News & Insights

The Super League – Super employment law problems?

The proposed new European Super League has resulted in commentary from football pundits, regulatory bodies, governments and even Prince William, the Duke of Cambridge. However, the question that everyone is really asking is what are the employment law implications?

Whilst the new Super League faces a number of legal challenges, the potential problems that could arise with both their playing and coaching staff should not be underestimated. The players of any top-level football club form an important part of the club’s assets, not only in terms of on-pitch success, but also in terms of resale value and in links to other sources of income, such as sponsorship opportunities.  If the players were to seek to escape the terms of their current contracts then that could have serious financial implications for the 12 founding clubs that may be difficult to offset, even with the financial rewards that the Super League offers.

The first thing to note when talking about employment law and top-level professional footballers, is that a claim of unfair dismissal (whether following an actual or constructive dismissal) is often no remedy at all.  The fact that unfair dismissal claims have a capped value of £89,493 means that they offer little or no remedy to footballers whose weekly wage will often far exceed that sum. Accordingly, when looking at potential remedies for top-level professional footballers in an employment context, we are mainly looking at breach of contract claims which have an uncapped value.

This leads us to the main issue:  Will the actions of the 12 founder members in establishing the Super League constitute a breach of the players’ employment contracts?

We need to consider two elements, express and implied contractual terms.

In this context, we can expect the express terms of the contract to be set out in a formal employment contract between the club and the player.  The terms of employment contracts will differ, but we understand that there are express terms in the standard Premier League employment contract that prevent clubs from taking any actions that will stop players from competing in international tournaments and that compel clubs to comply with the rules of FIFA, UEFA and the FA.  There needs to be an analysis of the individual contracts and the applicable regulations to determine whether or not the actions of the clubs in joining the Super League would constitute a breach of those express terms.  It is likely that the clubs will argue that they have not prevented their players from playing in international competitions and this is actually the actions of the football authorities.

However, even if we assume there is no breach of the express terms of the contract, we still need to consider if there is a breach of any implied terms.  There is a clause implied into every employment contract that the employer must not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and the employee. This clause can cover, and prevent, all sorts of actions that may be taken by an employer ranging from negative comments about employees, bullying and abuse, and inequitable pay raises and bonuses.

It is possible that the players could argue that the decision of the club in seeking to join a new Super League is in itself a breach of this clause or, alternatively, that the manner in which that change has been handled and communicated is a breach. It might be difficult for players to argue that the clubs right to join the Super League is prevented entirely by an implied term in their employment contracts, but they could have a stronger argument based on joining such a league without notice or consultation.  It is likely that the decision will have a material impact on the players which may be financial if participation in international competitions is prevented and sponsorship is affected, or if their reputation is damaged.  Players may therefore seek to attack the process and the lack of consultation, rather than the decision itself.

If we assume that the players are able to establish, or at least argue, that there has been a breach of their employment contract, then what are their remedies?

In very simple terms there are two potential remedies for an employee where there has been a breach of contract.  They could remain in employment and seek to recover damages for the loss they have suffered or they could seek to bring a constructive dismissal claim.  A constructive dismissal claim would arise where there has been a fundamental breach of contract by the employer, the employee has not waived or accepted that breach and they have resigned in response (normally with immediate effect).

It is that second claim, for constructive dismissal, that would be of most concern for the clubs.  The reason being is that not only could it give rise to players seeking financial compensation, but it could also allow them to terminate their contract with immediate effect.  This would mean that they would no longer be bound by the relatively long fixed term contracts that are common for top-level footballers and they could instead join another team of their choosing, without the payment of any transfer fee.

It should be added that such actions would not be without risk for the player.  The club would almost certainly seek to hold them to their contract and would not accept them leaving and joining another club.  The club could counterclaim against the player for breach of their employment contract (by failing to honour the fixed term) and the considerable losses that they may suffer as a result. They may also seek injunctive relief to prevent the player from playing elsewhere.  Such counterclaims are relatively rare in employment law, as often the counterclaim does not have any real value or the employee is unlikely to be able to pay damages, even if they are awarded, but neither of those issues would be a factor here for loss of a top-level footballer.

The above scenarios assume that there are serious implications for the players as a result of the clubs joining the Super League, namely their exclusion from international competitions, which may not materialise.  However, that does not necessarily mean that there will not be other issues to resolve.  Most of the incentive schemes for Premier League footballers are drafted with reference to performance in the existing competitions, such as the Premier League and the Champions League. If the clubs are no longer competing in those competitions then it will need to be determined if the bonus clauses can be construed against performance in the new competition, or that they need to be renegotiated entirely. If players believe that the Super League will be financially advantageous to the clubs, they may well seek to negotiate improved bonus terms. Whilst this scenario is less serious than players and key assets leaving without a transfer fee, the prospect of renegotiating bonus terms with all affected players and their myriad of agents may not be the simplest process either.

The reality is that the employment law implications of the new Super League may well be just one legal headache that the founding clubs need to resolve. It is quite possible, depending upon the actions of the football authorities, that they may also be facing legal challenges in respect of competition laws and battles over restraints of trade. Whilst the players contracts may not be top of the list of concerns for Super League CEOs currently, it is an issue that is not insignificant when you consider the value of those players and their contracts to the clubs.

Whether you are a Super League club looking for employment law advice, or you are just a normal organisation needing practical assistance on more general employment law issues, then don’t hesitate to get in touch – Ian Machray: [email protected]/ +44(0)118 951 6225.