Introduction
On 25 March 2015, the Labour Court of Mainz
issued its decision in proceedings brought by a German footballer,
Heinz Müller, against his (now former) club 1. FSV Mainz 05 (Mainz 05). The
Court sided with the player and ruled that Müller should have been employed by
Mainz 05 for an indefinite period following his 2009 three year contract with
the club which was subsequently extended in 2011 to run until mid-2014. The
judgment was based on national law implementing Directive 1999/70 on fixed-term
work[1]
(Directive) with the latter being introduced pursuant to art. 155(2) TFEU (ex
art. 139(2) TEC). On the basis of this
article, European social partners’ may request a framework agreement which they
conclude to be implemented on the European Union (EU, Union) level by a Council
decision on a proposal from the Commission. One of the objectives of the framework
agreement,[2]
and therefore of the Directive, was to establish a system to prevent abuse
arising from the use of successive fixed-term employment contracts or
relationships[3]
which lies at the heart of the discussed problem.[4]
Two clauses enshrined in the framework agreement are of particular relevance to
the issue of fixed-term contracts in football, namely, clause 2 which governs
the Directive’s scope of application, and clause 5 which concerns measures to
prevent abuse. The main questions in this regard are therefore whether
fixed-term contracts in football may escape the application of the Directive
based on clause 2, or be compatible with it pursuant to clause 5. The present
blog post presenting the general European framework for fixed-term contract,
will be followed by an in depth case note on the decision in the Müller case.
I. Employment contracts in football and the scope of application of the
Directive (clause 2)
The second paragraph of clause 2
names specific types of employment relationships which the Member States, after
consultation with social partners, and/or social partners may exclude from the
scope of application of the Directive. Clause 2(2) does not contain any
explicit provisions which would allow for the possibility of football players’
contracts to be excluded from the scope of the Directive. Also, the wording of
the provision indicates that the list of the employment relationships covered
by the exception is exhaustive,[5]
which in turn precludes the possibility of interpreting the clause in a manner
which would accommodate contracts between football clubs and their players.
Clause 2(1), on the other hand, provides that
the Directive ‘applies to fixed-term workers who have an employment contract or
employment relationship as defined in law, collective agreements or practice in
each Member State’. As a result, the definition of ‘worker’ for the purpose of
the Directive has no autonomous meaning, but is subject to the national laws of
the Member States.[6]
Therefore, the manner in which the framework agreement has been drafted opens
the possibility for the Member States to exclude some categories of workers
from the scope of application of the Directive. It follows, that based on the
pure wording of clause 2(1) national authorities could theoretically deprive, inter alia, football players of the
protection granted under the Directive by merely classifying them as e.g. service providers.
Despite the autonomy granted to national
authorities in this regard, clause 2(1) may not be understood as providing the
Member States with unlimited discretion. Recital 17 of the Directive’s preamble
clearly states that the Member States are to define some of the terms included
in the framework agreement ‘provided that the definitions in question respect
[its content].’ Moreover, art. 2 of the Directive stipulates that ‘the Member
states are […] required to take any necessary measures to enable them […] to
guarantee the results imposed by [the] Directive.’[7]
The flexibility granted to national authorities is further limited by the need
to ensure the effective implementation of EU-derived rights. The Court of
Justice of the European Union’s (CJEU, Court) rulings set the limits to the
Member States’ discretion in the implementation of clause 2(1). In this regard,
the CJEU ruled in Del Cerro[8]
that the Directive is applicable to ‘all workers providing remunerated services
in the context of a fixed-term employment relationship linking them to their
employer.’[9]
The Court also stated that ‘in reserving to Member States the ability to remove
at will certain categories of persons from the protection offered by [the
Directive] and the [framework agreement], the effectiveness of those Community
instruments would be in jeopardy as would their uniform application in the
Member States.’[10]
Also, in the opinion of Advocate General (AG) Maduro the concept of ‘worker’
for the purpose of the Directive must be interpreted in a way which complies
with its objectives.[11] According to the AG, the Member States should
not be allowed to rely on the ‘formal’ or ‘special’ nature of the rules
applicable to certain employment relationships in order to exclude them from
the scope of application of the Directive.[12]
