Introduction
The first part of the present blog article provided a
general introduction to the compatibility of fixed-term contracts in football
with Directive 1999/70/EC[1]
(Directive). However, as the Member States of the European Union enjoy a
considerable discretion in the implementation of a directive, grasping the
impact of the Directive on the world of football would not be possible without considering
the national context. The recent ruling of the Arbeitsgericht Mainz (the lowest
German labour court; hereinafter the Court) in proceedings brought by a German
footballer Heinz Müller provides an important example in this regard. This second
part of the blog on the legality of fixed-term contract in football is devoted
to presenting and assessing the Court’s decision.
I. Facts and Procedure
Heinz Müller, the main protagonist of this case, was a goalkeeper
playing for 1.FSV Mainz 05 a club partaking to the German Bundesliga. He was
employed by the club as a licensed football player since 1 July 2009. His first
3-year contract ended on 1 July 2012 and was renewed for two years until 30
June 2014. It included an option for a one-year extension if the player took
part in a minimum of 23 Bundesliga fixtures in the 2013/2014 season. Despite a
good start of his last season (he participated in 10 out of the first 11
games), Heinz Müller got injured and was then set aside from the professional
team and relegated to the reserve team. He attributed this relegation to the
despotism of his manager and the fall-out in their professional relationship.
Due to this relegation to the reserve team, he was unable to attain the 23
Bundesliga games necessary for a one-year prolongation of his contract, which
ended on 30 June 2014. Thus the player decided to bring 1.FSV Mainz 05 to court
claiming both the payment of the bonuses he would have obtained if he had been
allowed to continue playing with the Bundesliga team and the establishment by
the tribunal that his employment contract was an indefinite contract and,
therefore, still valid.
In its ruling,[2]
the Arbeitsgericht Mainz gave way to his demand that the contract should be
qualified as an indefinite contract, though it refused to award him the lost
bonuses. The decision was widely commented in the mainstream German press (here, here and here), including the biggest German tabloid
Bild which featured a report on the case. Fears of a new ���Bosman”
started to spread in the German football community. The reactions have ranged
from utter incredulity from the part of the clubs, to calls for a true
collective bargaining agreement from the side of the players’ union. The ruling
was immediately appealed and it is likely that the appeal court will nuance the
decision rendered in first instance. Yet, this remains an important case
highlighting the relevance of the European rules regarding fixed-term contracts
in the realm of football. As we will see, it offers a suitable legal blueprint
to assess the potential impact of the EU directive on fixed-term work on
professional football.
II. Decision of the Court
The Court scrutinized the validity of the subsequent fixed-term contract
concluded between the club and the player against the Part-Time and Fixed-Term
Employment Act (TzBfG),[3]
the national law implementing the Directive, and in particular, Section 14(1)
thereof which provides that, in principle, contracts for a definite period are
allowed only when justified by an objective reason. Section 14(2) TzBfG,
however, stipulates that objective reasons are not required for fixed-term
contracts the duration of which does not exceed two years. After finding that
the said exception no longer applies to the contract concluded between Müller
and the club, the Court focused on Section 14(1) TzBfG which provides that an
objective reasons exist ‘in particular’ when i) the employer’s need is
temporary; ii) the definite period of contract is to facilitate the employee's
entry into subsequent employment following a training or study; iii) the
employee substitutes another employee; iv) the nature of the work justifies the
fixed-term of the contract; v) the definite period is to serve testing the
employee; vi) when grounds related to the employee himself or herself justify a
fixed-term contract; vii) the employee is to be paid from the budget intended
for fixed-term employment and he/she is employed on that basis; or viii) the
definite term of the contract is based on an amicable settlement before a
court. In this respect, the Court referred to both the Directive’s aim of
limiting recourse to fixed-term contracts, and the interpretation of clause 5 of
the Directive adopted by the Court of Justice of the European Union (CJEU) in Angelidaki[4].
Subsequently, the Court turned to the assessment of the validity of the
contract at dispute. Here, it first focused on the grounds related to the
employee’s personal status, and the nature of the work as provided under
Section 14(1) TzBfG.
