. Mr Nawbatt submitted that the figures in that table were an
underestimate for the period in dispute. The table was produced in respect of a
later period, when the Select Group had been expanded. Mr Nawbatt also pointed
out that Mr Attwell
refereed
43 matches (including four in the Premier League)
in 2015-16 and acted as Fourth Official on around 15 further occasions. However,
Mr Attwell is clearly exceptionally committed and was working hard to be
promoted to the Select Group.
88.
In its 2014-15 budget PGMOL budgeted for National Group referees
to
referee
around 1600 matches, and to act as Fourth Official in 300 Premier
League matches and in 120 Football League matches. Based on 60 National Group
referees
this would indicate an average of around 27 matches a season as
referee
and 7 as Fourth Official. FA Cup matches are not reflected either in
the budget or (it seems) Mr Riley’s table. A consultation meeting in January
2015 refers to an average of 30 matches in the previous season, with some
refereeing
almost 40. The merit tables for the three seasons relevant to the
appeal suggest an average of around 30 matches as
referee.
89.
On these figures we agree that the estimate of the average number
of matches refereed
in the table was something of an underestimate as far as
the periods in dispute are concerned. Over a 42 week season, the average based
on the 2014-15 budget looks closer to four matches in every five weeks, as
referee
or Fourth Official. The real figure, taking account of FA Cup matches,
may well be a bit higher than that.
90.
PGMOL operates its own disciplinary procedures, and did so before
the Code of Conduct was introduced. We saw examples of suspensions of a team of
officials for breach of match day procedures, following an investigation and
meetings with PGMOL management, and a resignation from the National List by
another National Group referee
following an investigation by and meetings with
PGMOL representatives, including a meeting with Mr Riley. In that case a
settlement deed was entered into between PGMOL and the individual (not
involving any payment by PGMOL, other than a small contribution to legal fees).
Mr Riley explained that where there was a serious allegation of wrongdoing
there would be a discussion with the FA about who was better placed to
investigate it, the FA having greater investigative powers. In addition, whilst
PGMOL could suspend an official or remove him from its lists, removal would
lead to the individual being in limbo since without action from the FA he would
still be registered as a Level 1
referee.
91.
PGMOL operates a forum for elected representative of each group
of officials to meet regularly with Mr Riley to discuss a variety of issues.
Notes we saw included discussion about anomalies under which some National List
referees
had not received Fourth Official appointments, with a
reference
to
addressing the unfairness of that, discussion about the marking scheme and
merit table, discussion of training related issues and discussion about the
appropriate size of the National Group.
92. As previously mentioned, PGMOL is funded on annual basis by its three members. This funding makes up the vast majority of PGMOL’s revenue, although it also derives a relatively small proportion of its income from sponsorship. There is no formal funding agreement with the members. In practice the funding split between the three has remained relatively stable, with the FA contributing less than the Premier League and the EFL. The Premier League and FA each make two instalment payments per season representing their agreed funding contributions. The EFL’s contribution is also paid in two instalments, but in its case payment of the second amount is in practice netted against the charge to PGMOL referred to below, and a balancing payment is made by PGMOL or the EFL as appropriate. PGMOL issues invoices to each of its members in respect of their contributions (including the gross amount of the EFL’s second instalment), with the description “Contribution to PGMOL running costs”. VAT is charged on these amounts.
93.
PGMOL’s budgeting process is undertaken in a three year cycle, corresponding
to the period covered by TV rights deals agreed by the Premier League and the EFL.
The three year cycle is reflected in a strategic plan for the whole period,
including draft budgets for all three seasons. We saw the plan for the 2013-14
to 2015-16 period. This referred to objectives of creating a more effective
supply chain for producing elite officials and continuing to review match
official costs, to the need for PGMOL to provide 10 new Select Group and 63
National Group referees
over 10 years to allow for retirements, and a plan to
put more emphasis on performance related pay, with a new bonus scheme for
National Group
referees
(this is the merit payment arrangement).
94.
The budget for the first year is discussed and agreed by the
PGMOL Board before the start of the season, and the final budgets for years two
and three (including proposed or required changes from the figures anticipated
at the start of the three year cycle) are agreed annually thereafter. Bearing
in mind that only the members’ representatives have votes on the Board, this
effectively involves the budgets being agreed by the individual member
organisations through the mechanism of the PGMOL Board. The annual budgets
include a Match Fees Schedule which specifies the fee and expense rates for
Select Group and National Group referees,
assistant
referees,
Fourth Officials
and assessors for each season for Premier League, FA Cup and Football League
matches respectively. These fee rates clearly feed directly into the budgeted
costs.
95. As well as incurring expenditure on overheads, training and staff costs for non-match official staff (such as coaches, sports scientists and office personnel) PGMOL incurs expenditure in relation to match officials, both in the Select Group and National Group. In relation to the Select Group the position is relatively straightforward: PGMOL as employer pays their salary, match fees and expenses from its own bank account, albeit with the assistance of Premier League staff since PGMOL does not have its own payment processing capacity.
96.
As far as the National Group is concerned, and (it appears) with
the exception of fees and expenses for FA Cup matches, all costs are reflected
in PGMOL’s budget and accounts. However, the EFL pays the majority of the sums
the referees
receive from its own bank account and recharges the amount paid,
with VAT, to PGMOL at the end of each season. This includes most EFL related
match fees and expenses, training allowances and expenses, and any performance
payment. The typical description on the invoice produced for the recharge is
along the lines “PGMO running costs 2014/15”, although we saw one invoice for
2013-14 which referred to “Costs incurred on behalf of PGMO”. It is this
recharge that is netted against the second instalment of the EFL’s funding
contribution.
97.
There was a different approach where National Group referees
officiated in Premier League matches. In those cases match fees and expenses were
paid by PGMOL in seasons up to and including 2014-15. Thereafter these payments
have been made by the EFL and included in the recharge, as for Football League
matches. The same applied to Football League matches where a National Group
referee
was acting as Fourth Official in a match otherwise
refereed
by a Select
Group
refereeing
team, and to any Premier League related training fees and
expenses (for example, where Development Group
referees
attended Select Group
training events). In addition, where National Group
referees
officiated in FA
Cup matches during the period in dispute, payments were made directly by the FA
by cheque and not recharged to PGMOL[8].
This changed after the period in dispute, with the EFL making the payments in
respect of FA Cup matches from 2017-18 onwards, including them in its recharge
to PGMOL, and PGMOL in turn recharging the FA. In response to a question from
the Tribunal, it was confirmed during the hearing that the regulation 80
determinations and section 8 decisions do not reflect payments for FA Cup
matches.
98.
Mr Riley’s witness statement (which was produced several months
before details of the payment arrangements started to be provided) was clearly
written on the basis that PGMOL both “paid”, and indeed “engaged”, the National
Group referees.
The budgets also include National Group related
referee
costs
under an “employment costs” heading.
99.
Payment of match fees and expenses is not dependent on the
production of an invoice by the referee.
From 2015-16 onwards it has been an
automated process that follows from the submission of a post-match report by
the
referee
and the entry of details of expenses on MOAS. Training attendance
fees and expenses are paid in the same way. Prior to this, match expense claims
for EFL matches were submitted directly to the home club via an expenses claim
form, paid by the club and then reclaimed by it from the EFL, with the EFL then
including that amount along with match fees in its recharge to PGMOL.
100. PGMOL’s statutory accounts include
members’ contributions and sponsorship income within turnover (including the
gross amount invoiced to the EFL). Costs include National Group referee
costs,
including the amount recharged by the EFL, as well as Select Group and other
staff costs and overheads. The note relating to staff numbers and costs
excludes National Group
referees,
although in the corporation tax return
“employment costs” covers National Group
referees
as well.