Consequently, excluding a specific group from the benefit of protection
afforded by the Directive can only be accepted if the competent national court
decides that the nature of the employment relationship concerned is
‘substantially different from that between employees falling, according to
national law, within the category of workers’.[13]
A similar reasoning to the one used in Del Cerro has been applied in Sibilio[14]
where the Court, relying on recital 17 and the need to preserve the Directive’s
effectiveness, ruled that in the light of the objectives pursued by the framework
agreement the formal classification by the national legislature cannot rule out
that a person must be recognized as a ‘worker’ if such a formality is merely
notional, and thus conceals the real employment relationship.[15]
Therefore, in determining what constitutes an employment contract or employment
relationship under national law or practice, and thus when determining the
scope of application of the Directive, the definition of these concepts may not
result in an arbitrary exclusion of a category of persons from the protection
offered by the Directive.[16]
The CJEU leaves it for the national courts to conclude whether a person falls
within the definition of a ‘worker’ based on the characteristics of the work
conducted and the circumstances in which it is carried out.[17]
Moreover, in Fiamingo[18]
and Mascolo[19]
the CJEU later confirmed that no particular sector is excluded from the scope
of application of the Directive.[20]
Even though the issue of who is to be
considered as a ‘worker’ pursuant to the Directive does not fall within the
competence of the EU, and thus, the definition established for the purpose of
the internal market provisions may not be directly applied in the context of
the Directive, the autonomous Union concept of ‘worker’ and the case-law of the
CJEU provide guidelines and support for the national courts of the Member
State. In this regard, the CJEU stated in Lawrie-Blum[21] that ‘the essential feature of an
employment relationship […] is that for a certain period of time a person
performs services for and under the direction of another person in return for
which he receives remuneration.’[22]
The Court elaborated on the matter in Trojani[23]
where it ruled that ‘any person who pursues activities which are real and
genuine, to the exclusion of activities on such a small scale as to be regarded
as purely marginal and ancillary, must be regarded as a worker’.[24]
It cannot be denied that footballers meet the criteria set out in the case-law.
The activity they pursue is genuine, they conduct their work under supervision
of others, namely clubs and coaches, and receive, often hefty, remuneration.[25]
It is also important to add here that already in Bosman[26]
the CJEU provided, first, that the existence of, or the intention to create, an
employment relationship is the only requirement necessary for the purposes of
the application of EU provisions concerning the free movement of workers, and
second, that football players could be regarded as workers for the purpose of
(now) art. 45 TFEU.[27] This
particular finding has been directly confirmed in Olympique Lyonnais.[28] It
is not precluded that such considerations should influence national courts in
their findings concerning ‘characteristics’ and ‘circumstances’ of the activity
exercised by football players should a question in this regard arise. As a
result, it seems unlikely that contracts between footballers and their clubs
could fall outside the scope of the Directive.
II. Employment contracts in football and measures to prevent abuse
(clause 5)
Due to the fact that the social
partners considered that contracts for an indefinite period are the general
form of employment,[29]
the Directive sets out specific measures which serve to secure one of the
Directive’s main goals, i.e.
prevention of abuse arising from the use of successive fixed-term employment
contracts. In this regard, and pursuant to clause 5, the Member States after
consultation with social partners, and/or the social partners, are obliged to
establish at least one of the measures provided, i.e., i) objective reasons justifying renewal of fixed-term
contracts or relationships; ii) the maximum total duration of successive
fixed-term employment contracts or relationships; iii) the number of renewals
of such contracts or relationships. This particular obligation exists when
there are no equivalent legal measures already in place in the national legal
orders. Moreover, in establishing the measures the national authorities are to
take into account the needs of specific sectors and/or categories of workers. Since
the objective reasons justification is the only measure which could facilitate
the maintenance of the current status quo
relating to fixed-term contracts in football, it is necessary to focus on this
particular provisions.
A. Interpretation of ‘objective reasons’ justification in the CJEU’s
case-law
The CJEU has had a chance to rule
on the interpretation of clause 5 ‘objective reasons’ on a number of occasions.
