The annual circus that is UK football’s summer transfer window is fast approaching and many struggling clubs (and their supporters) are looking for a significant turnover of players in the hope of a better season ahead. In last summer’s Scottish football transfer window the top 12 clubs managed to get close to 200 players out the door, while English Premier League clubs’ collective spending passed £1bn for the first time – showing the huge market at play. Here, Paman Singh, legal adviser at Law at Work, tackles the complex legal processes at play in clearing out players.
Like most employees, football players have several protections from unfair working practices, including dismissals, but there are some unique differences for their employers (and those supporters calling for change) need to consider. Finding a suitable suiter is the biggest challenge. The market value of a playing squad can diminish following a difficult campaign, particularly one finishing in relegation, allowing the vultures to pick off players for a modest fee. Clubs, facing a drop in income and sometimes saddled with unsustainable costs, may have to cut their losses and accept offers which do not necessarily match their valuations.
When no suitors are found for a player that a club does not want to keep, the situation becomes more complex. Contracts will normally be for a set period or, possibly up to five years, leaving clubs having to buy out some, if not all, of the remaining period of the contract. Putting aside a player’s loyalty considerations, these players are employees who have not committed any act of misconduct and, therefore, the club does not have a unilateral right to dismiss them or end their employment.
Whilst generally employees with less than two years’ service cannot make a claim for unfair dismissal, footballers have significantly more protections written into their contracts. Therefore, clubs are often required to disproportionately compensate players to end their employment (even if they have less than two years’ service), making this an unattractive and expensive option, even for the most prosperous clubs.
The final option left open to clubs is to enter settlement discussions which involves both the club and the individual meeting on a ‘without prejudice’ basis and discussing a financial compensation package that would result in the immediate end of the employment relationship. To give up their employment law rights, the player would be offered a lump sum of money to essentially ‘walk away’. A normal employee could expect to receive the equivalent of their notice pay, a sum in respect of any accrued but unused holidays, and an ‘ex gratia’, tax free, payment – usually a little bit over what their statutory redundancy pay would be.
However, footballers will have a generous notice period and a range of other costly fringe benefits such as flights, appearance fees, goals, clean sheet and win bonuses, European qualification bonuses, a relocation and car allowance. Therefore, any lump sum payment to agree a mutual termination would need to consider all the bells and whistles that accompany a modern-day footballer’s contract.
Given this, in any negotiation scenario the players will usually have the stronger bargaining position and, purely as an employee, may be understandably reluctant to forego a potentially career-high weekly income and could conceivably dig their heels in and refuse to accept any settlement agreement. Without a sale or transfer, the club’s options are then limited. Some teams have forced unwanted players to train with the youth teams and refused to play them, effectively reducing the player’s earning capacity at their next club, though again care must be taken to avoid the clubs treating the player so poorly that a constructive dismissal claim becomes a possibility.
So, while the temptation, at the end of a poor season, might be to purge the club of its playing staff, it is not as easy as that may seem. In the age of modern football, it all comes down to the player’s financial and legal advisers – a sobering fact for football fans everywhere.