A. The personal status
Concerning the former, the Court
indicated that neither the age of the employee, nor his wish to conclude a
contract for a definite period could constitute personal grounds in the case at
hand.[5] Moreover,
as the argument relating to the age of the player was brought up by the Court
and not the club itself,[6]
the Court elaborated only on the latter claim. In this regard, it provided that
a genuine interest in concluding a fixed-term contract exists when the employee
is offered a choice between a contract for a definite and indefinite term and
choses the former.[7]
According to the Court, the player’s wish to prolong his contract could not be
considered as pointing at the existence of such a genuine interest.[8] In
addition, the Court stated that Müller’s alleged interest in the flexibility of
his engagement by concluding a fixed-term contract could not constitute a valid
argument due to the fact that employees in general are not prohibited from
terminating indefinite employment contracts.[9]
B. The nature of the work
Next, the Court decided that the
subsequent fixed-term contract between Müller and the club may not be justified
on the basis of an objective reason relating to the nature of the work. The Court
referred to literature arguing, first, that it is necessary for coaches to
implement their vision through the choice of adequate athletes which in turn
requires flexibility in replacing players, and second, that contracts for a
definite period are needed due to the progressive decline of employees’
(players) ability to perform at a certain level throughout their careers.[10]
In this respect, the Court did not really address the first limb of the argument
and focused on the latter. Here, the Court referred to the established
jurisprudence according to which fixed-term contracts for coaches are
permissible due to the risk of degradation of the relationship between coaches
and athletes.[11]
Only in such a situation, according to the Court, can a fixed-term contract be properly
justified. Yet, the decline caused by the long-term exercise of a profession
was not regarded by the Court as a factor specific to football.[12]
Furthermore, the Court provided that, pursuant to both national and European
law, contracts for an indefinite period are the general form of employment, and
that specific interests of sports clubs, unlike those of broadcasters, press
and artists, have not been granted a protected status under the German
Constitution.[13]
By referring to the prohibition of discrimination based on age the Court also
declined to accept the club’s argument concerning age-related uncertainty as to
the quality of the work performed by the player.[14]
C. Other objective reasons
Lastly, the Court addressed the arguments concerning the customary
nature of fixed-term contracts in sports, the need to satisfy fans by changing the
composition of teams, the level of footballers’ remuneration, and the impossibility
to dismiss a player on a fixed-term contract. The custom of signing players for
a definite term contract was not deemed by the Court a valid justification
pursuant to Section 14 TzBfG.[15]
Changing the composition of teams according to the needs of supporters was
regarded as of minor importance, in comparison to the need to safeguard the
interests of employees.[16]
Also, high wages were not identified as a proper justification for the recourse
to fixed-term contracts since Section 14 TzBfG does not provide for such an
exception, and the higher level of remuneration is not capable of alleviating
the negative consequences connected to a lack of employment security.[17]
Lastly, the Court declined to accept the argument that the fixed-term period of
the employment agreement could be justified by the fact that the contract cannot
be terminated. According to the Court, the argument not only fails to fall
within the scope of Section 14 TzBfG, but also the impossibility for the
employer to terminate the contract does not provide an adequate counterweight
to the employee’s interest for continued employment.[18]
Based on all of the above the Court decided that the contract is of an
indeterminate nature, and therefore still valid.
III. A critical analysis of the judgment
The Court’s ruling is not entirely convincing. This concerns, in
particular, the Court’s failure to consider a number of factors which lay at
the core of football and are inherent to this particular activity.
A. The personal status
The rejection of the argument concerning the personal grounds connected
to the alleged wish of the player to conclude a fixed-term contract does not
seem to be controversial. An extensive interpretation of Section 14 TzBfG in
this regard could potentially be liable of considerably limiting the protection
afforded to fixed-term workers under European and national law. Moreover, in
its ruling the Court relied on previous case-law which indicates that for the
exception to apply it must be established that the employee concerned, when
granted a choice between a fixed-term and a permanent contract, would have
chosen the former.[19]
Therefore, the Court’s findings that, first, the player wished to prolong his
employment relation with the club, and second, that his interest in maintaining
flexibility could have been safeguarded under a contract for an indefinite
period, seem to exclude the possibility of applying the exception.
B. The nature of the work
The Court’s assessment of the existence of an objective reason stemming
from the nature of the work of a professional footballer is less convincing.
First, the Court failed to address the argument concerning the necessity of
maintaining flexibility as to the choice of players included in the squad.
