Footballers’ rights: early bath for transfer system?

by James Severn & Alex Brooks

Professional footballers’ union FIFPro has dropped its claim against FIFA, which it first took to the European Commission in September 2015. The complaint brought by FIFPro raised serious competition law questions by suggesting that the current player transfer system breaches European competition law. Specifically, FIFPro complained that the transfer system in its current guise “fuels and sustains increasing competitive and financial disparity, invites commercial abuse by third parties and agents and fails to protect players against abuses of their labour contracts via systematic non-payment [of wages].”

FIFPro and FIFA have now entered into a 6-year “cooperation agreement” in return for FIFPro dropping its complaint; however, there are a number of significant questions that remain unanswered.

Suggested new rules

All parties concede that sport, and football in particular, raises specific issues in relation to competition law that set sport apart from other industries in the context of competition law. Perhaps unsurprisingly, given its status as a union, FIFPro focussed its complaint upon the question of player welfare, and it appears likely that players’ rights will be given prominence in any new rules introduced by FIFA.

It has been suggested that the rules will allow players to terminate their playing contracts if they go unpaid for 2 months. If this is right, the certainty that this will give to players is clearly a positive development for players’ rights. Currently, under Article 14 of the FIFA Regulations on the Status and Transfer of Players, a player can terminate their contract for “Just Cause”; however, the decisions taken by the FIFA Dispute Resolution Chamber (“DRC”) and the Court of Arbitration for Sport (“CAS”) have to date provided no firm guidance as to how long a player has to go unpaid in order to establish a “Just Cause” for termination. Although the introduction of an express rule allowing players to terminate their contract after 2 months without pay would be a step in the right direction, it is difficult to imagine another industry that would expect an employee to provide his services for 2 months without remuneration. FIFA and FIFPro have also suggested that “abusive conduct” (such as forcing players to train on their own) will allow a player to terminate their contract. This is an interesting development and we must now wait to see how “abusive conduct” is defined in the new rules and whether this will differ, in practice, from “Just Cause” in the existing Regulations.

The announcement that players will be given swifter access to justice when they are mistreated or unpaid is also positive, although we do not yet have details of the specific rule changes that will be made following the accord between FIFA and FIFPro. It is clear, however, that the current method for determining disputes within FIFA is not practical in the context of players’ contracts, with significant delays in the DRC and CAS the norm.

Comment

From a players’ perspective, the announcement made by FIFA and FIFPro in the wake of the signing of their cooperation agreement is encouraging. They have, however, had a number of years to reach agreement on the transfer system and player rights, but have only so far managed to agree to constitute a committee to consider what changes should be made. It seems likely that we are only at the start of a journey to reform.

As regards the transfer system, Philippe Piat, President of FIFPro, has said that FIFPro intend to start work with FIFA immediately to reform and restructure the system that is currently in place. Gianni Infantino, president of FIFA, has been more measured in his response, but he has acknowledged that work with FIFPro must start now. Significant change will be difficult. Powerful stakeholders within the football family have an interest in the status quo, not least because the value of assets (these of course being the players themselves) could depreciate with a wholesale change in the transfer system. Nevertheless, it appears that FIFPro consider there to be a realistic prospect of bringing about change in the transfer system, given the significant step of dropping their complaint in the European Commission.

Whilst there has been great fanfare from FIFA and FIFPro about the agreement that has been reached, it remains to be seen what exactly the practical outcomes of this will be. Any changes are likely to be good for players, but it is relatively low-level changes to players’ rights of the sort discussed above that are more likely to be seen in the coming months,  rather than a more fundamental change to a transfer system around which whole industries have been built and are sustained.

If you have any questions about any of the issues raised in this article, please contact James Severn or Alex Brooks of the Thomas Cooper Sports team.

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