Severance pay for professional sportsmen and women

In the previous article we analyzed the indemnity of sportsmen and sportswomen due to the application of the Workers' Statute. However, we must point out that not only terminations due to expiration of the agreed term give rise to compensation in favor of professional athletes. In this new post we will analyze the indemnity to be received by sportsmen and sportswomen in the event of dismissal. 

In order to analyze the aforementioned casuistry, we must start from the article that regulates the effects of the termination of the contract due to dismissal of the sportsperson (Art. 15 of Royal Decree 1006/1985), which establishes that in the event that a worker is dismissed due to a serious breach, the sportsperson will not be entitled to any compensation whatsoever. 

In view of the above, only in those cases in which a serious breach by the professional athlete is proven and accredited, the club or sports entity will be exempt from the obligation to pay any amount to the athlete, a sensu contrario, when a serious breach of contract by the athlete is not accredited, the dismissal will be classified as unfair, and the sports entity will be obliged to pay the athlete a severance payment.  

Relevant rulings on severance payments to professional athletes

In order to determine which are the serious breaches that may justify the dismissal of the athlete, the applicable collective bargaining agreement or the Workers' Statute itself -article 54- must be consulted. By way of illustration, for the purpose of giving a practical example of when a disciplinary dismissal of a professional athlete has been considered appropriate, it is worth mentioning the Judgment of Social Court number 11 of Madrid of July 8, 2002 (confirmed by Judgment of the Superior Court of Justice of Madrid of December 4, 2002), in which the dismissal of a soccer player for simulating an illness was declared appropriate, and the literal wording of which reads as follows:

“On the other hand, in a further examination, no cause was detected to justify the alleged ailments of the player. It was also found that the player had never previously suffered from migraines, nor had he ever had vision problems, nor had he ever claimed such ailments in order to play for Real Madrid.

All these facts lead to the following conclusion: that the player B. simulated an illness in order to avoid having to sit on the substitutes' bench in the match against Tenerife, in view of the refusal of the Coach, Mr. M., to call him up as a substitute. Mr. M., to call him up as a starter.

And such conduct constitutes a very serious misconduct, according to the Disciplinary Regulations and transgression of contractual good faith [art. 54 d) ET].”.

As previously stated, the dismissal of an athlete may occur without a very serious misconduct, simply because of a sporting or strategic decision, or even when a very serious misconduct has occurred, but it cannot be accredited or proven by the club. In these cases the dismissal will be declared unfair, and the amount of compensation will be set in accordance with the provisions of article 15.1 of Royal Decree 1006/1985.

The aforementioned legal precept may have a confusing wording, therefore, for a better exposition of this article and for a better understanding by the reader, it is necessary to refer to the explanation given in the Supreme Court (Social Chamber) Ruling of February 6, 2002. In this ruling, our High Court establishes that, once the dismissal of a professional athlete has been declared unjustified, he/she will be entitled to: 

1. Firstly, to an automatic indemnity, the one agreed upon in the employment contract. 
2. Secondly, in the event that nothing has been agreed, the minimum, consisting of two monthly payments of the periodic remuneration, plus salary supplements for each year of service. 
3. Thirdly, the judge may increase the minimum compensation according to the circumstances of the case, using criteria such as the remuneration lost by the athlete. 

Thus, in the event that the quantum of compensation to be received by the soccer player in the case of a declaration of unfairness has not been agreed upon, the judge will not be bound to the two monthly payments per year of service legally established, but may increase it according to the circumstances, up to the maximum of what the worker has ceased to receive as a result of the termination (Decision of the Superior Court of Justice of Navarra (Social), of May 26, 1997). 

This exception was introduced by our legislator in order to protect the professional athlete, since if only temporary criteria were to be applied in a relationship that is mainly characterized by its brevity, it could give rise to situations of real injustice for professional athletes, as was pointed out in the Judgment of the Supreme Court (Social) of February 6, 2002: "necessarily short, while the damage suffered may be enormous".