Consequently, for the purpose of relying on the justification the employer not
only needs to be eligible to invoke ‘objective reasons’ defence as provided for
under national law, but also the national implementing measure needs to comply
with the conditions established in the Court’s case-law. In this regard, the
CJEU ruled in Adeneler[30]
that the concept of ‘objective reasons’ refers to ‘precise and concrete
circumstances characterising a given activity, which are therefore capable in
that particular context of justifying the use of successive fixed-term
employment contracts.’[31]
The Court further elaborated on the matter by providing that ‘[those]
circumstances may result, in particular, from the specific nature of the tasks
for the performance of which such contracts have been concluded and from the
inherent characteristics of those tasks […].’[32]
As a result, 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 […].’[33] Thus,
‘a national provision which merely authorises recourse to successive fixed-term
employment contracts in a general and abstract manner […]’[34]
does not fulfil the criteria. In this regard, the Court added that ‘recourse to
fixed-term employment contracts solely on the basis of a general provision of
statute or secondary legislation, unlinked to what the activity in question
specifically comprises, does not permit objective and transparent criteria to
be identified in order to verify whether the renewal of such contracts actually
responds to a genuine need, is appropriate for achieving the objective pursued
and is necessary for that purpose’.[35] Moreover,
the CJEU also indicated that national laws which allow for the use of
successive fixed-term contracts in the context of employers’ needs which are
not of a limited duration, and thus temporary, but de facto ‘fixed and permanent’ will not be compatible with the
Directive.[36]
The above-mentioned findings of the Court have been confirmed in a number of
judgments such as Angelidaki[37]. This case concerned individuals who
claimed that their fixed-term contracts with the local authorities, which the
latter decided not to extended or renew upon their expiry, should have been
recognized as contracts of indefinite period as the work performed was of a
‘fixed and permanent’ nature. Reliance on the criteria provided by the CJEU in Adeneler is also evident in Mascolo in which the Court addressed the
issue of compatibility with the Directive of Italian national law on the basis
of which teachers recruited in schools administered by public authorities and
working as temporary replacement staff were employed under successive
fixed-term contracts. A similar issue to the one in Mascolo emerged in Kücük[38] which
concerned a clerk in the court office who was employed on a number of
successive fixed-term contracts as a replacement for several permanent
employees due to temporary leave having been granted to the clerks employed for
an indefinite duration. Here again the CJEU referred to the established
case-law and clarified that temporary needs of employers also cover the need for
replacing employees on leave even in situations where the tasks assigned to
fixed-term worker are part of the undertaking’s usual activities.[39] This
was the result of the need for replacement staff being of a temporary nature.[40] As
the social partners themselves indicated that ‘fixed-term contracts are a
feature of employment in certain sectors, occupations and activities which can
suit both employers and workers’[41] it
is thus necessary to evaluate whether objective reasons for the justification
of fixed-term contracts in football might be identified.
B. Existence of ‘objective reasons’ justifying fixed-term contracts in
football
With regard to the above, it can be
argued that the specific circumstances inherent to the exercise of football as
a profession are susceptible to justify the successive use of fixed-term
employment contracts. In that respect, uncertainty as to players’ performance
has always been an inseparable element of not only football but sports in
general. No matter what level of performance a player displays over a particular
span of time, it can never be excluded, rather it can be expected with
certainty, that a (significant) drop in performance will take place. This
concerns especially ‘older’ players, i.e.
those in their thirties. It is common knowledge that after reaching a certain
age athletes’ physical condition deteriorates, thus making it impossible for
them to maintain a steady level of performance, and thus, to contribute to the
combined efforts of the team they represent. Furthermore, FIFA transfer rules
limit players’ possibility of terminating contracts. Art. 14 of the 2015 Regulations on the Status and
Transfer of Players
allows for termination to take place where a just cause exists. In this
respect, introduction of contracts for indefinite period could open the
possibility for players to rely on statutory termination periods in order to dissolve
contracts, and thus, to become free agents. Consequently, football clubs, and
especially those which focus on youth development, could be deprived of a
substantial part of their income from transfer fees. This in turn could, first,
limit the incentives for training young players, and second, would make it even
easier for the richer clubs to acquire talents with negative consequences on competitive
balance in football. Moreover, provision 43.02 of the Regulations of the UEFA Champions
League 2015-18 Cycle
provides that clubs may only register 25 players for the purpose of playing in
the competition. Forcing clubs to sign players on indefinite contracts,
combined with a limit placed on the amount of footballers that can be registered,
will make it even more challenging for youngsters to enter the first team.
