Employment law changes and professional sport

The raft of employment law changes being introduced by the government will have a major effect in the arena of professional sport. 

Unfair dismissal protection from the outset 

One of the headline employment law changes to have been announced is the introduction of unfair dismissal protection as a statutory right from day one, rather than the employee having to complete two years of continuous employment service to qualify for this level of protection. 

Professional sport contracts are however predominantly for fixed-term periods reflecting the seasons, with the fixed-term period normally being a season or multiple seasons, each spanning the period from 1 July to 30 June in professional football and rugby. Similarly elite football managers and coaches are also predominantly engaged based on lengthy fixed terms, securing their commitment to the team for multiple seasons. 

If terminated earlier, outside the scope of the contract terms, a player or manager’s primary (and normally much higher value) leverage is often a claim for wrongful dismissal, i.e. dismissal in breach of contract rather than unfair dismissal. 

That said, there are publicly reported instances of high-profile managers separately pursuing an unfair dismissal compensatory award, in addition to a multi-million-pound wrongful dismissal claim. 

The professional sport approach in practice 

It is important to note that the non-renewal of a fixed-term contract when it reaches its expiry date still amounts to a dismissal in the law, and an employer club is strictly obliged to show that they have a fair reason and that they have followed a fair procedure. A fair reason could potentially be ‘some other substantial reason’, alongside the other prescribed fair reasons (such as misconduct, capability, etc). 

This is a good opportunity to highlight the approach of professional sport in practice and, by example, the specificity of professional football, with the contract acknowledging the special characteristics of this type of employment. 

In the standard form Premier League football contract a specific formula is agreed at the outset with the player if their contract is not renewed on its agreed expiry date on 30 June. This triggers an additional top-up payment for the month of July, allowing the player to unlock an extra payment. 

The relevant standard Premier League contract clause provides: 

‘If by the expiry of this contract the Club has not made to the Player an offer of re-engagement on terms at least as favourable to the Player as those applicable over the last twelve months of this contract (or the length of this contract if shorter) then subject to clauses 19.1 and 19.3 the Player shall continue to receive from his Club (as a separate payment representing compensation as more particularly referred to in the Code of Practice) a payment equal to his weekly basic wage (at the average amount of his weekly wage over the preceding 12 months of this contract or the whole of this contract if shorter) for a period of one month from the expiry of this contract or until the Player signs for another club, whichever period is the shorter, provided that where the Player signs for another club within that period of one month at a lower basic wage than such average then such payment shall in addition include a sum equal to the shortfall in such basic wage for the remainder of such period’.