Disclaimer of a Football Player's Pay Claim

Date 26 mar. 2013
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18 February 2013, the Danish Eastern High Court ruled that the Employees' Guarantee Fund (normally known by its abbreviation, LG) was entitled to issue a disclaimer in respect of a football player’s pay claim. The football player’s claim for full pay during the remaining contract period was not met.

 

The Case in Brief

The case involved a professional football player who had two years and three months left on his player contract at the time of the employer’s (the football club) bankruptcy. The player contract was drafted from a contract template of the Danish Football Association and entered into in accordance with the applicable collective agreement. Playing football was a sideline activity for the player.

 

The football player was given notice of termination in connection with the football club’s bankruptcy. He later received pay from the Employees’ Guarantee Fund for the remaining part of the month as well as compensation for pay for the subsequent three months as a result of the Employees’ Guarantee Fund issue of a disclaimer of the agreed time limitation and irrevocability.

 

The football player argued that the special conditions that apply to professional football players, particularly the use of longstanding irrevocable contracts and the special rules regarding club transfers, indicate that the Employees’ Guarantee Fund was not in its right to issue a disclaimer changing the period of notice to the current month plus three months. The football player also argued that the Danish Insolvency Act’s rules regarding a disclaimer of unusual conditions were not applicable at all seeing as the conditions on longstanding and irrevocable contracts were not unusual in the industry.

 

The Court’s Explanation

The Court found that the player contract was in compliance with the collective agreement and that the terms of the employment were not unusual in the industry.

 

The Court explained that the Bankruptcy Act Section 61(1) allowed for an agreed time limit and irrevocability to be adjusted with effect for the insolvency estate and thus the football player. Consequently, the Court found that the insolvency estate had taken the interests of the football player into sufficient consideration by providing him with an income for a transitional period of three months in order for him to find other employment. Furthermore, the Court based its ruling on the principle of equality in insolvency estates and therefore found that the Employees’ Guarantee Fund’s disclaimer of the football player’s pay claims was legitimate.


Our Assessment

The decision shows that the Employees’ Guarantee Fund has the possibility of issuing a disclaimer in respect of a professional football player’s contract which means that notwithstanding an agreed irrevocability, the contract can be terminated at regular notice despite the fact that the terms in the contract are not unusual in the relevant industry.


 

If you have any questions or require additional information on the decision or on any other sports law issues, please contact Senior Associate Pernille Nørkær (pno@mwblaw.dk) or Junior Associate Mattias Vilhelm Warnøe Nielsen (mvn@mwblaw.dk).


The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.