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Unilateral Termination of a Football Contract in Light of the New PZPN Regulations .

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Somewhat in the shadow of changes in regulations concerning football agents (which can be read about HERE), the PZPN board also passed new regulations regarding the relationships between players and clubs. Resolution of March 27, 2015 specifying the minimum requirements for standard player contracts in the professional football sector introduces several significant changes, especially regarding the stability of football contracts.

 

First and foremost, it should be emphasized that the new regulations are effective from the date of the resolution, which is March 27, 2015. They also have a limited application to contracts concluded before the entry into force of the new provisions, as will be discussed later. The aforementioned regulations replaced the previously applicable resolution no. II/12 of the PZPN Board of May 19, 2002 - Rules regulating the relationships between a sports club and a professional player. Of course, certain aspects have remained unchanged. Furthermore, a player contract may be concluded for a fixed term not exceeding 5 years, and in the case of players under 18 years of age - not exceeding 3 years. The resolution itself contains an enumeration of elements and contents that should be included in the contract. However, I would like to focus on the changes introduced regarding the termination of player contracts.

 

Until now, a contract could be terminated based on mutual statements of intent. In a situation where one of the parties to the contract (i.e., the club or the player) wished to unilaterally terminate the agreement, they were required to apply to the PZPN Chamber for the Resolution of Sports Disputes with an appropriate request, indicating the reason on which the demand is based. The current regulations allow for the termination of the contract without the involvement of the Chamber.

 

Termination of Contract by the Player

 

The player may terminate the contract due to the fault of the club in the following cases:

– The club delays payment to the player of individual remuneration due to him for the professional practice of football for a period of at least two months, provided that after this period the player sets an additional payment deadline in writing to the club, not shorter than 14 days, with the reservation that the failure to pay the arrears in full will result in the right to unilaterally terminate the contract due to the club's fault;

– The club, due to its fault, fails to register the player for league matches, provided that the declaration of contract termination is submitted within one month from the date of the closing of the period of club affiliation changes in accordance with the current PZPN regulations;

– The club, due to its fault, fails to provide the player with mandatory insurance against the consequences of accidents in sports, as a result of which the player did not receive the insurance benefit due to him or its equivalent from the club, or the club did not provide proof of conclusion of an insurance contract within 14 days from the date of the player's written request for such insurance, provided that the declaration of contract termination is submitted within one month from the date of occurrence of any of the events;

– The club does not provide the player with medical treatment or rehabilitation after an injury sustained during sports competition or training, or refuses to cover the costs of treatment or rehabilitation incurred by the player, for which the player had previously received written consent from the club, within which the club accepted the estimated costs of treatment or rehabilitation, provided that the declaration of contract termination is submitted within one month from the date of occurrence of any of the events;

– The club has been relegated to a lower league due to events other than sporting competition, based on a final judgment issued by the relevant disciplinary body of the PZPN, provided that the declaration of contract termination is submitted within one month from the date of the finality of the disciplinary judgment.

 

I would like to point out a few important provisions of the resolution that have an impact on the interpretation of the above-mentioned regulations. Firstly, according to point 8.3 of the resolution, the player has the right to unilaterally terminate the contract due to the club's fault (cases listed above) by submitting a written declaration to the club, under the penalty of invalidity. Point 8.6 provides, on the other hand, that declarations referred to in paragraphs 3-5 (including those submitted by the player and listed above) are considered submitted upon delivery of the document with confirmation of receipt or within 3 days from the date of sending to the addressee at the email address specified in the Contract of the scanned document bearing the signatures of authorized persons. Furthermore, declarations referred to in paragraphs 3-5 should be submitted simultaneously to the body conducting the competitions, and provision 8.6 applies accordingly. What does this imply?

 

Firstly, for the validity of the declaration, it is necessary to maintain the written form, so oral declarations made to persons representing the club or the email message alone (without the appropriate attachment) do not meet the form requirement. The second important issue, especially in situations of contract termination due to reasons such as non-registration for matches, lack of insurance, lack of reimbursement of medical costs, or relegation to another league for non-sporting reasons, is the deadline for submitting the declaration of intent. The PZPN has stipulated that the declaration should be submitted within one month from the occurrence of the event. Therefore, the question arises whether the declaration must be made in writing within one month from the date of the event marking the start of the deadline or whether it must reach the club before the expiration of this deadline. The resolution of this issue is of significant importance, as illustrated by the following example.

 

Team X is penalized and relegated by the PZPN to a lower league. The disciplinary body's ruling became final on April 30, 2016. A player from club X sent an email with a scanned signed declaration of contract termination for this reason on May 30, 2015. According to the first interpretation, the declaration is effectively submitted, and the contract is terminated. However, according to the second interpretation, considering the provision that the declaration sent via email is considered submitted to the other party within 3 days from the date of sending, which in this case would be June 2, 2016, the declaration is submitted after the deadline and does not have legal effect.