101. It was clear from the evidence that PGMOL relies on assistance from both the Premier League finance function and that of the EFL. Premier League finance staff operate PGMOL’s bank account on its behalf, prepare PGMOL’s monthly management report and process invoices. PGMOL is also assisted by the Premier League in other areas. For example, it uses the Premier League’s offices and has access to its in-house IT support and legal teams. In addition, administration staff associated with match appointments for the National Group are based at the EFL’s office and were employed by it until 2015-16. PGMOL was described a number of times as a “lean organisation”.
102. Ms Ritson of HMRC interviewed seven
referees
and Mr Barry during 2015. The notes of interviews were extensive and
informative.
103. The following points of particular interest appeared from HMRC’s interview notes with Mr Barry, which had been amended by him and by Mr Khan:
(1)
National Group referees
have a choice as to whether to accept a game or
attend training.
(2)
There are no verbal agreements with referees:
everything is documented.
(3) The PGMOL Board agrees the rates of match fees and expenses annually as part of its budgeting process. PGMOL make the payments (including expenses from 2015-16), using funds provided by its members. This takes away the suspicion of possible corruption witnessed in other countries, because PGMOL is independent.
(4)
PGMOL is the sole engager, and engages referees
on an annual basis
(because there is an annual review). Mr Riley specifically agreed this comment
about sole engagement in cross examination, commenting that it was on a per
season basis and adding the qualification that National Group
referees
might
referee
in addition for County FAs, the Army or other service organisations.
(5)
The referee
has total control on the field, subject to the FA
Referee
Regulations. Off the field PGMOL rules apply, such as in relation to the misuse
of social media. But
referees
do represent PGMOL as well as the FA when they
officiate.
(6)
Better performances by a referee
can improve his overall annual income.
104. The general picture from the notes of
interviews with referees
and the witness statements and oral evidence provided
by
referees
was one of committed, driven individuals who are passionate about
football,
refereeing
and about their performance as
referees,
and who have a
continual desire to improve. Certainly at National Group and below, they are
not
refereeing
for the money. They are professional in their approach and place
obligations on themselves: two
referees
referred to
refereeing
as an addiction.
They are ambitious perfectionists. They have worked very hard over a number of
years to be promoted through the different levels of
refereeing.
They recognise
that not making themselves available for matches and training may compromise
their ability to perform at the highest level and lose them the opportunity to
be offered the best matches, and they do not want that to happen. They want to
referee
at the level they have worked hard to attain. This is the key reason
why they make themselves available as much as possible, and do a lot of
training.
Refereeing
is however a hobby and must take second place to primary
work commitments. Most but not all thought that there was no contract (or at
least employment contract) and most thought that the specific training
programme was not obligatory. There were
references
to PGMOL having expectations
of
referees
being available and doing training, and to an expectation on the
part of
referees
of being able to officiate on most dates they had not closed
off. But the evidence shows that National Group
referees
could and did close
off dates when they wanted to do so. It was also clear that cover would be
arranged by PGMOL even late in the day if something arose that conflicted with
an appointment (typically, but not only, work commitments, illness or injury),
and there would be no sanction for pulling out. In such a case the
referee
would
not receive the fee.
105. Referees
have their own particular match
day routine with, for example, individual approaches to preparation, whether to
stay overnight the night before, pre-match interactions with other officials
and the precise time of arrival at the ground. They also clearly recognise that
it is the
referee
who is in charge on match day.
106. The point was made that National Group
referees
were paid a set fee for matches, whatever the travel or other time
taken (including overnight stays). There was nothing extra for preparation or
the post-match reports they had to write, the submission of which triggered
payment of the fee.
107. For the 2017-18 season onwards (so outside
the period covered by this appeal) PGMOL agreed to worker status for National
Group referees
for employment law purposes, as a result of which they started
to receive pension benefits and holiday and sick pay. The Code of Practice was
replaced by a “Terms of Engagement” document. This initially caused some
confusion, and in a follow up email Mr Riley explained that the new document
“effectively updates” the Code of Practice[9],
that the document “clarifies your relationship with PGMOL as we have done in
previous seasons” and that the substantive changes reflected the introduction
of worker status. The email states that PGMOL “will meet its obligations” under
pension legislation, and for holidays and holiday pay. It also refers to “your
time commitment to PGMOL” in the context of the working time rules. Mr Riley
agreed in cross examination that the substantive changes related to the
additional benefits arising from worker status. In practice, the EFL makes
payments for holiday and sick pay and recharges them with other amounts to
PGMOL.
108. We saw a discussion document produced by Mr Riley relating to the potential introduction of worker status. This referred to the terms on which PGMOL “currently engages” with officials and the fact that “revised contracts” would be needed. It notes that some officials considered that they were PGMOL employees and discussed possible actions to strengthen PGMOL’s position on status, including:
“Reviewing the number of officials on each List to create greater diversity in appointments and enable officials to close dates with greater regularity.”
109. Mr Maugham’s principal submission was that
there was no contractual relationship between PGMOL and the National Group
referees,
PGMOL instead simply managing the interactions between them and the competitions.
There was no written or oral contract between PGMOL and the
referees
and the
test for implying one was necessity (The Aramis [1989] 1 Lloyds Law Rep 213; James v London Borough of Greenwich [2008] EWCA Civ 35, [2008] ICR 545). The Code of Practice was not written in contractual language, the fitness
requirements were preconditions to appearing or remaining on the National List
(that is, a qualification for the work) and reflected FA rules, and the
training programme was not mandatory. The Match Day Procedures also simply reflected
FA and competition requirements. The controls on National Group
referees
were
imposed by the Laws of the Game (which it was
referees’
job description to
apply), the
Referee
Regulations and the competition rules, and not by PGMOL. PGMOL
just communicated FA and competition requirements in a digestible form. The
referees
also wanted to
referee
at the highest level and so typically wished to
adhere to PGMOL’s requests on a voluntary basis. They were driven by their
passion for
refereeing
and would not act any differently if a contract was in
place. The only sanction available to PGMOL was not to invite
referees
to
officiate in future matches.
110. PGMOL’s role was to provide a service to
the FA and the competitions of managing the supply and administration of
referees,
with the FA and competitions delegating
refereeing-related
functions
to PGMOL to ensure that their requirements for high quality
referees
were met.
It was simply a joint venture between the three members and had no meaningful
independent life or public presence. It was not significant that National Group
referee
costs were included in PGMOL’s budget because in reality its costs were
simply borne by the three funders in the agreed funding proportions: the
mechanism for achieving that, through PGMOL as a glorified bank account, was
not material. The role of the PGMOL Board in setting match fees was just as the
delegate of the competitions, Rule 26 of the FA rules making it clear that it
is the competitions’ responsibility to set fees. It was clear from the EFL’s
Standing Orders that
referees
needed to look to it for payment, and the
contracts that PGMOL accepted that
referees
had for individual Football League
engagements were with the EFL. The EFL acted as principal and not as agent of
PGMOL, and it was consistent with this that VAT was charged on its recharges of
refereeing
costs to PGMOL. For Premier League matches, rule N.4 (see paragraph 41
above) amounted to an express agreement between it and the
referee
in relation
to each match appointment. Payment by PGMOL simply discharged the Premier
League’s obligation to pay, and the cost was recouped via the funding
arrangement.
111. Mr Maugham submitted that the “no
contract” analysis was supported by payments being made and agreed by entities
other than PGMOL, relying on Cheng Yuen v Royal Hong Kong Golf Club
[1998] ICR 131 and Quashie v Stringfellow Restaurants Ltd [2012] EWCA Civ 1735; [2013] IRLR 99. PGMOL was like the golf club in Cheng Yuen,
providing a framework or context for the relationship between referees
and the
competitions.
112. If, contrary to Mr Maugham’s primary
submission, there was a contractual relationship with PGMOL, then the test for
implying terms into a contract is again one of necessity (Liverpool City
Council v Irwin [1977] AC 239). Again, the
Referee
Regulations, competition rules and
referees’
perceived self-interest
meant that there was no need for implied terms. There was no basis to imply any
obligation on PGMOL to offer matches or on
referees
to accept appointments
where a key document relied on by HMRC, the Code of Practice, explicitly
precluded such obligations. Cases relied on by HMRC as supporting the existence
of mutuality did not share this feature. Similarly, there was no need to imply
an obligation to pay.
