The UK’s Supreme Court has rejected the PGMOL’s appeal and remits the case back to the FTT.

The judgment blows the final whistle on mutuality of obligation (MOO) and control, finding that the FTT didn’t commentate on the other features, and has therefore remitted the case back to the FTT to make its findings based on the Court’s guidance on MOO and control, and that both of these factors were found to exist.

The court confirmed that there is a distinction between overriding or umbrella contracts (which govern continuous employment) and individual contracts (which govern single engagements).

Overriding contracts can be demonstrated by the continuing existence of mutual obligations to perform work, when required, and to pay for such work and that there needed to be mutual obligations in place, during the entire period said to be covered by the overriding contract.

However, the court highlighted that there are clear authorities establishing that there may be sufficient mutuality of obligation to satisfy one of the essential requisites of a contract of employment, even if the obligations subsist only during the period while the putative employee is working for the putative employer.

The judgement confirmed that there was sufficient mutuality of obligation in the period from the referee’s arrival at the ground on Saturday to the submission of their match report on the following Monday.  The right of either party to cancel the engagement without penalty that was irrelevant and that while the contract remained in being, the parties were under mutual obligations to each other and therefore those mutual obligations existed from the time of acceptance of the match.

For control purposes, not being able to intervene directly during the match, misunderstanding the test, and what is important is that for each separate contact, there needs to be a sufficient framework of control.

The employer is not required to have a contractual right to intervene in every aspect of the performance by the employee, and sanctions applied after the event would be sufficient.  This included the PGMOL’s right to penalise referees for breaches by denying them opportunities to officiate at future matches and by reducing, on account of their performance during the season, their right to share in the “performance or merit payment pot”, the size of which is fixed before the start of the season.

As the FTT found their there was MOO and control, they didn’t commentate on the ‘other’ factors, sometimes described as the business in own account tests, and therefore the Supreme Court has referred this case back to the FTT to make their findings on the basis that MOO and control existed in this case.

Conclusions

In terms of MOO, this case sets the precedence that where individual contracts require the employee to provide his or her personal service in return for payment by the employer during the period when the employee is working for the employer, this is sufficient for MOO to exist and it is irrelevant if either party has the right to cancel without a penalty, as those mutual obligations existed from the time of acceptance of the match, unless the engagement was terminated.

On control, it was confirmed that while there are many circumstances in which an employer cannot step in during the performance of an employee’s obligations, particularly if special skills are involved, it is not decisive of control.  The Supreme Court agreed with the UT judgement that

“Provided that the right to give directions relates to the performance of the employee’s obligations during the subsistence of the contract, it is not to be disregarded because there is no ability to step in and give directions during the performance of the obligations (where the nature of the obligations precludes it) or because the sanctions for breach of those obligations could only be imposed once the contract has ended. The existence of an effective sanction (irrespective of when its impact would be felt by the employee) is sufficient to ensure that the employer’s directions constitute enforceable contractual obligations”.

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