 

Which of the above interpretations is correct? In my opinion, the second one, which assumes that the declaration must be submitted to the other party before the prescribed deadline. In my view, this is determined by the content of Article 8.3, which states:

 

The player has the right to unilaterally terminate the Contract due to the fault of the Club by submitting the declaration to the Club in writing, under the penalty of invalidity, only in the following cases.

 

The Civil Code provides that a declaration of intent, which is to be submitted to another person, is submitted at the moment when it reaches that person in such a way that they could familiarize themselves with its content. The PZPN resolution modifies this rule by adopting that the declaration is considered submitted upon delivery of the document with confirmation of receipt, and in the case of sending a scanned document within 3 days from the date of sending. Therefore, since the declarations mentioned should be submitted to the Club (i.e., to another person), the declaration sent on May 30 in the form of a scanned document via email will be effectively submitted on June 2, 2016, which is after the deadline.

 

Unfortunately, this is not the end of interpretational doubts related to the new provisions. As mentioned above, the declaration of contract termination due to the fault of the club should also be submitted simultaneously to the body conducting the competitions, Article 8.6

 

1)Declarations referred to in paragraphs 3-5 are considered submitted to the other Party upon delivery of the document with confirmation of receipt or within 3 days from the date of sending to the addressee at the email address specified in the Contract of the scanned document bearing the signatures of authorized persons applies accordingly. What will be the consequences of not submitting such a declaration to the body?

2)It is worth noting that doubts may also arise regarding the concept of the body conducting the competitions because, for example, in the case of Ekstraklasa teams, one body conducts the league matches, and another conducts the Polish Cup matches; however, for pragmatic reasons, one should lean towards the interpretation that it refers to league matches I believe that in the absence of explicit reservation, this will not result in invalidity, considering that the declaration is submitted to the other party - the Club, and the body conducting the competitions only needs to receive such a declaration.

 

There is also likely no basis for penalizing the player/club for not submitting the document through disciplinary measures, since in the same resolution it was clearly stated that disciplinary responsibility applies to those violating the provisions of Article 4 (which concerns the admissibility of contracts) a contrario and does not apply to those violating other provisions. Therefore, I lean towards the conviction that despite the obligation imposed on the parties to submit the declaration to the body conducting the competitions, failure to fulfill this obligation does not result in negative consequences.

 

In reference to the above-mentioned premises, I will address the one that, in my opinion, will be most commonly used as the basis for contract termination, namely financial arrears. Previously, a player wishing to terminate the contract due to financial arrears could apply to the Chamber for contract termination if the delay in payment of remuneration lasted at least 3 months, and an additional 30-day deadline was set for the club.

Currently, contract termination can take place without the involvement of the Chamber, through the submission of a declaration. However, a condition is the existence of a delay in payment of remuneration for at least 2 months and setting an additional (minimum) 14-day deadline for payment to the club, with the reservation that the failure to pay will result in the player's right to unilaterally terminate the contract. It should be noted that to effectively terminate the contract, the player must first demand payment from the club, and after the unsuccessful expiration of the deadline, submit an additional declaration of contract termination.

 

Contract Termination by the Club

 

The new provisions also grant clubs the right to unilaterally terminate the contract. From now on, the club may terminate the contract with the player in the following cases;

Due to the fault of the player, if:

- The player has been convicted by a final judgment issued by a common court for an intentional offense prosecuted ex officio, provided that the declaration of contract termination is submitted within one month from the date of obtaining officially confirmed information about this fact;

- The player has been punished with a suspension not shorter than 3 months, imposed by the competent disciplinary body, provided that the declaration of contract termination is submitted within one month from the date of the disciplinary decision becoming final;

- The player is subject to a preventive measure in the form of a ban on participation in championship and cup competitions for a period of at least 3 months, which has been applied based on a decision of the competent disciplinary body that has become final;

- The player, except for the goalkeeper, has not participated in more than 10% of the official matches played by the Club in championship and cup competitions in the first senior team throughout the season preceding the season in which the Club submits a unilateral declaration of contract termination, provided that such a declaration is submitted within 7 days from the date of the start of the period of changing club affiliation, in accordance with the current PZPN regulations;

- The player, due to injury or illness confirmed by a medical certificate, has not participated in official matches played by the Club in championship and cup competitions for a period longer than a total of 180 days in a calendar year or in a playing season, provided that the declaration of contract termination is submitted accordingly by January 10 or July 10;

- After the Club's relegation to a lower league due to sports competition, provided that the declaration of contract termination is submitted by July 10, and the Club does not have any arrears in paying the player's contractual remuneration, and the Club pays the player compensation equal to the equivalent of one month's individual remuneration due to the player for professional football, unless the parties agree to change the contract terms.

 

It should be emphasized that declarations made by the club are subject to the same rules as declarations made by players, so the considerations regarding the form of declarations, the moment of submission of the declaration, notification of the body conducting the competitions, etc., remain relevant.

