Player Contracts and the Coronavirus Job Retention scheme
Covid-19 Guidance on the FA Standard Football Player Contract – Steps 1 to 6 of the National League System
Introduction
The FA is mindful of the significant impact of the worldwide health crisis and the uncertainty this has caused regarding the 2019/2020 playing season and the contractual relationships between clubs and players. The purpose of this note is to provide guidance to clubs on player status matters arising from the COVID-19 crisis. We have answered a number of frequently asked questions below, but clubs are reminded that the particular facts and circumstances of a case means that there is unlikely to be a standard answer to each scenario.
The Coronavirus Job Retention Scheme
You will have seen the recent government announcement about the Coronavirus Job Retention Scheme. Government guidance on the scheme, as well as other programmes offered by the government to support businesses in the current health crisis, can be found at the following link: https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19
Information is also included in the National League System Coronavirus update being circulated by The FA on a regular basis.
Shortly after the scheme was announced, The FA contacted the Department for Digital, Culture, Media and Sport (‘DCMS’) and asked them to confirm (amongst other things) how the scheme will apply to clubs in the National League System.
DCMS have confirmed that the scheme applies to all employees and workers who were employed as at 28 February 2020 and are paid using the PAYE system and that they intend for the scheme to apply to the sports sector.
At the time of writing, DCMS have not explicitly confirmed that the scheme can be accessed by clubs in the National League System. The FA has sought to answer some frequently asked questions as they may apply to clubs below, but we would recommend that should clubs wish to use the scheme, they should also review the government guidance which can be found at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme and contact the government for further details on how to access and apply for the scheme and for any other information on how the scheme will work in practice.
Frequently Asked Questions
Contract and Registration matters
The NLS standard form contract does not contemplate a suspension or termination of the kind currently being faced. As a result, there is no single solution that we can advise clubs and players to follow and each set of circumstances will be different.
What happens about current player contracts the club has?
The general position under the standard form contract is that it will remain in force until the latter of the first Saturday in May (2 May 2020), or the final league or cup match of the Club’s first team. A club is required to pay its players in accordance with Schedule – Part 1 whilst the contract remains in force.
There is no provision within the standard form contract itself which allows for termination outside of one party’s misconduct.
What about for Leagues where the season has been terminated?
At the time of writing, ratification of the termination of the season at Steps 3-6 is still to be given by FA Council. However, if the season is ended prior to 2 May 2020 without all fixtures being fulfilled, the contract (and the obligations that go with it) will remain in force until 2 May 2020 – provided that the contract is not validly terminated sooner or the parties have not mutually agreed to cancel.
We are aware that some legal firms and media outlets have discussed whether players’ contracts are frustrated due to the current crisis and the inability of clubs to play football. Frustration is a legal doctrine which is open to interpretation. Whilst we appreciate the desire from clubs and players to have clear guidance from The FA on all of their rights and obligations in this current crisis, this is not something which The FA is able to advise on as a sports governing body and it is a matter for independent legal advice.
We would strongly encourage players and clubs to reach a mutual agreement regarding their obligations and explore all commercial options available to them regarding the payment of wages.
Can I try and reach an agreement to terminate with my contracted players?
Clubs who wish to terminate their player contracts prior to their end date should seek to reach mutual (and documented) agreements with their contracted players. Any such agreement must be submitted to The FA Player Status team and the relevant League using the standard cancellation form.
As stated below, neither the FA Rules nor the standard form contract provides an ability for unilateral termination of the contract absent any misconduct by either party.
Could the Club agree to vary the player’s contract?
Yes, clubs who wish to vary the terms of a player’s contract may do so with the consent of the player on a contract variation form which must be signed by both parties and submitted to the league and FA.
A club may also seek to agree a deferment of a player’s wages – again, any agreement between the parties should be documented, signed by both parties and submitted to The FA and the relevant League of which the club is a member.
Again, there is no provision in either FA Rules or the standard form contract for unilateral variations or deferment.
We can’t afford to pay our contracted players and can’t reach an agreement with them. What should we do?
If possible, clubs should seek independent legal advice regarding their obligations. We suggest clubs also look carefully at the assistance the Government is providing in these circumstances as detailed earlier in this document.