113. In any event any contracts between the
referees
and PGMOL were not contracts of employment. They lacked the essential
features of mutuality of obligations and control, and other features also
pointed away from employment. Employment required some obligation to provide
work or make payment if work was not provided: Usetech Ltd v Young 76
[2004] STC 1671 at [64]. PGMOL was under neither obligation so the necessary
“wage work bargain” was absent. Even if there was mutuality during each individual
assignment, taking account of its absence between assignments the mutuality was
insufficient for a contract of service: Windle and
another v Secretary of State for Justice [2016] EWCA Civ 459, [2016] ICR 721. The control that existed was regulatory control rather than control
resting with PGMOL. Control over whether
referees
stayed in the National Group
was not control in the relevant sense, but simply a qualification to be offered
work. Requirements such as fitness and the need to remain impartial and
independent were also necessary characteristics of the role of
referee
and did
not reflect control by PGMOL as employer: compare Matthews and another v
HMRC [2014] STC 297, where an entertainer on cruise liners was held not to
be employed despite some controls over on-ship behaviour. There was also no
possibility of control during individual engagements. Like the rector in Sharpe
v Bishop of Worcester [2015] EWCA Civ 399, [2015] IRLR 663,
referees
performing their duties were beyond control. The Laws of the Game made it clear
that it is the
referees
who have full authority.
114. Other features also pointed away from
employment, such as being in charge of their own fitness, taking responsibility
for pre-match preparation, the provision of some kit, and the opportunity to
profit from sponsorship, media interactions and officiating in more matches.
Refereeing
for National Group
referees
was a passion or hobby and their
commitment to it was not an incident of employment but instead of their
enjoyment and desire to develop.
115. Mr Maugham also submitted that, even if PGMOL had an employment relationship with PGMOL, it was not liable for PAYE and NICs in respect of payments made by the EFL. Payments by the EFL were not made on PGMOL’s behalf or at its expense within s 687 ITEPA. For NIC purposes the EFL, not PGMOL, was liable as a “UK agency”.
116. Mr Nawbatt submitted that there were express
annual contracts between PGMOL and the referees,
with an expectation of renewal
(subject to a review). Because there was no single document fully recording the
terms, the Tribunal had to consider the written documents and the wider factual
matrix, including the parties’ subsequent conduct, to ascertain the terms: Carmichael v National Power. In this case some
of the terms were contained in the Code of Practice, Match Day Procedures and
Fitness Protocol but other terms needed to be inferred from the wider factual
matrix, including the parties’ conduct. Carmichael did not apply a test
of necessity in determining the terms of an express contract which was not
fully recorded in writing. In addition, written terms may not reflect the
parties’ true intentions: Autoclenz Ltd v Belcher [2011] UKSC 41,
discussed in Weight Watchers. The practical reality of the arrangements
is important. PGMOL was providing
refereeing
services and recruited and
retained the
referees
to provide that service. There was no evidence to support
PGMOL’s contentions that this was not the case.
117. The latest case law illustration of an analogous “no contract” argument was Uber BV and others v Aslam and others [2017] IRLR 4 (ET), [2018] ICR 453 (EAT), where Uber also relied on Cheng Yeung and Quashie, and failed on the basis that in reality Uber ran a transportation business, rather than simply providing a technology platform with the contracts being between drivers and passengers. The principles applied by the Employment Tribunal were directly applicable here.
118. HMRC’s case was that individual
engagements to officiate at matches were contracts of employment, and that
these existed in the context of an overarching or umbrella contract between
PGMOL and the referee.
It was not necessary to decide the nature of the
overarching contract, although in HMRC’s view it was a contract of employment.
As regards the individual engagements, these were express contracts between
PGMOL and the
referee.
Even if that was not right then contracts must be
implied on the basis that PGMOL was engaging the
referees
to officiate for a
fee: James v London Borough of Greenwich.
119. As regards mutuality of obligation, Mr Nawbatt relied on the Court of Appeal decision in Pimlico Plumbers v Smith [2017] EWCA Civ 51, [2017] ICR 657, where Underhill LJ referred at [145] to comments he had made in Windle v Secretary of State about the relevance of the arrangements between periods of work in shedding light on the nature of the relationship while the work was being done. He pointed out that in Pimlico Plumbers Underhill LJ added that not only legal obligations were relevant here: where work was regularly offered and accepted that might weigh in favour of a conclusion that the individual had “at least” worker status.
120. Mr Nawbatt submitted that the expectation
of being offered work, resulting from the practice over a period of time, can
constitute a legal obligation to provide some work or perform work provided,
relying on St Ives Plymouth Limited v Haggerty UKEAT/0107/08/MAA, [2008] UKEAT 0107_08_2205,
unreported, 22 May 2008 and Addison Lee v Gascoigne UKEAT/0289/17/LA, [2018] UKEAT 0289_17_1105,
unreported, 11 May 2008 at [33] to [35]. In this case there was a sufficient
mutuality of obligation between matches, but in any event the referees
were in
practice regularly offered, and regularly accepted, work throughout the season.
The requirement in the Code of Practice to be readily and regularly available
for appointment to matches was in practice more than an “expectation”. They
would be reclassified if they were not so available. It was not just a question
of goodwill and mutual benefit.
Referees
expected to be appointed to matches
most weeks of the season and in practice they were. The merit payment criteria
had to involve a corresponding obligation to offer appointments, and the merit
payments were an integral part of the earnings and depended on regular match
appointments. There were also other subsisting obligations between matches, a
significant degree of investment by PGMOL and a commercial imperative to
provide
referees.
The continuing relationship was underpinned by, for example,
consultation arrangements under which elected representatives of
referees
were
regularly consulted on a number of matters. In any event mutuality existed once
a match appointment was made and accepted, and the
referee
had no right of
substitution.
121. Mr Nawbatt also submitted that there was a
sufficient degree of control. The practical realities of the relevant industry
had to be taken into account, and all that was needed was a sufficient
framework of control. The level of control exercised during matches was the
same as for the Select Group, who were accepted as being employed. There was
continual monitoring and assessment via the assessor and coaching system, and
assessments fed into remuneration. The assessment system was no different to
regular employee appraisals. Once a referee
had indicated his availability on a
particular date he had no ability to choose which match to officiate in. That
was entirely at the discretion of PGMOL. PGMOL also had the ultimate right to
sanction
referees
by suspending them from officiating, and imposed controls on
off-pitch activity via the Code of Practice and Protocols.
122. In addition, PGMOL provided much of the
equipment and health insurance, and covered most expenses. Payment was not
dependent on invoices being produced, and referees
did not have the opportunity
to profit from how they performed the task, or a risk of loss. They were not in
business on their own account, and were integrated into PGMOL. The degree of
continuity in the relationship was significant. The fact that the parties may
not have intended to enter into contracts of employment was of little, if any,
assistance: Dragonfly Consultancy Ltd v HMRC [2008] STC 3030 at [53] to
[55].
123. The fact that referees
were paid by a
third party did not prevent there being an employment relationship, Cable
& Wireless plc v Muscat [2006] EWCA Civ 220, [2006] ICR 975 at [34] and
[35]. It was not necessary to rely on s 687 ITEPA, but it was satisfied and
PGMOL was also liable for the NICs as employer.
124. We have concluded that National Group
referees
did have contractual relationships with PGMOL during the periods in
dispute. In our view there is a wealth of evidence to support this conclusion,
and very little evidence to support PGMOL’s contention that the
referees
instead
entered match by match engagements with the competitions.
125. The creation of PGMOL was intended to
ensure that referees
were appointed independently of competitions, and that a
pool of high quality
referees
was available. The former aim at least underlined
the need for a separate legal entity. However, PGMOL’s role went beyond simply
making choices about match appointments, training
referees
and controlling the
lists of Level 1
referees.
