Despite prophecies of doom: no employment law revolution in professional sport

Daily newspapers are currently giving a lot of coverage to a professional athlete who has dared to seek justice before the Mainz Labour Court and are prophesising the end of professional sport. However, just as the Bosman ruling of the ECJ did not mean the end of professional football, the “Müller” case will not lead to the end of professional sport in Germany either. So what happened?

It has been standard practice in professional sport to enter into fixed-term employment contracts (often every two, three or five years). This was justified on the basis of the job’s nature (Section 14 (1) No. 4 of the German Part-Time Work and Fixed-Term Employment Contracts Act (Teilzeit- und Befristungsgesetz – TzBfG). Due to the physical deficiencies of athletes as they get older and the crowd’s desire to see new players, professional sport is seen as being subject to a “wear and tear element” (most recently Nuremberg Regional Labour Court, judgement of 28.03.2006 – Case No. 7 Sa 405/05).

Decision of the Mainz Labour Court

With its judgement handed down on 19 March 2015 (Case No. 3 Ca 1197/14), the Mainz Labour Court has now again confirmed that employment contracts of top athletes can also only legally have a fixed term within the boundaries provided for by the German Part-Time Work and Fixed-Term Employment Contracts Act. According to the judges in Mainz, the job’s nature and the uncertain development of a professional footballer’s performance do not per se justify any limitation of the term of an employment contract. This decision, which is not yet final and has to date only existed as a press release, was based on the following case:

The plaintiff was employed by the Defendant, a Bundesliga club, as a professional football player initially on the basis of a three-year contract. After his first contract expired, the parties entered into another fixed-term contract for another two years. The defendant club had not at this time offered the player, who was already thirty-four years old, a permanent contract because, in its opinion, the player’s expected performance was uncertain. The club also argued that fixed-term contracts were the industry standard. With the plaintiff not having been a regular fixture as goalkeeper in the team’s line-up in the last year of the contract, he was not offered a new contract. The goalkeeper then filed an action to have the fixed-term contract turned into a permanent contract, requesting the court to establish that his employment contract existed as a permanent employment contract due to the previous limitation of its term being invalid.

The Mainz Labour Court ruled in his favour. In the opinion of the court, the general rules which apply for employment contracts also apply for employment contracts entered into with professional athletes. The court stated that the most recent limitation of the contract’s term was therefore invalid and his employment contract existed permanently in light of the following:

A limitation of the employment contract without a valid reason was no longer possible because the maximum period of two years for a limitation without a valid reason had already been exceeded. According to the judges, the defendant football club had not to the satisfaction of the court presented any valid reason why the most recent employment contract should have a fixed term, as is required by Section 14 (1) of the German Part-Time Work and Fixed-Term Employment Contracts Act for a further valid limitation. (This apparently also applied to other alleged valid reasons relating to the person concerned, such as the professional footballer’s own wish for a fixed-term contract).

Practical impact

The German labour courts have in recent years repeatedly pointed out that professional sport is not a legal vacuum for which special rules apply. In accordance with established case law, professional athletes are the employees of their clubs. The decision of the Mainz Labour Court is in line with established case-law practice. The legislator only permits fixed-term employment contracts if material reasons for these exist and for a maximum of two years if a material reason does not exist.

If one only reads the press release of the Mainz Labour Court superficially, one could actually be concerned that the judges in Mainz want to shake up professional sport: if the industry-standard limitation of employment contracts based on the “wear and tear element” and the “job’s nature” is considered invalid, even in professional sport, the only remaining alternative would be – apart from few exceptions – the classic approach of terminating permanent employment contracts in observance of a contractual or statutory notice period. This would, however, probably be a hard road for all concerned because terminating a professional athlete’s employment contract for reasons of conduct based on intentional sporting failures will probably often be unsuccessful due to an inability to provide evidence of deliberate misconduct. Termination of employment based on personal capacity, on the other hand, is only socially justified if the employee no longer has the personal aptitude or skills to carry out the work performance owed.

Does this now mean that a warning or notice of termination is now to be feared after every lost tackle, every wasted chance to score a goal or every alleged mistake on the part of the goalkeeper? This cannot be what the judges in Mainz wanted. If the press release is read more closely, it seems more likely that this decision is intended as a wake-up call for professional sport to not only be professional at the sport in question itself, but also when it comes to drafting, fulfilling and terminating contracts. When negotiating contracts, besides reaching agreement on salary, transfer money and an exit clause, would it not make sense to also carefully discuss the contractual term and the grounds for entering into a fixed-term contract, which is often wanted by both sides, and then also to include these in the contract?