In view of the above, in order for the judge to be able to modulate the amount to be received by the athlete as compensation for termination of the employment relationship, certain circumstances must be present that justify raising the amount of compensation. In this regard, our courts have used as a guiding criterion:

1. The high age of the worker or the existence of other job offers, Judgment of the Superior Court of Justice of Cantabria (Social) of January 10, 2008.
2. The moment in which the termination of the athlete's contract takes place, since, in some sports, athletes can only be signed during a specific period of time and dates, thus, the proximity or remoteness of these dates must also be a circumstance to be assessed by the judge. Judgment of the Superior Court of Justice of Galicia (Social) May 11, 2007.
3. That, in the season following the termination, the athlete has not signed for any club or sports entity, Judgment of the Superior Court of Justice of Madrid (Social) of November 21, 2007.
4. When the contract with a club or sports entity is terminated in order to go to another one, and the employee is dismissed after a few months, Judgment of the Madrid Superior Court of Justice (Social) of April 30, 2010. 
5. When a sports club brings a young foreign player to Spain with the promise of conditions, certainly modest, and then terminates his contract, Judgment of the Superior Court of Justice of Madrid (Social) of December 14, 2022. 
6. When the club or sports entity imputes completely false facts in order to dismiss the worker, Judgment of the Superior Court of Justice of Madrid (Social), June 8, 2020.
7. Likewise, salaries received in a subsequent club or entity will not be taken into account when reducing the compensation to be received by the athlete Judgment of the TSJ of Valencia (Social) of July 10, 2018.

In view of the above, taking into account the concurrent circumstances (age of the athlete, short time to sign for another club...) the judge may modulate the compensation to be received by them, with a limit on what the athlete will no longer receive as a result of the early termination of his contract. 

But as mentioned above, in principle, the amount agreed by the parties must be taken into account in order to fix the amount of compensation, therefore, it must be analyzed whether it is possible to exclude the judicial power previously mentioned by means of the subscription of an agreement between the parties. 

Limiting the judge's modulating power by means of an agreement between the parties

Our legal system is governed by the principle of freedom of agreement and private autonomy, which is enshrined in Article 1,255 of the Civil Code, which reads as follows: "The contracting parties may establish the agreements, clauses and conditions that they deem convenient, provided that they are not contrary to the laws, morality or public order".

Based on the above, the doctrine proposed limiting the judge's modulating power, via article 1,255 of the Civil Code, i.e., agreeing that the judge is only entitled to the minimum legal indemnity - 2 monthly payments per year of service. 

In order to determine whether this agreement is possible, it is essential to analyze whether it contradicts the law, i.e. whether the judge's modulating power, in terms of compensation for termination of the contract, is a minimum necessary right for the athlete. 

The jurisprudential doctrine explained above has understood that such judicial power is not a minimum necessary right, only the indemnity of 2 months per year of service is, ergo, such possibility may be excluded by express agreement between the athlete and the club.

Thus, for example, the Judgment of the High Court of Justice of Catalonia of October 18, 2012 has understood: "the legality of the agreement has not been discussed, but it should be added that it must be considered legitimate to the extent that it respects the minimum amount to be set as compensation, whether by agreement or by judicial determination, as established by law".

In view of what has been stated in this article, it must be concluded that in the event of termination of the contract, the professional athlete shall be entitled:

• He shall not be entitled to any legal indemnity in the event of fair disciplinary dismissal.  
• To the indemnity agreed upon in the event of dismissal. 
• To a severance payment of 2 months per year of service, which may be increased by the judge up to the amount the employee no longer receives as a result of the termination, provided that the dismissal is unjustified and nothing has been agreed upon by the parties. 
• By agreement, the judge's modulating power may be excluded, provided that the legal minimum of two months per year of service is guaranteed.

In cases such as these, we have a team of lawyers who are experts in the compensation and dismissal of professional athletes, whose regulation requires specific knowledge and experience as these matters are more complex than usual. Contact with us.

Tomás Achabal

Labour area