Indeed, this flexibility is needed for a coach to be able to adapt and modify
its strategy over the years. In case of a change of the coach, a permanent pool
of players would necessarily drastically reduce the potential for variations in
the team’s strategy. This concerns not only the characteristics of footballers
in terms of their physical attributes and skills, but also their ability to
perform in several competitions which often requires playing a number of games
every week. Introducing contracts which would bind clubs to their players for
an indefinite period could thus be liable of ‘freezing’ football as a result of
the coaches’ limited abilities to experiment, adjust and improve line-ups, and
to implement new tactics. This situation should be considered analogical to the
one concerning artists and comedians. In this regard, the competent national
court indicated that fixed-term contracts for comedians and actors were
necessary to enable theatre directors to be flexible with regard to their
program.[20]
Second, by stating that work-related decline in output cannot justify
recourse to fixed-term contracts as it does not constitute a feature specific
to football, the Court explicitly aligned professional football players with
workers in other professions. The Court’s reasoning in this regard, together
with the Court’s findings that age-related uncertainty as to the quality of
work may not be relied upon as a justification for fixed-term contracts as it
constitutes discrimination on the basis of age, are problematic. In order to
exercise their profession football players, and sportspeople in general, are
required to maintain the highest level of physical fitness, a factor which does
not play a key role in many sectors or industries. It is common knowledge that
physical capabilities deteriorate with age, making it gradually more difficult
and challenging for athletes not only to preserve a high level of performance
but also, as mentioned above, to compete in several sporting competitions. One should
also mention that employers outside the sporting world are usually keener on
hiring individuals with considerable experience acquired during their
professional careers. However, the situation in the football industry is opposite.
While footballers improve their skills and broaden their experience with time,
aging is the very cause that undermines their ability to perform at the highest
level. This explains why football players over the age of thirty are often considered
as ‘old’, and provides the underlying rationale for granting shorter contracts
to such players. If deterioration due to age does not constitute a relevant
factor, why would clubs consciously decide to deprive themselves of the
possibility of securing long-term services of top thirty-plus footballers by
offering them contracts for periods shorter than those given to younger
players, and additionally, undermine their own ability to secure a future
transfer fee? The answers is simple: age-related physical decline constitutes a
specific factor inherent to the exercise of football, and disproportionately
important in comparison to other professions, which influences the capabilities
of players to perform, and thus, should not be disregarded as a specific
justification for the recourse to fixed-term contracts.
Third, and considering the above, the nature of the industry requires an
influx of young talents.[21]
In this regard, introducing permanent contracts as a standard would diminish
the possibility of young players having a chance to enter the market. Indeed,
one has to keep in mind that the football labour market is closed, with a
strictly limited number of employees due to the pre-defined number of
professional teams active on this market. Thus, the use of indeterminate
contracts would have the consequence of freezing the labour market and
drastically reduce the incentive to train young players and to improve the
squads.
Fourth, providing players with contracts for an indefinite period would
also entail the possibility for footballers to terminate their employment
agreements pursuant to statutory notice periods. Such an eventuality would
affect the stability of contracts between professionals and club, with negative
effects on clubs’ planning security in both sporting and financial matters.[22]
Fifth, the fact that contracts for an indefinite period are regarded as
the general form of employment and that interests of sport clubs have not been
granted protection under the German Constitution should not constitute a reason
for precluding the application of Section 14 TzBfG. In this respect, the social
partners indicated that ‘fixed-term contracts are a feature of employment in
certain sectors, occupations and activities which can suit both employers and
workers’.[23]
Also, the national implementing measure do not make reliance on Section 14
TzBfG conditional upon the employer falling within one of the sectors protected
under the German Constitution. On the contrary, the exception established
pursuant to national law seems rather broad. It refers to, inter alia, the nature of the work and the list of objective
grounds does not seem to be exhaustive.[24]
Sixth, the rejection by the Court of the argument concerning the
customary nature of the recourse to fixed-term contracts in football is not
surprising. However, the fact that the needs of the public (supporters) were
regarded as being of minor relevance is more questionable. The need to replace
players is based not only on the reasons mentioned above, but also necessary from
the perspective of maintaining a stable fan base and attracting new supporters
by, inter alia, increasing clubs’
competitiveness. Allowing flexibility in signing new players, and conversely in
parting with those footballers who are no longer (effectively) able to
contribute to the team effort, enables clubs to, at least, increase their
chances of success, and thus, fulfils the desires of the supporters. In this
respect, the Court mentioned itself that popularity of clubs depends on
sporting success. Therefore, it is unfortunate that the Court did not hesitate
to disregard this particular factor and failed to scrutinize it in more detail.
C. Other objective reasons
Arguments relating to high wages that professional footballers receive,
or the fact that an employment agreement between a club and a player concluded
for a definite period may not be dissolved have not been accepted by the Court
as constituting objective grounds justifying successive fixed-term contracts.
In this regard, it is difficult to criticize the Court. The Court correctly
pointed out that these arguments find no support in grounds explicitly
mentioned in Section 14 TzBfG. And even though the national law implementing
the Directive indicates that successive fixed-term contracts may be justified
based on ‘in particular’ the grounds enumerated in Section 14 TzBfG (which might be interpreted as not fully meeting the criteria established
in the CJEU’s case-law),[25]
thus leaving a possibility for employers to argue the existence of
justifications not covered by the provision, accepting such arguments could not
only threaten workers’ employment stability, but would also be liable of
undermining the system established for the purpose of preventing abuse stemming
from recourse to successive fixed-term contracts.
