With the end of the European Championship, on the eve of the Paris 2024 Olympic Games, and in the middle of the summer soccer transfer market, professional sports become the center of attention. In this scenario, we analyze whether professional athletes have the right to be compensated when their own will prevents the renewal of the employment contract and, with it, the continuity of the special employment relationship, which is, by nature, of a fixed term.
In 1979, the Association of Spanish Football Players called the first strike in its history, which led to legislative reforms that changed the future of professional sports in Spain. Among their demands was the suppression of the right of retention that empowered clubs to unilaterally extend the employment contract with athletes, thus preventing a change of ranks by them and frustrating their possible economic and sporting progression.
This claim gave rise to a regulation that culminated in the approval of Royal Decree 1006/1985, of June 26, 1985, regulating the special employment relationship of professional athletes, which, according to article 13, became “always of a fixed term”, without the club being able to extend it unilaterally.
Contrary to what an ordinary employee would wish, professional athletes benefit from a temporary relationship with their employer, thus enjoying a wide bargaining power depending on his sporting success.
In 2001, for the ordinary employee and still without apparent impact on professional sport, a compensatory indemnity (then 8 days’ salary per year of service) for the contractual termination due to the expiration of the agreed time in fixed-term contracts was introduced for the first time in the Workers’ Statute.
For a long time, there was a consensus that such indemnity could not be applicable to the contract of a professional athlete, whose temporary nature derived from a regulatory mandate and not from a business choice that resulted in the instability and uncertainty that can characterize a fixed-term contract.
However, in the 2010s, some Spanish higher courts of justice began to recognize to professional sportsmen and women the compensation —already of 12 days’ salary per year of service— provided for in Article 49.1.c) of the Workers’ Statute, applying that article analogically.
Numerous contradictory pronouncements affecting different types of athletes (from cyclists to Basque pelota players, the so-called pelotaris, footballers and other athletes) led to the first unification of doctrine by the Social Division of the Supreme Court (ruling of 26 March 2014), which concluded that the compensation of Article 49.1.c) was applicable to athletes “with more humble results” and whose situation is comparable to that of the ordinary temporary employee, expressly excluding “elite athletes” with high salaries, who use their contractual temporariness to progress sportively and economically.
Faced with the blurred line separating one situation and the other, the Supreme Court clarified in its ruling of 14 May 2019 that the indemnity is applicable to any professional athlete, regardless of his or her status as an elite athlete, although it clarified that “it will only proceed when the lack of contractual extension comes from the exclusive will of the sports entity and not —as is logical— when both parties agree not to extend the life of the contract or it is the athlete himself or herself who excludes that novatory possibility”.
Despite this, it is not uncommon for sports clubs to find athletes who reject their renewal offers, but at the same time claim compensation for the end of the contract as if they had been harmed by the lack of a contract extension that they themselves rejected.
In elite clubs, it is common for these indemnities to reach and exceed hundreds of thousands of euros for each athlete, and being contracts of very limited duration, it is a recurring cost that is not negligible for any sports entity.
Therefore, it is crucial in these cases to determine what was the true will of each party at the time of the termination of the employment relationship to determine whether the non-renewal of the contract was due to the club, the athlete, or the agreement of both.
Íñigo Sebastián Garay