It is clear from PGMOL’s constitution and accounts,
as well as from Mr Riley’s evidence, that PGMOL was established to provide
the services of match officials to the competitions, and specifically to
the Premier League and the EFL. In order to provide those services PGMOL had to
engage the
referees.
126. PGMOL’s budgeting and accounting is
consistent with this. With the exception of FA Cup matches it bears the full
costs in respect of National Group referees,
either directly or through a
recharge of amounts paid to them (at cost, with no mark up) by the EFL. We
accept that VAT is charged on this recharge, but we do not consider that any
weight can be placed on that. There is no indication that any proper
consideration had been given to whether VAT was appropriate, and even if it had
been the view taken could simply have been incorrect either as a matter of law or
fact. The invoice that stated that costs were incurred “on behalf of” PGMOL was
the most accurate in terms of the description (paragraph 96 above), but VAT was
still charged under that invoice. We do not accept Mr Maugham’s suggestion that
PGMOL was operating as a glorified bank account, with the costs being borne by its
funders. That was a brave attempt to explain the evidence that emerged during
the hearing that some payments to
referees
were made direct by PGMOL, rather
than by the EFL or the Premier League. However, it not only ignores PGMOL’s existence
as a separate entity, but also the objects for which it was established. Other
suggested explanations for the costs falling on PGMOL’s budget, such as the
competitions engaging
referees,
and supplying them to PGMOL only to be supplied
them back by PGMOL, are unrealistic and also not supported by the evidence.
127. In our view the absence of payment
processing capacity at PGMOL is by far the most likely explanation for the fact
that the EFL makes most payments to National Group referees.
It was clear from
the evidence that PGMOL relies on both the Premier League and the EFL for
invoice and payment processing support. Premier League staff have direct access
to PGMOL’s bank account, which explains why payments processed by the Premier
League are made directly from that account. There was no suggestion that staff
at the EFL have similar access, and against that background the system under
which the EFL makes payments and then recharges amounts paid to PGMOL makes
perfect sense. The very fact that it proved so difficult for Ms Martin to
unearth the precise details of the payment arrangements, and the fact (for
example) that payments in respect of Premier League matches switched to being
made by the EFL rather than direct from PGMOL’s bank account after 2014-15 with
no suggestion that the change had any significance, illustrate that the details
of the payment arrangements are not material. They are all PGMOL costs. Both Ms
Martin and Mr Riley accepted that
referees’
costs were borne by PGMOL. The
notes of meeting with Mr Barry, which were reviewed and corrected by Mr Khan as
well as by Mr Barry, also stated that PGMOL made the payments. In substance we
think that is correct, and the payment and recharge arrangements with the EFL
are simply machinery.
128. We have also concluded that PGMOL sets the
rates of match fees and expenses annually, as part of its budgeting process and
by means of a PGMOL Board decision (see paragraph 94 above). This is also reflected
in the notes of HMRC’s meeting with Mr Barry, and is consistent with PGMOL
engaging the referees.
The process involves recommendations by the OMT to the
PGMOL board, the voting members of which will discuss the matter within their
own organisations before agreeing the budget. This can be reconciled with the
requirement in rule 26 of the FA rules (that competitions must set the fees)
because in practice the competitions agree the fee rates via the mechanism of a
PGMOL Board decision. The fact that PGMOL sets the rates is entirely consistent
with it being the engager, and would require some additional explanation if it
were not.
129. There was also a significant amount of
other documentary and witness evidence to support the fact that PGMOL engages
the referees.
It is PGMOL that communicates the fee and expense rates to
referees,
at the annual conference. It is PGMOL that produces and sends the
pre-season documents discussed further below, requiring signature and return of
some of them to it. The covering emails for 2014-15 and 2015-16 explicitly
refer to PGMOL’s requirements of
referees
or its relationship with them. It is
PGMOL that communicates the performance payment criteria and confirms the
amounts due. It is PGMOL that provides coaching and other support, including
health insurance, and offers an attendance allowance for training sessions. It
also provides kit. Disciplinary procedures are conducted by it. To the extent
that anyone’s views or impressions are relevant, then (leaving to one side Ms
Martin’s recently produced evidence) none of the witness statements suggested
that the engager was anyone other than PGMOL, and until very recently
correspondence with HMRC was on the same basis. Mr Riley spoke of National
Group
referees
as being part of a PGMOL family and he agreed with Mr Barry’s
comment about PGMOL being the engager (see paragraph 103(4) above). The
strategic plan for the three relevant seasons refers to the need for PGMOL to
provide new National Group
referees
(see paragraph 93 above). It was also PGMOL
that successfully defended a claim by a National Group
referee
for unfair
dismissal in Martin v Professional Game Match Officials Ltd (Employment
Tribunal, Case 2802438/2009), and entered into a settlement deed in another
case, with no suggestion that the
referees
concerned had no contractual
relationship with it.
130. We agree with Mr Nawbatt that the way in
which PGMOL dealt with the worker status issue is also of some relevance (see
paragraphs 107 and 108 above). Mr Riley’s follow up email referred to
clarifying referees’
relationship with PGMOL, and the discussion document referred
to PGMOL engaging
referees
and to “revised contracts”. The Terms of Engagement
document is based on the Code of Practice. PGMOL was clearly accepting an
obligation to pay holiday pay, yet in practice payments are made by the EFL, as
with match fees. Other correspondence we saw in connection with worker status
proceeded on a similar basis.
131. We are not persuaded by Mr Maugham’s
suggestion that contracts between referees
and the competitions were evidenced
by the EFL’s Standing Orders and by the Premier League rules. The statement in
the Standing Orders that fees and allowances will be paid “monthly direct by
the League” (see paragraph 40 above) simply
reflects the factual position that the actual payments are made by the EFL.
Rule N.4 of the Premier League rules (paragraph 41 above) does amount to an
undertaking to comply with the Laws of the Game, FA rules and Premier League
rules, but our interpretation of that is that it is intended to be an
undertaking about standards of behaviour in respect of the particular
appointment, rather than an agreement to take on an engagement for a fee. The
fact that it would also apply to the Select Group illustrates this. None of the
witness evidence pointed to these provisions as being seen as having any
particular relevance to the terms of engagement of
referees.
132. Turning to the case law relied on by Mr
Maugham, we do not think that this is a case where there were no written or
oral contractual terms, such that the test to apply is whether it is necessary
to imply a contract (under the principles described in The Aramis). As
discussed further below we consider that the pre-season documents, together
with the communication of financial terms orally and/or in writing, amounted to
express contractual relationships between PGMOL and the referees.
133. The facts are also very far from those in
Cheng Yuen v Royal Hong Kong Golf Club and Quashie v Stringfellow
Restaurants Ltd. Cheng Yuen concerned a caddie who had been trained
and provided uniform by a golf club. The club paid in cash for each round that
the caddie worked, but debited the relevant member for the amount paid. The
Privy Council held that the only reasonable view of the arrangements was that
the caddie was contracting with the individual members, who bore the cost,
could instruct the caddie about what they wanted and how they wanted it done, and
for whom the caddie’s duties were actually performed. The caddie simply had a
licence from the club to offer himself as a caddie on certain terms. As with PGMOL,
the precise payment arrangements were machinery: in each case the cost was
passed on to the actual engager. In contrast to the golf club member in Cheng
Yuen, the competitions and clubs in this case do not instruct referees
about what they want done and how (and indeed that would compromise the
referees’
independence).
Referee
services are provided to the competitions, but
that is done under the arrangement the competitions have with PGMOL.
134. Quashie concerned a lap dancer who
unsuccessfully claimed for unfair dismissal. The key point in that case was
that Stringfellows was not obliged to make any payment to the dancer at all.
She negotiated fees with customers and was herself charged by the club for
being allowed to perform. In contrast and as discussed further below, in this
case PGMOL is obliged to pay the referees.
