Legal provisions for transfers of athletes

PhD S.V. Lukashevich1
PhD K.E. Lukovkin1
Associate Professor, PhD T.A. Makarova1
1Ulyanovsk State Pedagogical University named after I.N. Ulyanov, Ulyanovsk

Keywords: transfers of athletes, transfer payments, athlete’s contract, contract cancellation, labor right, labor freedom.

Background. Presently the national professional sport system operates on an exclusively market basis; and the legal theory qualifies transfers of athletes from one team to another with forms of business activity [3, p. 52-58]. Since the sport transfers have become quite common, the relevant legal and regulatory provisions (that appear still far from perfection) deserve being analyzed and improved.

Objective of the study was to make a theoretical analyzis of the valid legal and regulatory framework for transfers of athletes from one sport organization to another.

Results and discussion. The first transfers were recorded in the late 19th century. Originally football players were deemed owned by the football club even upon expiration of the individual service contracts and were not allowed to move to another club unless their club is paid an agreed amount for the transfer. It was only in 1995 that a European court formally recognized the individual right for transfer from one club to another upon expiration of the service contract [13]. As provided by the valid national legislation, a labor contract may include the athlete’s liability to pay certain amount to the employer when the contract is cancelled on the athlete’s initiative without compelling reasons; or on the employer’s initiative on the grounds in connection with the disciplinary penalties; conditional on the amount of severance payment being set forth by the contract. Analysis of the regulatory provisions of different sport federations [10] shows that such compensatory payments are normally explained by the need to offset the costs of the athlete’s training for the employer.

It should be mentioned that the law does not give a definition for the compelling reasons and, hence, the reasons are qualified on a discretional case-by-case basis with account of the frame provisions of the Russian sport federations for the relevant sport disciplines; albeit it has become quite common to qualify with the compelling reasons the following circumstances: violation of the Labor Code by employer [12]; professional disqualification/ dissolution of the employer sport organization; retirement; need to help a sick family member etc. [11]. There are also sports-specific reasons including the irregular competitive schedule; exclusion from the seasonal competitions for the reasons other than a temporary or constant disability; demotion of the sport club to the lower division/ league; exclusion of the sport club from competitions; demotion of athletes to amateurs; retirement from sport etc. [2].

The Labor Cod of the RF makes no provisions for the severance payment; and it is traditionally provided by the service contract in a fixed amount or amount estimated based on the athlete’s service remuneration. Normally such provisions are fixed in regulations by the relevant sport agencies. It should be mentioned that the valid legal provision that allows a standard labor contract being complemented by a clause on an undisputable severance pay in case of the contact cancellation by either party – is considered contradictory by the legal theory. Some scholars consider this provision unconstitutional for it violates the freedom of labor; the others interpret it as a fair compensation of the employee’s training costs to the employer [4], as was provided by the first Federal Bill with this provision; and the third believe that the severance payment shall be qualified with the settlements of contractual liabilities subject to regulation by the Civil Code rather than Labor Code [8].

Cancellation of service contact on the initiative of the athlete may be due to the athlete willing to join another sport organization. As provided by Article 16 of the Federal Law ‘On Physical Education and Sports in the Russian Federation’, the national sport federations are entitled to set rules of and limitations on their athletes’ transfers to different sport organizations; and presently such limitations may be put in effect in at least 129 sport disciplines [9].  A statute of any professional sport league including the national and foreign professional sport clubs shall spell out who and how decides on the athletes’ transfers to different sport organizations and identifies the severance amounts payable for the transfers. Thus the CHL Regulation clearly spells out the rules, terms and amounts of such payments [7] including compensations of the education/ training costs plus the amounts accrued in the solidarity system.

It is not unusual that the sport federations set the rules for the transfer settlements based on the relevant transfer contracts or regulations of these federations. It should be mentioned that the rules and limitations imposed by the federations are very wide. It is obvious, however, that the rules and regulations of sport agencies shall come in no conflict with the national legislation, otherwise they are considered illegitimate. As provided by Article 37 of the Constitution of the RF, citizens’ labor is free; everybody is entitled to freely dispose of the own working resource; whilst a compulsory labor is forbidden [5]. The ban on obligatory labor is further spelled out by Articles 2 and 4 of the Labor Code of the RF. Furthermore, Article 55 of the Constitution of the RF specifies that rights and freedoms of the residents may be limited by federal laws only to the extent required to protect the constitutional order, morals, health, rights and lawful interests of other people, and to meet the needs of national defense and national security.

Having declared the freedom of labor, the state granted the residents the right to work or not on their own discretion [1]. Therefore, any compulsion into labor by a threat of financial compensation – as provided by Article 4 of the Labor Code of the RF – may be qualified a forced labor. We find a contradiction between Article 4 and Article 348.2 paragraph 16 of the Labor Code of the RF that allows a labor contract to provide for a compensatory payment due from the athlete in case of the labor contract cancellation on his initiative. It is clear that the provisions for the early cancellations of labor contracts need to be revised to harmonize them with the key provisions of the LC and Constitution of the RF [1].

Based on the above provisions, every regulation by the sport federations shall be qualified invalid and non-applicable to transfer payments, otherwise the regulations shall be revised to harmonize them with the key constitutional provisions on the freedom of labor. This freedom implies, among other things, unlimited recruitment to another sport organization, and cannot be limited by financial claims of the prior employer with threats of dismissal – in violation of constitutional right for labor. As things now stand, an athlete’s right for a free choice of job different from the current one is violated by the requirement to have the transfer amount paid for by some sport organization; and an athlete is entitled to cancel his labor contract ahead of time – regardless of whether or not the cancellation is supported by a transfer contract.

As provided by the Memorandum to the Federal Bill ‘On Changes and Amendments to the Labor Code of the Russian Federation’, Article 54.1 regulating the employment matters in the sport sector was inspired by the concerns that “when a leading athlete… leaves the sport club… he/she exposes the competitive and financial interests of the club and the popularity of the competitive events to serious risks – that may be of detriment for progress of many sport disciplines in our country” [6].

Conclusion. The existing limitations of the athlete’s constitutional rights for free labor shall in no way be qualified with the exclusions provided by Article 55 of the Constitution of the RF and, hence, violate the latter. The athletes’ motivations for transfers to the competing organizations are normally dominated by dissatisfaction with payments; limited opportunities for the professional progress and promotion etc. It is concluded that every transfer related issue shall be solved by a reasonable mix of financial and promotional means rather than the unconstitutional limitations of the freedom of labor.

References

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Corresponding author: luminica@list.ru

Abstract

The study analyzes the valid legal and regulatory framework for transfers of athletes from one sport organization to another. For the purposes of the study the authors formally analyze the national and international laws and judicial practices with concern to transfers; compare the relevant labor code provisions with regulations of sport federations versus the constitutional freedom of labor; give a legal assessment of the settlement system applied in the transfer contracts; analyze the law enforcement (including judicial) national and international practices; highlight the contradictions and deficiencies in the valid legislation; and offer the ways to correct and harmonize the latter.

The study data gives the reasons to state that any limitation of the athlete’s constitutional rights for free labor shall in no way be qualified with the exclusions provided by Article 55 of the Constitution of the RF and, hence, violate the latter. The athletes’ motivations for transfers to the competing organizations are normally dominated by dissatisfaction with payments; limited opportunities for the professional progress and promotion etc. It is concluded that every transfer related issue shall be solved by a reasonable mix of financial and promotional means rather than the unconstitutional limitations of the labor freedom.