08 June 2020

Consequences of covid-19 on contracts, transfers and signings in football

Regarding the expiration of current contracts and the beginning of future contracts, FIFA suggests that they should be extended or postponed, respectively, depending on the new expiry dates of the current season and the beginning of the following season.

As for the suspension of contracts, FIFA suggests that the parties reach collective agreements, always respecting the national law and the collective labor regulations of each country.

In Portugal, according to the exceptional measures approved by the Portuguese Government because of the Covid-19 pandemic, clubs are entitled to resort to the exceptional measure of “lay-off”, either by suspending the contracts or by reducing the normal working period — with workers (in this case, players and also coaches with an employment contract) being paid a compensation equivalent to 2/3 of their normal gross remuneration, with a minimum of € 635 and a maximum of € 1,905.

In my opinion, taking into account the typical object of the sports employment contract concluded between a player and a club, it does not seem legit to suspend employment contracts, but only to reduce the normal working period, as clubs will always have the need to require players to continue training, so that they can maintain their physical condition at the proper levels of sports competition. On the other hand, taking into account the cases of players or coaches who earn a salary well above the mentioned maximum legal limit (of € 1,905), some clubs reached an agreement with their players and reduced their wages by 20% up to 50%, but no such legal limit is applicable, which would, in these cases, cause a drastic reduction in wages, well above 1/3 of their normal gross earnings.

In short, FIFA, confederations and national associations must combine efforts to find the most balanced solutions, especially taking into account the integrity of sports competition and the principle of good faith, and bring the legal certainty that can effectively prevent disputes that this situation can easily trigger. On one side, the national associations, using the public powers delegated to them by the respective State, should adopt clear rules on the legal effects that the suspension of sporting competitions and the possible extension of the current sporting season will have on all contractual relationships; on the other side, FIFA should approve binding rules regarding the players’ registration procedure and registration periods (transfer windows).

Only then will it be possible to prevent the scourge of legal uncertainty, which, itself, is restrictive of rights and freedoms and will certainly have a tremendous economic impact in the near future.

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