135. We also agree with HMRC that PGMOL and
National Group referees
entered into annual (per season) “overarching”
contracts, in addition to match specific engagements. In our view the terms of
the overarching contracts can be found largely in the pre-season documents. We
do not agree with Mr Maugham that because, for example, the Code of Practice
was not written in formal contractual language, none of its terms have
contractual force.
136. Mr Nawbatt placed significant reliance on Carmichael
v National Power in arguing that additional terms should be inferred from
the wider factual matrix, disagreeing with Mr Maugham that the test that had to
be applied was one of necessity (Liverpool City Council v Irwin). Mr Nawbatt
also relied on Autoclenz v Belcher. The wider factual matrix included
the reality of referees
being regularly offered, and regularly accepting, matches,
their time commitments and approaches to training.
137. Carmichael v National Power was a case where part time power station guides who worked on a casual basis claimed that they had employment contracts for employment law purposes. Their claims were not made on the basis that they had successive ad hoc contracts of employment, so the dispute related to the existence or otherwise of an obligation to provide or undertake work in between engagements. The House of Lords held that there was no such obligation. Lord Irvine approved the tribunal’s approach of considering not only the documentation but the way in which it had been operated and the parties’ understanding of it, from which the tribunal could infer the parties’ true intentions, objectively ascertained ( [1999] 1 WLR 2042 at 2045 and 2047). Lord Hoffmann explained that whilst the construction of documents is a question of law, that does not apply where the intention of the parties, objectively ascertained, must be gathered partly from documents but also from oral exchanges and conduct (including subsequent conduct). In that case the terms of the contract are a question of fact, as is the question of whether the parties intended the documents to be an exclusive record (page 2049). (See also the summary of the approach taken in Carmichael in Ministry of Defence HQ Defence Dental Service v Kettle UKEAT/0308/06/LA, [2007] UKEAT 0308_06_3101, unreported, 31 January 2007 at [38] to [45].)
138. Liverpool City Council v Irwin was an earlier House of Lords case about the terms of a lease. The written conditions were clearly incomplete. Lord Wilberforce referred to various types of implications of terms into a contract, of which the relevant one was a situation where the parties have not fully stated the terms in writing, and the court is simply concerned to establish what the contract is ([1977] AC 239 at 253 to 254). He went on to describe the question of whether certain maintenance obligations on the landlord could be read in as involving a test of necessity (page 254F). A similar approach was taken in other judgments.
139. In our view there is no necessary conflict between these approaches. There was no suggestion in Irwin that the parties, and in particular the council, had conducted themselves in a way which would allow the relevant obligations to be inferred. So it was truly a question of implying terms. In contrast what HMRC seek to establish in this case is that the behaviour and practice of the parties effectively supplies some of the contractual terms, and that the written terms are to be read in the light of this. That approach is consistent with the approach taken in Carmichael, and the question is one of fact.
140. Turning to the facts of this case, we first consider the documents and then go on to consider whether the terms that can be derived from them are added to, or affected by, oral communications or conduct.
141. The Code of Practice and covering email
amount to a written offer to include the referee
on the National Group list for
the relevant season, which the
referee
accepts by signing and returning the
Code of Practice. The written terms, in the sense of the legal rights and
obligations of the parties, can be found in various places in the Code of
Practice, the Fitness Protocol (to which specific cross
reference
is made), the
Declaration of Interests form (which must also be signed and returned), the
merit payment document and (for 2015-16) the Code of Conduct. We also consider
that some additional terms are supplied by the Match Day Procedures, which we
have found exist to provide protection to PGMOL as well as the
referees
and
competitions.
142. Although much of the documentation is
written in terms of expectation rather than legal obligation, there are some
provisions that we consider amount to express legally enforceable rights and
obligations. From PGMOL’s perspective, it agrees to include the referee
on the
list, to provide a system of continual assessment and feedback (along the lines
indicated by the match assessor guidelines), to provide a training programme
and a coaching system, and to provide match kit, health insurance and access to
sports scientists. From the
referees’
perspective, they agree to act
impartially, to declare conflicting interests and decline to act, and to declare
gifts over a certain limit. They also agree not to enter into sponsorship or
promotion arrangements or undertake media work except as permitted. In the
fitness protocol, whilst passing the fitness test is a qualification to join or
remain on the list rather than an obligation on
referees,
PGMOL clearly
undertakes to provide the opportunity for
referees
to be tested and reserves
the right to require a re-test. As regards training, the document is largely in
terms of recommendation or expectation, but there is an obligation on
referees
to inform their sports scientist immediately about injury and keep them updated
about that. The Code of Practice also contains an obligation to attend meetings
with coaches. The merit payment document is also written in terms of legal
entitlement, providing a relatively clear formula for the distribution of the
available amount. It has a clear link to the merit table, and therefore to the
match assessor guidelines.
143. The Match Day Procedures document contains
a number of obligations, for example about arrival time at grounds, turning off
phones, behaving appropriately and reporting possible threats to integrity. The
Code of Conduct also places obligations on referees,
who specifically agree to
comply with it. Whilst this code largely reflects obligations that
referees
owe
the FA in any event, and the Match Day Procedures largely reflect competition
requirements, they do amount to specific commitments to PGMOL.
144. Apart from the merit payment document, the
pre-season documents do not cover financial aspects. However, it is clear that
match fee and expense rates are communicated by PGMOL, primarily at the annual
conference, and that the amount of the attendance allowance for training would
also have been communicated by it. In our view these amount to commitments by
PGMOL that, if referees
attend training or officiate at matches during their
time on the National Group list, they will be paid fees and expenses at the
rates specified.
145. Mr Nawbatt sought to argue that the
reality of the arrangements meant that there was some legal obligation to
provide work or accept work offered. We disagree. The terms of the Code of
Practice are clear that there was no such obligation, and we do not think that this
is overridden by the parties’ conduct, the practical realities or (in Autoclenz
terms) the true intentions of the parties. We accept that ordinarily an entity
the function of which is to provide the services of a number of highly
qualified individuals, from a limited pool of available talent, on a regular
basis for important commercial events (here professional football matches)
would wish to ensure that it can call on staff who have a legal commitment to
work. However, this is not an ordinary situation. PGMOL is dealing with highly
motivated individuals who are keen to referee
at the highest level, and who
generally wish to make themselves available as much as possible. There is no
need for a legal obligation. The
referees
simply place obligations on
themselves: see the discussion in paragraph 104 above. PGMOL has control over
the size of the National Group and has doubtless tailored that to ensure that
in practice it has a sufficient number of
referees
available, and that
referees
are generally content with the number of matches they are offered and accept.
It is not surprising from this perspective that the question of the appropriate
size of the National Group is covered in consultation discussions.
146. We have considered whether the existence
of the merit payment arrangement must imply some level of obligation on PGMOL
to offer match appointments. We do not consider that this is the case. In
practice referees
know the size of the National Group and (in rough terms) must
have a good idea of the number of matches for which appointments are likely to
be needed. At the very most, an obligation might be implied that, to the extent
match appointments are offered, PGMOL will not adopt an overtly unfair method
of allocation as between different
referees
who have made themselves available.
However, that is speculation and we do not make any finding that there is such
an obligation. The point could equally be explained by the fact that, if PGMOL
does not adopt a fair approach in practice, then the reality is that it will
start losing
referees,
or at least risk losing their goodwill.
