EU Employment Law an obstacle to footballers' calls for quota system in England

Published 21 October 2013 | Authored by: Neil Johnston, Will Hampshire

When Greg Dyke was appointed as the new Chairman of the English Football Association (FA) earlier this year, he declared that the organisation's primary responsibility was to give the nation a successful English football team, and that on past record they had not done as well as they should have done. What we needed, Dyke suggested, was more English players playing in the top tier of English football, the Premier League.

In the following months, many ideas were floated as to the best way of achieving this aim. One suggestion, that has gathered growing support over the last week, is the introduction of a quota system to ensure there is a minimum number of English home grown players playing in any one game. Ex-England players Glenn Hoddle and Gareth Southgate are the latest to lend their support. Hoddle is also a former England manager and was recently appointed on to the FA Commission, set up by Dyke, that has been tasked with examining ways of increasing the number of young English players playing at the top level, and ultimately improving the prospects of the national team. Southgate is the current England Under 21 manager and has wide ranging responsibilities in relation to youth development.

The proposals are arguably a short-term fix and there are of course questions over whether introducing a quota will just make it easier for players that were otherwise not deemed good enough, to play regularly in the Premier League, rather than actually increase the quality of the national team. However, the real obstacle to the quota proposals, as alluded to by both Hoddle and Southgate, lies in EU employment law.

Article 45 of the Treaty on the Functioning of the European Union (TFEU) provides for the freedom of movement for workers within the EU, and in particular "the abolition of any discrimination based on nationality between workers of Member States as regards employment, remuneration and other conditions of work and employment".

Historically, the FA and the football associations from other EU countries had agreements in place with the EU Commission that allowed the number of "foreign" players, i.e. those that did not qualify to play for the national team of that particular country, to be limited. Up until 1995, the so called "3 + 2 rule" existed, whereby national associations were permitted to limit the number of foreign players clubs could field in any one game to three, plus two players that had played in the relevant country uninterrupted for a period of five years. However, the European Court of Justice (ECJ) delivered a landmark judgment in 1995 that turned this position on its head.

In the case of Union royale belge des sociétés de football association ASBL -v- Jean-Marc Bosman, which is more often remembered for allowing players to move at the end of their contract without a transfer fee being paid, the ECJ also held that the use of a quota system was incompatible with EU law as it constituted an obstacle to the freedom of movement of workers within the EU. Since then, no quotas have existed in any of the leagues of the EU Member States. In England, this has resulted in a notable decline in the number of English players playing regularly in the Premier League. Recent statistics have suggested that English players accounted for less than a third of all minutes played in the Premier League last year. It is worth noting, however, that the top leagues in the other EU countries have not seen such an effect.

Combining these statistics with England's poor showings at recent major competitions paints a gloomy picture, and provides the rationale for the recent calls for a reintroduction of a quota system. How much this support will change following England's qualification for next year's World Cup in Brazil, is unknown. However, it is difficult to see how such a system can coexist with the freedom of movement principle enshrined in EU employment law.

Mark Palios, a former FA Chairman, has suggested that a quota system could be put in place despite the legal restrictions. Palios compared the situation to how football operates in relation to insolvency, pointing out that "paying all the football creditors off before anyone else, flies in the face of insolvency law".

To the extent that Palios is suggesting football could somehow exempt itself from EU employment law, the position seems pretty clear. In Bosman, the ECJ specifically held that the freedom of movement principle applied to clauses contained in the regulations of sporting associations which restricted the rights of other EU nationals to take part, as professional players, in football matches. Similar recent attempts to exempt football from European employment law have also failed. Football is an "economic activity", and therefore the football industry must comply with EU law in the same way as any other industry.

A quota system that places restrictions on the number of EU players that are eligible to play in a game will clearly create an obstacle to the freedom of movement of workers under Article 45 of TFEU. What is more at issue, is whether under EU legislation, such an obstacle is justified. The rationale in England for introducing a quota system is ultimately to improve the prospects of the national team. At this point it is important to consider that this very argument was put forward in Bosman for justifying a quota system. The ECJ's reaction was that whilst removing the restrictions would inevitably curb the chances of a player to play at the top level in his home country, it would at the same time increase the opportunities available for that player in the other EU countries.

And it is this point that perhaps best explains the current dearth of talent in the English game. For while home grown players in the other top European leagues, namely in Spain, Italy, Germany and France, routinely move to play for clubs abroad, the number of English players doing likewise is remarkably low. Whether this is because of language issues or a psychological reason is not clear, but it is an important consideration. It might be argued that the recently announced FA Commission, in their task to improve the national team, would do better concentrating on long term measures, such as putting the correct structures in place, focusing on player development from an early age, and looking at ways to encourage players to seek opportunities abroad, something Hoddle promoted in his Football Academy linking up with Spanish side Jerez Industrial, rather than seek a short term fix that is contrary to embedded principles of EU employment law.

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About the Author

Neil Johnston

Neil Johnston

Neil is a Director in the Employment & Pensions Department of Field Fisher Waterhouse LLP with considerable experience of contentious and non-contentious employment matters. Neil has advised a wide range of sports clients including sports funding bodies, football clubs, and sports marketing companies. He has also acted for individuals including a Premier League referee and player. Neil has significant litigation expertise, covering unfair dismissal, whistleblowing and all aspects of discrimination law. 

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Will Hampshire

Will Hampshire

Will is a Solicitor in the Employment & Pensions Department of Field Fisher Waterhouse LLP, working for a broad range of clients. Will has particular experience in Employment Tribunal claims, representing both employers and employees on a variety of matters including unfair dismissal and a range of discrimination claims. Earlier this year he assisted in defending a high profile racial discrimination claim brought against one of our clients.

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