Some transfers rules break EU legislation on freedom of movement, court decides

 

 

By Tony Attwood

The top court in the European Union has decided that as they stand, the rules on transfers that affect a player or club within the EU are contrary to EU rules in relation to issues concerning competition and freedom of movement.

This is the conclusion of the Lassana Diarra case in which the player pointed out the Fifa regulations were a restraint of trade in that he was stopped from moving to another club after Lokomotiv Moscow ended his contract.

The ruling in that case was that the player had terminated his contract without “just cause” and so any new club he went to would have to pay compensation to his old club.   This of course is quite different from the rules that pertain in any other form of employment in the EU and indeed in the UK even though it is not in the EU.  Anyone can give notice, and leave a job.  How long that notice is, is a matter for the contract, although it cannot be unreasonable, and it should apply to both sides

If such a regulation applied in other forms of work it would mean that no one could leave a job unless the employer either wanted the individual to go, or the employer behaved in an unreasonable or illegal manner.

However, the court has now ruled that the rules within football “hinder the free movement of players and competition between clubs.  The rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club.”

This is one of the cases in which football, and sometimes sport in general, likes to claim that it is “Different” from “normal” forms of employment because of the restrictions that the notion of organised competition bring.

Generally, the courts have been against such arguments, saying that most of the time there is little within sport that makes it inherently different.  The supreme importance is within the concept of a person being free to work for whomever he or she wants.  It is an idea that Fifa, Uefa, the FA and others have over the years tried to suggest cannot apply to football because of the “special nature” of football, but this is regularly set aside by the courts.

The assessment now given will guide the courts which deal with individual cases such as this one as it finds that Fifa overrode the player’s rights to freedom of movement when he was denied authorisation to leave one club and join another.

Fifa has now been told that in Europe, although not necessarily outside the EU, transfer fees and contracts that clubs can make unbeakable, affect the ability of clubs to trade and of employees to seek employment.  In fact it has ruled that the way transfers currently work means that the transfer regulations, by their very design, ensure that trade is restricted.

The application of the new ruling is that  a player should be able to walk away from a contract and find another employer just as most of us can.  This means that players now have the power that was previously held by the clubs.  Players can, it seems, break contracts just as other people can do in other jobs, by handing in their notice.

There might still be claims for compensation when a player does this, but quite how such compensation can be worked out, or indeed enforced, no one yet knows.

This will have all sorts of impact.   Take a Premier League club that has bought a player for £50m.   That player could now be tempted to sign for another club, through an offer of a bigger salary, and so leave, without the club for whom the player currently plays getting much in the way of compensation.

Of course for some clubs, transfer business is just a side effect, but for others it represents a way of keeping afloat financially.

This could also have an effect on organisations like the City Group which can control players by moving them around the clubs in the group.  Now the players seemingly have the freedom to move on anywhere they like.

So will this be Bosman part two?

It certainly seems to mean that players can leave a club when they want to, just as most people can leave their employer.  A reasonable period of notice might be needed, but beyond that, nothing.   

Think of a player of a certain level of ability who feels he/she is not getting a decent run of games and is forever on the bench.  Such a player might welcome a move and the current club would be powerless to stop it.

Or the player who is dropped because he has fallen out with the manager.   Again at the start of the next window that player can go.  Which will affect how managers handle players.  Or think of the club that keeps a player by demanding an unrealistic transfer fee, knowing that no one is ever going to pay it.  Again that can be stopped.

Indeed think of the players who have been signed for £100m in the last window.  They can now go and sign for someone else if they think they are worth a higher salary.

And here’s another thing: could it be argued that there simply being two transfer windows is itself a restraint of trade?   Quite possibly it could.