147. Mr Nawbatt relied on St Ives Plymouth Limited v Haggerty and Addison Lee v Gascoigne to support his submission that the expectation of being offered work, resulting from the practice over a period of time, can result in a legal obligation to provide some work or perform work provided. St Ives was an unfair dismissal case brought by a casual worker, where the EAT held that the Employment Tribunal was entitled to conclude that there was sufficient mutuality of obligations in the gaps between individual employments (which were accepted as contracts of service) to infer the existence of an overarching contract of employment. The Tribunal found that there was no arrangement to offer or accept any specified minimum amount of work, and the worker could decline offers. However, based on conduct over a long period there was an expectation that the worker would be available, and if she persistently declined offers she would be removed from the list of casuals. There was also an expectation that she would be offered a reasonable amount of work. The EAT noted that a course of dealing may be capable of giving rise to mutual legal obligations, and concluded by a majority that there was a sufficient factual substratum to support a finding that a legal obligation had arisen in that case, as a matter of fact, based in part at least on commercial imperatives including the importance of the work to the employers, the regularity of the work, the lengthy period of the arrangements and the fact that the employer felt under an obligation to distribute the work fairly (paragraphs [26] to [30]).
148. In Addison Lee the principles discussed in St Ives were applied in a “limb (b) worker” status situation, with the EAT concluding that the requisite mutuality of obligation was established by the Tribunal’s findings about established practice and expectations (paragraph [35]).
149. We did not find either of the cases to be of
great assistance. Each case turns on its facts. In neither of those cases was
there any express provision negating an obligation to provide or accept work.
In this case there is. Referees’
willingness to take on work is amply explained
by their passion and personal ambition. PGMOL’s regular offers of work is
equally explained by the number of matches available and the limited pool of
referees
on the list. In Autoclenz terms there was nothing unreal, and
no failure to reflect the parties’ true intentions or agreement, in the
statements in the Code of Practice that there was no guarantee that
appointments would be offered and no obligation to accept any appointments.
Both parties understood and accepted that.
150. In Stevedoring & Haulage Services Ltd v Fuller and others [2001] EWCA Civ 651, [2001] IRLR 627, where the question (as in St Ives) was whether casual workers were employees when not working, the documents under which casual work was offered expressly negated any obligation to offer or accept work. The Court of Appeal quashed the decision that the individuals were employees, on the basis that the documents flatly contradicted the terms that the Tribunal had implied to the effect that a reasonable amount of work would be offered and taken on. At best there was a moral obligation of loyalty and mutual economic interests (paragraphs [10] and [11]). In Hafal Ltd v Lane-Angell UKEAT/0107/17/JOJ, [2018] UKEAT 0107_17_0806, 8 June 2018, the EAT observed the obvious point that an expectation to provide work is not the same as an obligation, and noted that whilst expectations may crystallise over time into legal obligations, St Ives was a case where there were no express terms negating such obligations. The facts of Hafal were closer to those in Stevedoring and Carmichael v National Power and the documents showed that there was no obligation between periods of work (see paragraphs [29] and [33]). Similarly, in this case there were express terms negating any obligations to offer and take on work, and in our view those terms reflected the true agreement.
151. It follows that, whilst there were
overarching contracts between PGMOL and National Group referees
in respect of
each season, those contracts were not themselves contracts of service, because
there was no mutuality of obligation outside individual engagements: see Usetech
v Young at [57], applying Stevedoring and Carmichael v
National Power as well as Clark v Oxfordshire Health Authority
[1998] IRLR 125 (CA). However, the question remains as to whether the
individual engagements were contracts of service. In answering this question it
is necessary to consider whether the existence of the overarching contract
affects the analysis.
152. It is clear from Windle v Secretary of State that the nature of arrangements between periods of work, and in particular the presence or absence of mutuality of obligation, can shed light on the character of the relationship while work is being done. That case concerned interpreters providing services for courts and tribunals. The Court of Appeal held that the Employment Tribunal were right to take account of the absence of an umbrella contract involving a commitment to offer or accept work as a relevant factor in determining that the individuals were not employees within the extended definition of that concept for equality legislation purposes. Underhill LJ said the following at [23]:
“I accept of course that the ultimate question must be the nature of the relationship during the period that the work is being done. But it does not follow that the absence of mutuality of obligation outside that period may not influence, or shed light on, the character of the relationship within it. It seems to me a matter of common sense and common experience that the fact that a person supplying services is only doing so on an assignment-by-assignment basis may tend to indicate a degree of independence, or lack of subordination, in the relationship while at work which is incompatible with employee status even in the extended sense. Of course it will not always do so, nor did the ET so suggest. Its relevance will depend on the particular facts of the case; but to exclude consideration of it in limine runs counter to the repeated message of the authorities that it is necessary to consider all the circumstances.”
153. Underhill LJ went on to note at [24] that Elias LJ had made a similar point in Quashie, where the question was whether there was a contract of service rather than whether the extended equality legislation concept applied, and said that the point was the same, albeit that the “pass mark” was lower in the latter case.
154. Underhill LJ commented on the same issue in the Court of Appeal decision in Pimlico Plumbers (a “limb (b) worker” case, so again considering an extended definition of employment), where he said at [145]:
“It is necessary to distinguish two separate circumstances in which the issue of whether a putative employee/worker is engaged on a casual basis might arise. The first is where the substantive claim directly depends on their enjoying employee/worker status in respect of their periods of work (e.g. because the claim concerns their pay or some discriminatory treatment in the workplace). In such a case the question whether the engagement is casual is indeed relevant, but only on the basis that it may shed light on the nature of the relationship while the work in question is being done (see Quashie v Stringfellow Restaurants Ltd [2002] EWCA Civ 1735, [2013] IRLR 99, at paras. 10-13, and Windle at paras. 22-25). But it is not only legal obligations that may shed light of that kind. If the position were that in practice the putative employee/worker was regularly offered and regularly accepted work from the same employer, so that he or she worked pretty well continuously, that might weigh in favour of a conclusion that while working he or she had (at least) worker status, even if the contract clearly (and genuinely) provided that there was no legal obligation either way in between the periods of work. The second situation is where the claim directly depends on the claimant's status during periods of non-work, either because he or she has to establish continuity of employment or because the claim itself relates to their treatment during that period: in such a case mutuality of legal obligations is essential.”
155. For tax purposes, of course, we are
concerned with the first circumstance referred to: HMRC will succeed if the
referees
are employed under contracts of service while they actually perform
tasks. As can be seen from the passage quoted, in Pimlico Plumbers
Underhill LJ was suggesting that a practice of being regularly offered and accepting
work might weigh in favour of “at least” worker status, even if there was no
legal obligation. In making that suggestion he seemed to be going further than
he did in Windle.
156. In the Supreme Court decision in Pimlico Plumbers, Lord Wilson said the following at [41]:
“So the tribunal found, legitimately, that there was an umbrella contract between Mr Smith and Pimlico. It is therefore unnecessary to consider the relevance to limb (b) status of a finding that contractual obligations subsisted only during assignments. The leading authority in this respect is now Windle v Secretary of State for Justice [2016] ICR 721, in which Underhill LJ suggested at para 23 that a person’s lack of contractual obligation between assignments might indicate a lack of subordination consistent with the other party being no more than his client or customer. The energetic submission of Ms Monaghan QC on behalf of Mr Smith that, on the contrary, it might indicate a greater degree of subordination to that other party must await appraisal on another occasion.”
157. This does not refer to Underhill LJ’s
wider reference
in the Court of Appeal decision in Pimlico Plumbers to
the position in practice, so the current status of those comments – and their
application to contracts of service questions – is not entirely clear. In this
case of course
referees
are generally regularly offered and regularly accept
work for the reasons already discussed, but we have found that there were no
legal obligations to do so. There were however some other legal obligations to
which each party was subject under the overarching contract.
158. Ultimately, however, the test of whether an employment relationship exists is a multi-factorial one: White and another v Troutbeck SA [2013] IRLR 286 (EAT) at [34][10]. In our view the existence and terms of the overarching contracts, and indeed the wider context of the parties’ relationship in practice, must be factors to which we should have regard in determining the nature of the individual match engagements. Those contracts are part of the relevant factual matrix.