 

The new regulations introduce a certain automatism in the scope of unilateral contract termination, as it is no longer necessary to initiate proceedings before the Chamber for Dispute Resolution. However, both the club and the player may, within 7 days from the receipt of the declaration of unilateral contract termination by the other party, submit an application to the Chamber to establish the ineffectiveness of the declaration or to establish the right to compensation for making declarations in violation of the resolution's provisions.

The resolution provides that declarations of unilateral contract termination have legal effects either after 7 days from their submission (if the other party did not submit an application to the Chamber to establish their ineffectiveness) or from the date of issuance of a ruling by the Chamber in the first instance rejecting the application, because only the finding of the justification of the application in the second-instance stage authorizes the granting of compensation to the party submitting the application or on the date of issuance of the ruling by the Chamber in the appeal proceedings - if the application was granted in the first instance but rejected only in the second.

 

Compensation Liability and Sporting Sanctions

 

In cases of contract termination due to the player's fault or finding no grounds for the player to submit a unilateral declaration of will to terminate the contract, the player will be punished by imposing sporting sanctions and may be obliged to pay compensation. If the contract termination signed before the player reaches 28 years of age occurs due to the player's fault within the first 3 years of the contract, sporting sanctions will be imposed on the player, and the player will be obliged to pay compensation

3)The amount of compensation is determined taking into account the duration of the Contract, the degree of its performance, costs and expenses related to the acquisition of the Player including the transfer fee and the remuneration paid to the transaction intermediary acting on behalf of the Player, which have not been amortized during the term of the Contract. The compensation may be reduced if there are mitigating circumstances for the Player's breach of obligations or his personal or financial situation..

The same applies to a player who has turned 28 years old, and the contract termination occurs due to his fault within the first 2 years of the contract. However, if the contract termination occurs at different times than those mentioned above, no sporting sanctions will be applied (but the club can still demand compensation). In the event that the player submits an unjustified unilateral declaration of contract termination due to the fault of the Club, and this fact is determined by the Chamber, at the club's request, sporting sanctions will be imposed on the player, and the player will be obliged to pay compensation. The resolution provides for two types of sporting sanctions for the player, namely:

 

- a fine ranging from 100 to 100,000 PLN,

- a suspension for a period of 3 to 12 months,

 

Importantly, the execution of the sporting sanction may be suspended with respect to the player for a probationary period of up to 3 years. The suspension can be forgiven after the completion of 1/3 of the sanction.

On the other hand, in cases of contract termination due to the fault of the club or in case of an unjustified unilateral declaration of contract termination by the Club, if this fact is determined by the Chamber, the following sporting sanctions may be imposed on the club:

 

  •  a fine ranging from 1,000 to 500,000 PLN,
  • a transfer ban to the Club for a period not exceeding 12 months,
  • limitation on the possibility of acquiring new players for a period not exceeding 12 months.

 

Similarly to the players, the sporting sanction for the club can be suspended for a probationary period of up to 3 years, or forgiven or mitigated after the completion of at least 1/3 of the sanction 4)does not apply to the fine..
As for the club's compensation liability towards the player, it is obliged to pay the player's lost remuneration until the end of the contract period reduced by the player's income obtained from playing in another club.

 

Summary

 

The situations described above are not the only conditions that can be the basis for terminating a player's contract. Both the club and the player can apply to the Chamber for the termination of the contract due to the fault of one of the parties or for reasons not attributable to either party. The exemplary situations provided in the resolution include the termination of the contract by the player:

 

- for whom the Club obliges to individual training sessions when such sessions are not justified by medical reasons or objective training reasons;

- above the age of 23, when this Player participated in less than 10% of the official matches played by the Club in championship and cup competitions in the first senior team throughout the season; this right does not apply to goalkeepers.

 

The introduced regulations may have a significant impact on the transfer market in Polish football. Both the club has received tools through which it can get rid of players who have not lived up to their expectations (for example, a low number of appearances due to poor sporting form), and players can relatively easily part ways with a club that does not fulfill contractual conditions, especially financial arrangements. It is possible that the introduced provisions will have a greater impact on the football market than the new regulations concerning intermediaries.

 

 

It is worth emphasizing that the discussed provisions apply to contracts concluded even before the entry into force of the commented resolution.

 

Photo: candami / Foter / CC BY

 

 

  1.  Declarations referred to in paragraphs 3-5 shall be deemed to have been made to the other Party upon delivery of the document with confirmation of receipt or within 3 days from the date of sending to the addressee at the e-mail address specified in the Contract of the scanned document signed by authorized persons.
  2. Note that doubts may also arise regarding the concept of the body conducting the competitions, because, for example, in the case of extraleague teams, a different body conducts league competitions and another conducts the Polish Cup competitions; however, for pragmatic reasons, it should be assumed that it refers to league competitions.
  3. The amount of compensation is determined taking into account the duration of the Contract, its performance, costs, and expenses related to the acquisition of the Player, including the transfer fee and remuneration paid to the transaction intermediary acting on behalf of the Player, which have not been amortized during the term of the Contract. The compensation may be reduced if there is a minor breach of duties by the Player or his personal or financial situation.
  4. Does not apply to the monetary penalty.