Concluding remarks
The ruling in the Müller case clearly illustrates that for the purpose
of evaluating the compatibility of fixed-term contracts in football with the
Directive it is absolutely necessary to assess its practical implementation at the
national level. In this regard, the focus of the legal debate, which the
present blog aspires to spark, has to be placed on the issue of successive
fixed-term contracts in football being capable of falling under the objective
reasons justification. It cannot be denied that a number of arguments
pertaining, in particular, to the specific nature of football as an economic
activity may constitute basis for retaining the current system. However, recourse
to such arguments will only be possible where national implementing measures
allow for it, which therefore implies a specific assessment of the situation in
each Member State. Moreover, in those Member States in which national laws
prevent objective reason justifications from being relied upon in the
professional football sector, successive fixed-term contracts could only be
valid through the introduction of amendments to national legislation, (broad) interpretation
of the applicable rules by national courts, or by providing room for social
partners to agree on a specific status of sports regarding fixed-term
contracts. The Müller case has undoubtedly kick-started a much-needed legal discussion.
Nevertheless, its intensity will probably depend on the substance of the appeal
decision in the Müller case, and whether or not similar cases will appear
before national courts outside of Germany.
[1] Council Directive
1999/70/EC concerning the framework agreement on fixed-term work concluded by
ETUC, UNICE and CEEP [1999] OJ L 175/43 (Directive)
[2] ArbG Mainz, AZ: 3 CA 1197/14, 13.03.2015 (Heinz Müller Judgment)
[3] The German text of the Teilzeit- und Befristungsgesetz is available in full
at https://dejure.org/gesetze/TzBfG
[4] Joined cases C-378/07 to C-380/07 Kiriaki
Angelidaki and Others v Organismos Nomarchiakis Autodioikisis Rethymnis,
Charikleia Giannoudi v Dimos Geropotamou and Georgios Karabousanos and Sofoklis
Michopoulos v Dimos Geropotamou [2009] ECR I-3071
[5] Heinz Müller Judgment, para 3.1.
[6] Ibidem
[7] Ibidem
[8] Ibidem
[9] Ibidem
[10] Ibidem, para 3.2.1.
[11] Ibidem
[12] Ibidem
[13] Ibidem, para 3.2.2.
[14] Ibidem
[15] Ibidem, para 3.2.3.
[16] Ibidem
[17] Ibidem
[18] Ibidem, para 3.3.
[19] BAG 19.01.2005, 7 AZR 115/04
[20] BAG 02.07.2003, AP
BGB §611 Nr.39. See also BeckOK TzBfG §14 at Rn. 55
[21] The CJEU held that considering the social importance
of sporting activities, and especially football, in the European Union the
objective of encouraging the recruitment and training of young players must be
accepted as legitimate and thus capable of justifying restrictions on free
movement of workers. See Case C-415/93 Union
royale belge des sociétés de football association ASBL v Jean-Marc Bosman,
Royal club liégeois SA v Jean-Marc Bosman and others and Union des associations
européennes de football (UEFA) v Jean-Marc Bosman [1995] ECR I-4921, para
106; Case C-325/08 Olympique Lyonnais
SASP v Olivier Bernard and Newcastle UFC [2010] ECR I-2177, para 39
[22] Diego F. R. Compaire, Gerardo Planás R. A., Stefan-Eric Wildemann,
‘Contractual Stability in Professional Football: Recommendations for Clubs in a
Context of International Mobility’, July 2009.
http://www.lawinsport.com/pdf/ContStabinProfFoot.pdf. Accessed 17 July 2015;
also FIFA regulations provide for rules introduced for the purpose of
facilitating contractual stability between clubs and players, see FIFA,
‘Regulations on the Status and Transfer of Players’, 2015, Chapter IV.
Maintenance of contractual stability between professionals and clubs
[23] Annex to the Directive, ETUC-UNICE-CEEP Framework Agreement on Fixed-Term
Work, recital 8
[24] Section 14 TzBfG indicates that objective
grounds exist ‘in particular’ in situations provided for in the provision. The
wording of the provision thus grants considerable flexibility to employers
[25] In case C-212/04 Konstantinos Adeneler
en anderen tegen Ellinikos Organismos Galaktos (ELOG) [2006] ECR I-6057,
para 72 the CJEU ruled, inter alia,
that regarding the concept of objective reasons as provided under the Directive
national provisions may not be of a purely formal nature, but must justify
recourse to successive fixed-term contracts ‘by the presence of objective
factors relating to the particular features of the activity concerned and to
the conditions under which it is carried out […]’