159. In our view individual match appointments
each gave rise to a contract, constituted by the offer of the appointment made
by PGMOL, and its acceptance by the referee,
through the MOAS system. Under the
contract the
referee
would agree to officiate, whether as
referee
or Fourth
Official, and PGMOL would agree to pay fees and expenses at the specified rates,
subject to submission of a post-match report. These contracts existed in the
context of the overarching season-long contracts. There was however no sanction
if, having accepted an appointment, the
referee
was unable to get to the match.
We do not think that anything in the documentation or the parties’ conduct is
consistent with non-attendance amounting to a breach of contract. Invariably,
given
referees’
personal commitment levels, there would in practice be a good
reason for the failure to attend. The
referee
clearly had no right to substitute
another person to do the task. It was understood that if he could not attend
then his appointment could and would be replaced by the appointment of another
official. The particular contract would simply fall away (without sanction) and
no match fee would be paid. Similarly,
as indicated in Mr Riley’s witness statement, it was understood that if PGMOL
felt that it needed to do so, it could cancel a particular appointment and
replace the
referee
with another person. In our view this would, again, not
involve a breach of contract. The
reference
in Mr Riley’s statement was in the
context of integrity, and stated that there were processes allowing
appointments to be changed by PGMOL if “risk factors” came to light. However,
there was no suggestion that there was a contractual limit on PGMOL’s rights in
this respect, and in our view any decision about changing an appointment would
be one that it was free to make if it felt that it was appropriate to do so. Subject
to these points, during the actual engagement there would be some level of
mutuality, namely for the
referee
to officiate as contemplated (unless he
informed PGMOL that he could not) and for PGMOL to make payment for the work
actually done.
160. In Weight Watchers Briggs J considered whether meeting leaders were employed for tax purposes. In relation to mutuality of obligation, he identified the question as not simply whether there is a contract, but whether the mutual obligations are “sufficiently work-related” (paragraph [23]). He noted at paragraph [30] that contracts for discontinuous work might either comprise single overarching contracts, a series of discrete contracts, or a hybrid class consisting of an overarching contract in relation to some matters supplemented by discrete contracts for each period of work. In that third case it was sufficient if either the overarching contract or the discrete contracts are contracts of employment. Where the period of a discrete contract coincided with the period of work, there was no difficulty in demonstrating mutuality under that contract. However, in Weight Watchers each discrete contract was for a series of separate meetings, and in that case the relevant mutuality of obligation needed to subsist during the whole period of that contract (paragraph [31]).
161. This is a case within Briggs J’s third
category, so it is sufficient for there to be mutuality during each discrete
contract for work done. However, although not on all fours with the facts of Weight
Watchers, it is in our view relevant that the discrete contract started
when an individual match appointment was offered and accepted, and that even
after acceptance the referee
had the ability to withdraw from the engagement
before he arrived at the ground, and that PGMOL was also able to cancel the
appointment. By contrast in Weight Watchers, where an employment
relationship was found to exist, there was some obligation on the leader to not
take meetings only for good reasons, to try to find a suitable replacement, and
if that failed to give as much notice as possible, the leader’s original
obligation to work only ceasing when a replacement leader was found or the
meeting was cancelled. The right not to take a meeting was therefore fettered (see
paragraphs [89] and [92]).
162. A comparison can also be made with the facts of Cornwall County Council v Prater [2006] EWCA Civ 102, [2006] ICR 731, where a teacher engaged under a series of individual contracts to teach children unable to attend school was held to be employed, each engagement in respect of a particular child being a contract of service. The teacher was committed to teach the child in question for the duration of the engagement or for so long as was necessary. Mummery LJ said at [40]:
“The important point is that, once a contract was entered into and while that contract continued, [the teacher] was under an obligation to teach the pupil and the council was under an obligation to pay her for teaching the pupil…”
In this case there is no comparable obligation, outside the actual performance of duties at a match.
163. In order for individual engagements to be contracts of employment, there must not only be mutuality but also a “sufficient framework” of control in relation to that engagement (Montgomery v Johnson Underwood at [19]). This means some contractual right of control, in the sense of the employer having the right to step in, even if that right is not exercised in practice and even if the individual is engaged to exercise his or her own judgment about how to do the work: see White and another v Troutbeck SA (EAT) at [40] to [42].
164. Mr Maugham submitted that the control that
existed was regulatory control rather than control resting with PGMOL, and that
during engagements referees,
like clergy, were beyond control. Mr Nawbatt
submitted that there was a sufficient degree of control, including via the
assessment and coaching system as well as controls imposed by the documents.
165. We agree that the pre-season documents, including
the fitness protocol, the Match Day Procedures document and (for 2015-16) the
Code of Conduct, imposed some obligations on referees
which gave PGMOL elements
of control. Some of those obligations applied to match day activity (most
obviously the Match Day Procedures) and were therefore relevant to individual
match appointments. Others, such as contact with the sports scientist, clearly
did not apply in respect of individual match appointments. Although
referees
were and are undoubtedly subject to both FA and competition rules and
regulations while at a match, we have found that they also owed direct
commitments to PGMOL by virtue of the terms of the pre-season documents.
166. We are not persuaded that the assessment
and coaching systems themselves provide further elements of control in respect
of individual match appointments. While the assessment system was and is
clearly very important and feeds into the merit tables, selection for future
match appointments and ultimately to the merit payment distribution, promotion
and reclassification, it is advisory rather than controlling in nature. Similarly,
the coaching system is very much a personal, one to one, arrangement designed
to support referees
and assist them to develop to the best of their ability. A
coach present at a match might offer advice at half time as well as before or
after, but that is simply advice and not an indicator of control.
167. Although some referees
suggested in HMRC’s
interviews that they had no control over where they were sent for matches, we
do not think that that is correct in a legal sense. They had the right not only
to express geographical preferences on MOAS but also to refuse any particular
appointment once it was offered, or even to back out later. They might well not
have wanted to do that for their own reasons, but legally they were free to do
so. This was not the sort of arrangement under which PGMOL could direct the
referees
about where to go or when to go there, or indeed what task to perform
when they got there (whether as
referee,
Fourth Official or indeed anything
else). In each case the
referees
needed to agree to take on a particular task
at a specified location, date and time. Clearly
referees
had to travel to the location
to carry out at the appointment, but that was determined by the nature of the
task they had agreed to take on rather than by any form of control in an employment
sense.
168. Whilst we would not go so far as to
compare referees
to clergy, it is relevant to consider the nature of the role. The
referee
is undoubtedly the person in charge on match day, he has full authority
and his decisions are final. Fourth Officials answer to, and work with, the
referee,
whoever that
referee
is and whether he is employed by PGMOL or not.
The Code of Practice also recognises that the FA alone will deal with breaches
of its
Referee
Regulations. In reality it is hard to see how PGMOL could retain
even a theoretical right to step in while a
referee
is performing an engagement
at a match, however badly Mr Riley, or anyone else from PGMOL who might be
watching, thinks that the
referee
is doing. At most they could offer advice at
the time and take action after the engagement has ended. In our view this is
the case despite the undoubted fact that the
referee
might be officiating in a
critical match at which large sums are at stake (for example, where the match
is relevant to a club’s promotion or relegation between leagues). The Laws of
the Game make clear that the
referee’s
decision is final, and there was no
suggestion that PGMOL could (for example) remove the
referee
at half time and
replace him with another, or do anything more than offer coaching advice.
169. Overall, we are not persuaded that PGMOL
had a sufficient degree of control during (and in respect of) the individual
engagements to satisfy the test of an employment relationship. It did have a level
of control outside match appointments as a consequence of the overarching
contract. Although some of the obligations imposed by that contract applied to
matches, there was no mechanism enabling PGMOL to exercise the correlative
rights during an engagement. In reality, the only sanction PGMOL could impose
for failure to adhere to these commitments was not to offer further match
appointments, and to suspend or remove the referee
from the National Group
list. If an issue emerged between a match appointment being made and the date
of the match, then the most PGMOL could do in respect of that appointment was
to cancel it. But that is not an exercise of control during an engagement: it
is a termination of that particular contract altogether.
