Following the unprecedented disruption caused to football by COVID-19, FIFA has been working on several recommendations and guidelines in order to address some of the key regulatory and legal issues arising, especially with regard to player contracts and the transfer system.
Following consultation with different stakeholders, a set of principles and guidelines were unanimously agreed and endorsed by the FIFA Council on Tuesday.
Here’s a summary of the main guidelines approved:
Given the likelihood of football seasons across the globe being extended, it is proposed that expiring player contracts, which typically expire on the usual end of season date such as 30 June, be extended until such time that the season does actually end. FIFA say this is in line with the original intention of the parties when the contract was signed and should also preserve sporting integrity and stability.
A similar principle applies to contracts due to begin when the new season starts such as 1 July, meaning the entry into force of such contracts is delayed until the next season actually does start.
The above principle should also apply to international transfer agreements so any payment that contractually falls due prior to the new commencement date of a player contract should be delayed until the new start date of a new season or its first registration period.
Agreements That Cannot Be Performed
Given the impact that COVID-19 has had on clubs’ revenues, it is likely that agreements cannot be performed as the parties originally anticipated and obligations will potentially be made impossible. Whilst this is ultimately an issue at a national level based on the applicable national law, FIFA have recommended some guiding principles in order to find a fair solution for clubs and employees.
Therefore, in order to guarantee payments to players and coaches, protect contractual stability and ensure clubs do not go insolvent, it is proposed that:
1.Clubs and employees (players and coaches) are strongly encouraged to work together to find collective agreements regarding employment conditions for any period where the competition is suspended due to COVID-19;
2. Unilateral decisions to vary agreements will only be recognised where they are made in accordance with national law or are permissible within collective bargaining agreement structures;
3. Where clubs and employees cannot reach an agreement and national law does not address the situation, unilateral decisions to vary terms and conditions of contracts will only be recognised by FIFA’s Dispute Resolution Chamber (DRC) or Players’ Status Committee (PSC) where they were made in good faith, are reasonable and proportionate. When assessing whether a decision is reasonable, the DRC or the PSC may consider:
- Whether the club had attempted to reach a mutual agreement with its employee(s);
- The economic situation of the club;
- The proportionality of any contract amendment;
- The net income of the employee after contract amendment; and
- Whether the decision applied to the entire squad or only specific employees.
- Alternatively, all agreements between clubs and employees should be “suspended” during suspension of competitions provided there is proper insurance coverage in place and adequate income support arrangements can be found for employees during the period in question.
The Transfer Window
FIFA has agreed to be flexible and allow the relevant transfer windows to be moved so they fall between the end of the old season and the start of the new season providing that their duration complies with
the maximum limit (i.e. 16 weeks) established in the FIFA’s regulations on the status and transfer of players.
Other Regulatory Matters
Some other important regulatory decisions to note are:
- The restrictions on international loans which were due to commence on 1 July will now not enter into force; and
- Whilst FIFA is fully aware of the potential financial difficulties of some clubs, decisions rendered by the DRC, the PSC or the Disciplinary Committee must still be respected and so no exceptions will be granted.
Whilst the long awaited guidance from FIFA is sensible and welcomed, legal issues regarding the extension of the season still remain.
For example, FIFA acknowledge that employment agreements are governed by national law and the contractual autonomy of the parties so, given that under English law a party cannot be compelled to enter into a contract, what is the position if the player or the club refuses to agree an extension to the contract?
Similarly, what if a player and a club who have agreed a pre-contract for the player to sign for a club on 1 July, refuses to delay the entry into force of the contract? In this respect, it is interesting to note that FIFA have said that players whose contracts have expired or been terminated as a result of COVID-19 has the right to be registered by an association outside a registration period. Does this leave the door open for players who have agreed pre-contracts to sign for clubs before the end of the extended season?
Time will tell how these issues will ultimately play out but for more information my recent article explores some of these issues further.
“The COVID-19 pandemic has clearly changed all the factual circumstances around football for this season. So, FIFA, together with the stakeholders, has come up with some practical ideas and proposals to tackle these new circumstances. Whilst this will not solve each and every problem, it should serve to bring a measure of stability and clarity to football for the foreseeable future. We hope that this collaborative effort, under the leadership of FIFA, can provide a positive example of how football can come together and show unity, solidarity and a spirit of compromise in order to face the challenging times ahead. But before these times come, one thing must be clear to everyone, especially now: health comes first, well before football,”