Furthermore, as it is usually more difficult for the employer to terminate a
contract, football clubs could be (indirectly) forced to keep those footballers
who no longer fit the team’s tactics or club’s policy (e.g. focus on youth). In this respect, establishing contracts for
an indefinite period as the industry’s standard could again negatively influence
the chances of young players signing a contract. Furthermore, clubs need to be
able to adjust their squads and establish stable teams in order to effectively
compete on both national and international levels, and to retain, attract and satisfy
their supporters. In our view, fixed-term contracts, by their very nature, are therefore
better suited to address the specific characteristics of football as a sport,
and as an industry.
C. Possible obstacles to the application of ‘objective reasons’
justification to contracts in football
Nevertheless, even if it is
accepted that successive fixed-term contracts between footballers and their
clubs may be justified based on objective reasons, it still remains that the
justification does not necessarily apply. First, the Member States are free to
choose between the clause 5 measures. Consequently, the very possibility of
relying on objective reasons depends on the manner in which the Directive has
been implemented by the Member States.[42]
Second, national implementing measures must comply with the requirements
established by the CJEU. Therefore, the Member States that chose to make use of
the objective reasons justification are obliged to establish objective factors
on the basis of which the application of the justification will be assessed. A
general provision of a purely formal nature which does not provide for such
objective factors will not be deemed compatible with EU law. In this regard, the
criteria or factors established under national law must be capable of being
applied to contracts in football. Consequently, national law implementing
clause 5 objective reasons needs to be drafted in a manner which allows
football contracts to be considered for the purpose of applying the
justification, which might be problematic given the fact that the issue has
been largely neglected. Third, it has also been established by the CJEU that
national laws which allow for the use of successive fixed-term contracts in the
context of employers’ needs which are ‘fixed and permanent’ will not be
compatible with the Directive. It would go contrary to the objectives pursued
by clause 5, i.e. prevention of abuse
arising out of successive fixed-term contracts, to allow renewal of such
contracts to cover ‘fixed and permanent’ needs of employers.[43]
Therefore, if the ‘needs’ of football clubs are considered to be of such a ‘fixed
and permanent’ character, and it may be argued that they are, then reliance on
the justification would also be endangered.
Concluding remarks
The ruling of the Mainz court questioned, at
least in Germany, the current arrangements whereby contracts for a definite
period have been established as the industry’s worldwide standard.[44]
Consequently, it cannot be excluded that the judgment will once again feed the never-ending
discussion on the impact of European law on sport, the debate on the notion of
specificity of sport, and more generally, the boundaries between the European
Union’s intervention in sport and the autonomy of sports governing bodies. It
is safe to assume that considerable controversies will arise in case the
decision of the court in Mainz is upheld at higher instances. This, however,
will not be the making of the courts, but to a large extent the result of the
issue being neglected for years. After all, the Directive was adopted already
sixteen years ago and contains no provisions allowing sport to be exempted from
its scope. It follows that based on its wording it must also apply to contracts
concluded between footballers and clubs. Even though it is possible to justify the
successive use of fixed-term contracts on the basis of objective reasons, this
depends on the national implementing measures, which do not necessarily provide
for such a possibility or are fit to accommodate football contracts.