170. The third condition referred to by
MacKenna J in Ready Mixed Concrete is that, as well as there being
mutuality of obligation and sufficient control, the other provisions of the contract
are consistent with it being a contract of service. MacKenna J referred (at [1968] 2 QB 497, 516) to examples illustrating the distinction between contracts to
build or carry goods, and contracts to work for a builder or to work for
someone on terms that the individual provided his own transport (the latter
examples being employment). The fact that there is some element of control does
not mean that there is necessarily a contract of service. Simplistically, the
equivalent here would be to say that a referee
is engaged to officiate at a
particular match, rather than to work for PGMOL under its control.
171. We have considered the various other tests
of employment status referred to at paragraph 18 above. As Nolan LJ suggested
in Hall v Lorimer ([1994] 1 WLR 209 at 218, the test of whether a person
is in business on his own account is not necessarily very illuminating where a
profession or vocation is concerned. This is not a case where it is
straightforward to point, for example, to the fact that the individual supplies
his own equipment, because a referee
needs relatively limited equipment. Like
an actor, surgeon or other professional, there may also be limited financial
risk, in the sense of risk of loss, and earnings may be driven largely by how
much work is done and the quality of the work obtained.
172. With these caveats, we have considered the
fact that National Group referees
were supplied with some equipment by PGMOL
but also supplied some of their own equipment at their own expense, that the
profits they made could increase with the work done, not only because they would
receive increased income but because their (relatively fixed) expenses would
represent a smaller proportion of total revenue. However,
referees
could not
really be said to have set up their own “business-like organisations” (as
referred to by Mummery J in the High Court in Hall v Lorimer) and they
had no ability to negotiate individual fee rates. There was a very low risk of
loss. But the fees were fixed for the task, irrespective of the number of hours
spent, so to some extent
referees
could manage the total time spent and
increase their ability to take on further commitments by doing so. They also
had full responsibility for managing their own fitness and for pre-match
preparation. In addition, by officiating at more matches they would also obtain
a greater return on overall time spent, bearing in mind that they were not paid
for their own fitness training.
173. To the extent relevant, PGMOL and, for the
most part, the referees
did not consider that the relationship was one of
employment. However, the
referees
did officiate wholly or substantially for a
single engager, with a significant degree of continuity in most cases, and
generally also performed a significant number of engagements for PGMOL
involving a material commitment in terms of hours worked. It is also the case
that the
referees
were relatively integrated into the PGMOL organisation, being
seen as “part and parcel” of the PGMOL organisation. We are mindful of Nolan
LJ’s suggestion in Hall v Lorimer (at page 218) that, for an individual
who carries on a profession or vocation, the extent to which he is dependent or
independent of a particular paymaster for the exploitation of his talents may
well be significant. In this case that factor would point towards employment
status.
174. Standing back as we are required to do, our
conclusion is that there was insufficient mutuality of obligation and control
in the individual engagements to amount to employment, even though the level of
integration, the hours worked, the fact that the referees
could not obviously
be described to be in business on their own account and the fact that PGMOL was
their only or primary paymaster in their
refereeing
activities, are elements
that may be suggestive of an employment relationship. Our conclusion is that individual
appointments to matches were engagements to perform the task of officiating at
the match in question for a fee, and not contracts of service.
175. Mr Maugham submitted that, even if PGMOL
had an employment relationship with the referees,
it was not liable for PAYE
and NICs. Given our conclusion that there was no employment relationship it is
not strictly necessary to address this point, but we will make some comments in
case the issue becomes relevant on any appeal.
176. For PAYE purposes, Mr Maugham submitted
that regulation 21 of the Income Tax (Pay As You Earn) Regulations 2003
(“regulation 21”) imposes obligations to deduct tax on the employer only when
the employer makes the relevant payment. This is modified by s 687 ITEPA, which
provides that where an “intermediary” makes a payment the employer is to be
treated as making that payment for the purposes of the PAYE regulations. So far
as relevant here, “intermediary” is defined as a person acting “on behalf of
the employer and at the expense of the employer”. Mr Maugham argued that the
EFL was making payments to referees
as principal, under its Standing Orders,
and so was not an intermediary. Mr Nawbatt submitted that the EFL did fall
within s 687, but that R (oao Oriel Support Ltd) v HMRC [2009] STC 1397
also showed that it was not necessary to go that far.
177. We do not propose to comment on the Oriel
case, beyond noting that whilst the thrust of the reasoning – that PAYE in
respect of payments received by employees in their capacity as such should be
accounted for under the PAYE reference
of the employer and not that of a third
party – appears supportive of HMRC’s position, the issue in that case was
different, and in particular it was not disputed that the relevant employer was
under a liability to account for PAYE. However, we do consider that the EFL was
making payments “on behalf of and at the expense of” PGMOL, so that s 687 ITEPA
would in any event apply. We have concluded that the payment process was simply
payment processing machinery. The expense was borne by PGMOL through the
recharge, and we also consider that the EFL made the payments on behalf of
PGMOL, discharging its liability. The statement about payment in the EFL’s
Standing Orders is no more than a factual description of the payment
arrangements.
178. The position in relation to FA Cup matches is less clear. For relevant periods payments were made by the FA and not recharged to PGMOL. It was confirmed in submissions at the end of the hearing that these amounts are not reflected in the regulation 80 determinations and section 8 decisions (although it was not disputed that the Tribunal has power to increase them if appropriate). However, Mr Maugham also accepted that the burden was on PGMOL to show that these payments were not at PGMOL’s expense, and conceded that it had not produced evidence to do so.
179. For NIC purposes it is clear that the
basic rule is that the employer is liable whether or not it makes the relevant
payment, unless that is altered by a specific rule. PGMOL’s case, as developed
during the hearing, was that paragraph 2 of Schedule 3 of the Social Security
(Categorisation of Earners) Regulations 1978 was such a rule and applied here.
However, this analysis would require PGMOL to be treated as an “end client” and
the EFL as a “UK agency”, with the referee
providing services to PGMOL “under
or in consequence of” a contract between PGMOL and the EFL. This does not seem
to us to be an apt description of the arrangements:
referees
provide their
services to PGMOL under the contracts they have with PGMOL. The fact that PGMOL
would not need these services but for its commitments to the EFL (and its
commitments to its other members) is in our view not sufficient to alter the
analysis.
180. We have concluded that the National Group
referees
were not employed under contracts of service during the periods under
appeal, and therefore the appeal is allowed.
181. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Rules. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.
[1] Level 2 is sub-divided into Levels 2A and 2B.
[2] During the period under
appeal there was a single Select Group of 17 referees.
Since that time the
Select Group has been divided into Select Group 1 and Select Group 2, totalling
35 employed
referees,
with Select Group 2
referees
primarily
refereeing
Championship matches. This has resulted in a smaller National Group (the group which
is the subject of this appeal), who now primarily
referee
games in Leagues 1
and 2.
[3] At professional level, a
game has four match officials, namely the referee,
two assistant
referees
who
act as linesmen, and a Fourth Official. National Group
referees
would act as
referee
or Fourth Official, but not generally as assistant
referees.
[4] This reflects FIFA
regulations, which require member associations like the FA to establish a
Referees
Committee, and require it to have exclusive control over
refereeing
organisation, regulation and development. Effectively the FA outsources part of
this function to PGMOL.
[5] Below Level 3 this is
dealt with by attendance at a basic referee
course and through
referee development
sessions, but on promotion to Level 3 there is a mandatory test which must be
passed.
[6] Strictly now part of its Articles, s 28 Companies Act 2006.
[7] This is regarded as an important matter given the risk of inappropriate influence, bribery and so on, including the perception of it. TVs must also not be used.
[8] Match expenses were and are borne by the home clubs and re-claimed by them from the FA.
[9] The email refers to Code of Conduct, but this was a typographical error.
[10] The EAT’s decision was approved by the Court of Appeal at [2013] EWCA Civ 1171.