The legality of fixed-term employment contracts in European professional football – The Müller case and beyond

The legality of fixed-term employment contracts in European professional football – The Müller case and beyond
Published: Friday, 09 December 2016. Written by Sven Demeulemeester, Alexander Vantyghem No Comments

Fixed-term employment contracts have been standard practice in professional football for decades. However, under EU labour law[1], an employment contract of indefinite duration remains the default form of employment relationship between employers and workers.

This principle was set out in and recognised by the framework agreement on fixed-term work (the “Framework Agreement”)[2] concluded by ETUC[3], Union of Industrial and Employers' Confederations of Europe (“UNICE”) and European Centre of Employers and Enterprises providing Public Services (“CEEP”) on 19 March 1999; it applies in all Member States of the European Union, following the adoption of the Council Directive 1999/70 of 28 June 1999 (the “Directive” – see the note at the end of the article for details of how EU directives bind Members States)[4].

The benefit of stable employment is viewed as a major element in workers’ protection,[5] whereas fixed-term contracts are deemed justified only if they respond to the needs of both employers and workers. Therefore, the Framework Agreement sets out the general principles and minimum requirements for fixed-term employment contracts by:

  1. improving the quality of fixed-term work through ensuring the principle of non-discrimination; and,

  2. establishing a framework to prevent abuse arising from the use of successive fixed-term employment contracts.

This article will take an in-depth look at the justification for having (consecutive) fixed-term employment contracts in professional football, by revisiting the widely-publicised case of German professional football player Heinz Müller case. Following on from this the article then analyses the impact of recent CJEU case law on the termination of fixed-term employment contracts in professional football. 

 

Müller: in search for an objective justification

When discussing fixed-term employment contracts in professional football, it should be noted that EU law is not opposed per se to fixed-term employment contracts. However, the Framework Agreement requires that any difference in the treatment of fixed-term workers has an objective justification. Whilst the Member States and social partners have a margin of appreciation in the matter, they are required to guarantee the result imposed by EU law.[6]

This requirement means that a reference to a national provision that merely authorises recourse to (consecutive) fixed-term contracts in a general and abstract manner is not sufficient. One can argue that there has to be an objective justification on the side of the employer to be “allowed” to offer an employee “only” a fixed-term agreement instead of an open-ended employment contract. It is necessary that reasons are provided on the basis of “precise and concrete circumstances characterising a given activity” to justify recourse to fixed-term contracts.[7] Such specific justification is considered necessary in the absence of which the effect of the Framework Agreement and the Directive would be made meaningless.[8]

The search for an objective justification was one of the main legal questions in a dispute between Heinz Müller, a German professional football player, and FSV Mainz 05, a Bundesliga team.

The Müller saga (Germany)

During the course of this dispute, the Mainz Labour Court (the “MLC”) shocked the German and European football community with a judgment[9] that could have had Bosman-like effects. Although the appeal ruling of the Rhineland-Palatinate Higher Labour Court (the “RPHLC”)[10] overturned this controversial judgment and put the European football community at ease, it should be noted that Müller has lodged an appeal before the Federal Labour Court (the “FLC”), where the case is currently pending.

The MLC’s and the RPHLC’s respective judgments were based on a national law implementing the Framework Agreement and the Directive but have, of course, significance for the wider discussion about whether a football activity is sufficiently specific to objectively justify recourse to (consecutive) fixed-term contracts.

Background

Heinz Müller is a (former) goalkeeper of FSV Mainz 05. He first signed a fixed-term employment contract with the club in 2009 for a three-season period. In 2012, he extended his contract for another two seasons, meaning his contract would end on 30 June 2014. The latter contract also contained a renewal option for the player and the club, which could be exercised only if Müller played a minimum of 23 Bundesliga games for the club in the 2013-2014 season. Unfortunately, Müller got injured and, hence, only played until the Bundesliga’s eleventh round of matches. Once fit to play, he was only fielded in the club’s second team and, therefore, did not reach the required mark of 23 Bundesliga matches. Subsequently, FSV Mainz 05 did not accept his request to exercise the option to extend his employment contract by one more year and the employment relationship ended on 30 June 2014.

The player, frustrated due to being fielded in the second team (allegedly in bad faith to avoid the renewal of his employment contract), then went to the MLC and demanded lost bonus payments and, more importantly, that his fixed-term employment contract be converted into a contract of an indefinite duration.

Müller claimed that his contract should be requalified as an employment contract of indefinite duration because the use of a fixed-term contract was not justified by an objective reason within the meaning of the German legislation, the club on the other hand claiming that there were sufficient reasons to argue that the fixed-term employment contract in this instance was objectively justified.

Objective grounds

According to German law, a fixed-term contract that exceeds a term of 2 years, as was the case for Müller, must have an objective justification for it not to be requalified as a contract of indefinite term.[11] Specifically, for professional footballers, the RPHLC ruled that a fixed-term employment contract could be justified on the basis of the “specific nature of the work”. 

Although the RPHLC stressed that every employment relationship had its particularities and that, hence, the specificity of the work must transcend the particularities inherent to any (normal) form of employment, it concluded that professional football was specific enough to justify recourse to (consecutive) fixed-term contracts.

First, the RPHLC referred to the uncertainty for a club regarding the timeframe that a professional football player can successfully be employed by that club (including factors such as: the possibility of injuries, a new manager bringing in a new tactical approach that makes the player less useful to the squad, player group “dynamics”, etc.).

Secondly, the RPHLC accepted the need for a football club to continually refresh the squad, by signing new players and/or introduce players from its own youth team. Indefinite term contracts would inflate the number of players, which in turn would impose an impossible financial burden on clubs.

Thirdly, the public’s need for change and variety was invoked. A reference was made to the entertainment industry and the need to accommodate the public’s craving for a new “flavour”. Fans allegedly want change and, hence, want to see different players over time.

Fourthly, the RPHLC considered that the players benefit themselves from the use of fixed-term contracts, since such contracts leave the players better protected against injuries and early contract termination. Furthermore, the RPHLC referred to the high salary that (some) professional football players are paid in return for their fixed-term contracts and the fact that the premature ending of such a contract paves the way for a transfer to another club (where the player may earn a higher salary).

Appeal of the RPHLC’s Müller ruling

The RPHLC’s judgment was met with a deep sigh of relief by the football community. Fears of a new Bosman-style judgment disappeared on the day of the ruling as the “specificity of sport” prevailed once more. This being said, Müller appealed the RPHLC’s judgment to the FLC, where, at the time of writing, the case remains pending. Given the criticism in legal doctrine on the RPHLC’s reasoning, it cannot be excluded that the ruling may be overturned.

Uncertainty at the time of hiring

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About the Author

Sven Demeulemeester

Sven Demeulemeester

Sven Demeulemeester is partner in ALTIUS' Employment and Sports Law department. Legal 500 describes Sven Demeulemeester’s approach as ‘the perfect balance between legal insight and business acumen’. Sven is also the head of ALTIUS' Sports Law practice, advising players, clubs and governing bodies on contentious and day-to-day matters in the sports industry.Sven is also member of l'Association Internationale des Avocats du Football.

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Alexander Vantyghem

Alexander Vantyghem

Alexander is a sports lawyer at Atfield. He advises both domestic and international clients on all aspects of Belgian and international sports law, and is particularly experienced in proceedings before the FIFA decision-making bodies and the Court of Arbitration for Sport in Lausanne.
 
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