[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] Annex to the
Directive, ETUC-UNICE-CEEP Framework Agreement on Fixed-Term Work (Framework
Agreement)
[3] Framework
Agreement, recital 14 and clause 1
[4]
Clause 1 of the Framework Agreement also mentions a second goal, namely, the
improvement of quality of fixed-term work by ensuring the application of the
principle of non-discrimination. In this regard, Recital 9 of the Framework
Agreement adds that the instrument is to contribute to the improvement of
equality of opportunities between men and women
[5] Philippa
Watson, EU Social and Employment Law
(2nd edn, Oxford University Press 2014) p 241; see also case
C-212/04 Konstantinos Adeneler en anderen
tegen Ellinikos Organismos Galaktos (ELOG) [2006] ECR I-6057 (Adeneler), para 57
[6] However, the
definition of what constitutes a fixed-term employment has an EU definition. See
Directive, clause 3(1)
[7] See also
art. 288 TFEU; Adeneler, para 68
[8] Case
C-307/05 Yolanda Del Cerro Alonso v
Osakidetza-Servicio Vasco de Salud [2007] ECR I-7109 (Del Cerro)
[9] Ibidem, para 28
[10] Ibidem, para 29
[11] Del Cerro, Opinion of AG
Maduro, para 14
[12] Ibidem, para 15
[13] Ibidem; see also case C-393/10 Dermod Patrick O’Brien v Ministry of Justice
[2012] published in the electronic Reports of cases (O’Brien), para 51
[14] Case C-157/11
Giuseppe Sibilio v Comune di Afragola
[2012] published in the electronic Reports of cases (Sibilio)
[15] Ibidem, para 49
[16] Ibidem, para 51; see
also O’Brien, para 51
[17] Sibilio, para 52
[18] Joined cases
C-362/13 REC, C-363/13 REC and C-407/13 REC Maurizio
Fiamingo, Leonardo Zappalà and Francesco Rotondo and Others v Rete Ferroviaria
Italiana SpA [2014] not yet published (Fiamingo)
[19] Joined cases
C-22/13, C-61/13 to C-63/13 and C-418/13 Raffaella
Mascolo, Alba Forni and Immacolata Racca v Ministero dell'Istruzione,
dell'Università e della Ricerca, Fortuna Russo v Comune di Napoli and Carla
Napolitano and Others v Ministero dell’Istruzione, dell’Università e della
Ricerca [2014] not yet published (Mascolo)
[20] Fiamingo, para 38; Mascolo, para 69
[21] Case C-66/85 Deborah Lawrie-Blum v Land Baden-Württemberg
[1986] ECR 2121
[22] Ibidem, para 17
[23]
Case C-456/02 Michel Trojani v Centre
public d'aide sociale de Bruxelles (CPAS) [2004] ECR I-7573
[24] Ibidem, para 15
[25] For a more
detailed discussion see Stefaan Van den Bogaert, Practical Regulation of the Mobility of Sportsmen in the EU Post Bosman
(Kluwer Law International, The Hague 2005) pp 57-59
[26] 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
[27] Ibidem, paras 74, 87,
90
[28] Case
C-325/08 Olympique Lyonnais SASP v
Olivier Bernard and Newcastle UFC [2010] ECR I-2177 (Olympique Lyonnais), para 29; Olympique
Lyonnais, Opinion of AG Sharpston, para 38
[29] Framework
Agreement, recital 6; see also Adeneler,
para 61
[30] See supra note 5
[31] Ibidem, para 69
[32] Ibidem, para 70
[33] Ibidem, para 72
[34] Ibidem, para 71
[35] Ibidem, para 74
[36] Ibidem, para 88
[37] 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 (Angelidaki)
[38] Case C-586/10
Bianca Kücük v Land Nordrhein-Westfalen
[2012] published in the electronic Reports of cases
[39] Ibidem, para 38
[40] Ibidem
[41] Framework
Agreement, recital 8
[42] See e.g.
Fiamingo, para 61
[43] See e.g. Angelidaki,
para 103; Angelidaki, Opinion of AG
Kokott, paras 106-107;
[44] In this
regard art. 18(2) of 2015 FIFA’s Regulations on the Status and Transfer of
Players stipulates that ‘[t]he minimum length of a contract shall be from its
effective date until the end of the season, while the maximum length of a
contract shall be five years. Contracts of any other length shall only be
permitted if consistent with national laws’