In the event of a dispute arising due to the termination of a contract then there are mechanisms designed to deal with such situations in the standard contract, league and FA Rules.
What happens with loan players we have at the club?
As with standard contracts, loan agreements will remain in place until the specified end date, on the financial terms agreed between the parties, unless clubs can mutually agree to an early termination or variation of the financial terms. In the event that clubs do agree to an early termination of a loan agreement with the parent club and player, this will need to be lodged with and approved by The FA and relevant League(s). Clubs who wish to offer re-engagement to a player for next season (or exercise an option in a player’s contract) and thereby protect any compensation rights are still required to do so in the 7 days following (i) the first Saturday in May or (ii) the date of the last competitive Match of the Club’s first team, whichever is the later (as required by the standard contract as well as FA Rules). Any offer or option must be on the same or not less favourable terms as the player’s current contract.
Clubs should continue to honour the contracts of such players in the intervening period, or the attempted re-engagement or exercise of option may not be valid.
Can we offer contracts for next season?
If a club wishes to retain a player (or players) but are not in a position to formally offer re-engagement at this time, they may nevertheless enter into sensible discussions with the player about arrangements for next season. However, in doing so, both parties should be aware that under the current conditions, there cannot be complete clarity about when next season will commence (and therefore finish).
Government Job Retention Scheme
Which players are we able to furlough?
Government guidance is that all employees with a contract on PAYE (whether fulltime, part time, zero hour or casual/agency) are able to be furloughed.
How much can we claim?
The club would therefore need to be comfortable that it had an employment contract at the relevant date(s) with any player it wishes to furlough. Employers are able to claim 80% of an employee’s salary, up to a maximum of £2,500 per month.
What if a player signed for the club after 28th February?
The cut-off date for employees able to be furloughed is the club’s payroll on February 28th. If a player was not on a club’s payroll on this date then they are unable to be furloughed.
Which period can we claim for?
Employers can currently claim for a maximum period of three months with a minimum of three weeks. However, a club is unable to claim after the date of the expiration of a player’s contract.
This is my player’s second job – Can he still be furloughed?
Yes, the grant is for the benefit of employers and therefore each of an individual’s employers would be able to make a claim for 80% of his contracted wages, up to a maximum of £2,500 per job.
What happens to the player’s registration if he is being furloughed?
A player’s registration remains unaffected by the furlough process. Details of any furloughing of contracted players should be submitted to The FA. Clubs should check with their League whether they also require these details. However, should the club wish to retain or exercise an option on a player being furloughed under the retention process outlined above, they must offer him the same or not less favourable terms than those which applied under the terms of his original contract.
We are seeking to furlough our players – Does the club need to pay the full 100% of the players wage?
The Government have made it clear that employers are not obliged to pay the 20% top up of an employee’s salary. However, furloughing would need mutual agreement with the player.
A failure to gain agreement with the player for him to be furloughed could lead to a dispute arising between the parties. As stated above, there are mechanisms designed to deal with such situations in the standard contract, league and FA Rules.
What is the position around loan players?
If a player is paid through the payroll of the parent club and the contract is between the player and the parent club, then it is our understanding that the furlough process would be available to the parent club. In other circumstances, Clubs are guided to follow the principles of the furlough scheme and reminded that HMRC hold the right to retrospectively audit any claim. It is recommended that dialogue is entered into between the two clubs concerned. It is also important to remember that the minimum term for furlough is three weeks and as such loan agreement length must be considered.
Can the FA provide specific legal advice?
Unfortunately not. The FA is a neutral party and a sports governing body so unable to provide legal advice specific to individual club’s circumstances. We appreciate that not all clubs and players will have access to legal resources (and, even if they do, some of these may not be available in the current environment) which is why we strongly encourage agreements or alternative mutual solutions to be reached where possible, and to avoid taking unnecessary legal action.
We will endeavour to provide further guidance to parties on these issues in due course as the situation develops. Please note we are currently reviewing FA Rules and Regulations to understand whether any emergency changes are required for the 2019/2020 season. Given the fast-moving nature of the existing situation this work is ongoing.
For the avoidance of doubt, for the reasons outlined above, this document is for general guidance purposes only and does not (and is not intended to) constitute legal advice.
If you have any further queries which are not addressed in this note, please direct them to The FA Player Status Department on registrations@thefa.com.
