Preamble
The system of football transfers makes the relationship between a football club and football player very different from other job relationships as the club might need to pay a transfer fee sign a player who is under contract with different club, with or without the use of a football agent. This of course, differs from ordinary jobs, where the employee can find a new job and terminate the contract without any particular reason.
The transfer system is based on FIFA’s transfer regulations, the Regulations on the Status and Transfer of Players (RSTP), which requires the national football associations to comply with FIFA’s regulations and establish domestic regulations that regulate the contractual relationship between a football club and a football player.
FIFA’s regulations
Which situations that entitle a club to unilaterally terminate a football player’s contract is regulated in the FIFA's transfer regulations, the FIFA RSTP. FIFA RSTP was established after the Bosman ruling, a decision made by the European Court of Justice in 1995, which, in short confirmed that a football player is entitled to a free transfer to another club in the EU/EEA area once the football player’s contract has expired. The Bosman ruling made it necessary for FIFA to regulate to what extent football clubs could demand transfer fees for their football players when signing for new clubs, with or without the aid of football agents.
The principle of just cause
An important principle in FIFA RSTP is that contracts between football clubs and football players should be respected.
Whether a club can terminate a contract will depend on whether there is just cause for termination. Following a unilateral termination both the player and the club may be liable to pay compensation and could even risk sporting sanctions.
The football player terminates the contract
When the player unilaterally has terminated the contract, he will be entitled to compensation if he can establish that he had just cause. In this regard, the player must establish that the club has breached its contractual obligations, and that the club’s breach of the contract is significant enough to establish just cause.
The vast majority of disputes that lead to the football player terminating the contract is related to missing or reduced payments of wages. Although reduced or non-payment of wages will constitute a breach of the club’s obligations, one must consider on a case-to-case basis whether the missing payments may justify that the player can terminate his contract with just cause. Small delays and minor non-payments will normally not justify termination. However, longer delays of salary payments might well constitute just cause, and entitle the player to terminate the contract unilaterally.
In 2018 FIFA changed its regulations , and since then, if a club is more than two months late with salary payments, the player will be able to terminate the contract with just cause, given that he, or his football agent, gives the club 15 days to pay the outstanding wages.
The football club terminates the contract
Like the player, the club can terminate the contract if it can establish just cause. It is worth noting that a player’s lack of success will not give the club the right to terminate the contract. However, if a player fails to report for training over a longer period, or if he breach football or sports regulations, such as the doping regulations, the club may terminate the contract.
What happens when the player’s contract is terminated
When a player terminates his contract with just cause, e.g. following the club’s failure to make salary payments with just cause, the player is free to sign for another club and his previous club will be responsible to reimburse him. The club will also risk sporting sanctions. However, if the player terminates his contract and does not have just cause, or if the club terminates the player’s contract with just cause, the player will be obliged to compensate to the club, and the player would in such a case also risk sporting sanctions.
In-dept knowledge of rights, obligations and risks is essential for any player and club that considers terminating a contract. Northern Star is a football agent specialized in football law and ensures that its clients receives top guidance to make sure they fully benefit from their rights, and that they do not risk being liable to pay compensation following the termination of a contract.
