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Michael Appleton was in his second managerial role at Blackburn Rovers and lasted 15 games and 67 days before he was sacked by the club. He was one of three full-time managers and three caretaker managers to be employed by the Lancashire club this season.

Short-serving managers such as Appleton are offered limited protection by English employment law. Appleton is by no means alone.  According to the Warwick Business School the life expectancy of a manager is getting shorter by the season.  In the Premier League the average tenure of dismissed managers is 1.66 seasons as compared with an average of 1.82 seasons over the previous five campaigns. In the npower Championship it is currently just under a season. Remarkably, Nigel Clough is already the ninth longest serving current manager in English football having served four full seasons at Derby County.

Loss of income is not the only danger for dismissed managers. According to the Warwick Business School, over half of first-time managers who are dismissed fail to get re-hired for other managerial roles. In the absence of any defamatory comment by the club or unfair dismissal, there is no basis currently under English law for a manager to recover compensation for any damage that may be caused to his future earning potential or to his reputation due to the manner of his dismissal from the club. There is therefore little to compensate managers who have not yet been able to forge a good reputation in the industry prior to their dismissal.

Clubs who stick by their manager often reap the rewards. Stoke City have spent five of the seven seasons under Tony Pulis’ second tenure in the Premier League, having previously spent 23 consecutive years outside of the top flight under 17 different managers. Everton had tried eight different managers in the Premier League prior to David Moyes being appointed and only achieved a top-10 finish once. Moyes has guided Everton to at least the top eight in the last six seasons; and 27 seasons under Sir Alex Ferguson have yielded, amongst many other trophies, 13 league titles for Manchester United compared with none for the club for almost a quarter of a century before that. None of these managers were especially successful initially at these clubs.

Financial Fair Play rules, already adopted by UEFA and the Football League and soon to be introduced by the Premier League, may persuade clubs to adopt a less trigger happy approach to hiring and firing, because of the expense. When a manager is appointed he often brings with him his own backroom staff; when he departs, the majority tend to depart with him. Clubs that fail to meet the league’s minimum break even criteria are expected to face significant sanctions.  There is therefore a greater emphasis on clubs to appoint the right manager; and for the manager to be given time to implement his ideas and mould the team in his image.

Club owners and boards are often cast in the role of the axe-wielders; of course they can also be the victims. Whilst Premier League rules and the rules of the Football League offer clubs some protection by prohibiting rival clubs from courting their managers, and prevent those managers from approaching other clubs or reciprocating their advances, such practices do occur and it is rare that disciplinary sanctions are imposed against dissenters by the leagues. When jilted by their manager in such circumstances clubs can with good reason argue that they are entitled to a remedy.  

Sacking football managers can therefore be an expensive and reputationally damaging business for both clubs and managers. There are, however, a number of ways in which the effects of what has traditionally been considered as part and parcel of the football industry can be mitigated.

These are examined in turn:

1.             New Employment Laws will encourage greater dialogue

The Enterprise and Regulatory Reform Bill will be enacted later this year and will provide greater scope for clubs to engage in meaningful discussions with managers without the fear of such discussions being admissible in court as part of unfair dismissal claims. Provided that clubs follow the recommended procedure by writing to the managers prior to meeting them face-to-face, the new “protected conversation” rule enhances the opportunities for clubs to settle with managers, part ways relatively amicably and avoid the employment tribunals, the costs, and of course the negative publicity that goes with it. 

The new rules may encourage clubs to develop new lines of communication between the board room and the dug-out where previously clubs would be paralysed from initiating such discussions for fear that they would come back to bite them in the courts. But the rule is designed for working relationships that are beyond the pale, rather than to reconcile or re-assess performance targets, so the right to have regular appraisals should be set out in the manager contract. However, where there is no prospect of reconciliation between the parties the new rules do encourage settlement discussions to be freely entered into and for important issues such as compensation and PR /media approach to be negotiated – and perhaps to the benefit of both club and manager.

2.             The referee’s decision is final

Employment tribunals and the civil courts are not necessarily ideal forums for manager/club disputes. Future employers or employees may be put off by a manager or club who is prepared to have their day in court, or in a tribunal. Statutory employment claims are restrictive in terms of the qualifying period required.

Tribunals may not offer adequate additional compensation in addition to any financial terms set out in the contract. When the new employment laws are passed later this year, the maximum compensation payable to an employee in an employment tribunal will be the lesser of £74,200, or a year’s salary.  Wrongful dismissal claims awards in tribunals are limited to £25,000.  Such caps were not designed to keep track with the multi-million pound football industry. Tribunals also require each side to pay its own legal costs. 

Court proceedings are expensive. Of course there is no limit on the compensation which can be recovered through the High Court. However, legal costs dwarf those of the employment tribunal and the losing party will bear the other side’s legal costs. The new rules regarding Conditional Fee Agreements may make such arrangements less attractive to the client.

By contrast, the Premier League requires all of its member clubs and their managers to refer any dispute between them for determination by the Premier League Managers’ Arbitration Tribunal (“MAT”). The terms of the published decision to award Kevin Keegan £2 million plus indemnity costs for his constructive dismissal claim against his former employer Newcastle United in 2009 gives hope to managers that the Tribunal has the capacity to address industry specific issues such as managerial autonomy and that it will in certain circumstances award significant compensation sums. (It could also be argued that it gives hope to clubs too, since Keegan’s claim was for in excess of £8 million.) In the same year, Alan Curbishley succeeded before the MAT on the same grounds in relation to his dismissal by West Ham United in 2008.

Managers and clubs may also be reluctant to let High Court judges or employment tribunal panels, who may be unfamiliar with the specific nature of the football industry, to rule on such disputes.  By contrast, the MAT panels consist of leading barristers who tend to specialise in both employment law and sports law issues.  Appeals from tribunals can only be on legal issues; not a misunderstanding by the Tribunal of the workings of the football industry. 

There is therefore a real urgency for those advising clubs and managers, especially those operating in the Football League, to ensure that the manager contract precisely reflects the specific nature of managing a professional football club and the rights of both the manager and club if one party chooses to break away.

3.             Getting the contract right

A well-drafted manager contract which protects both the club’s and manager’s interests can serve as a useful reference point to settle disputes out of court, or to direct tribunals and courts as to the parties’ original intentions when they first decided to work together. 

The level of regulation governing the employment of and the transfer of players in both the Premier League and the Football League is in stark contrast to that in place currently for clubs and managers. 

As an example, neither league stipulates a compulsory form of manager contract (save in relation to dispute resolution in the case of the Premier League).  Therefore it is open to the parties to map out the terms of the manager’s contract as they see fit. 

The League Managers Association has developed a model contract of employment for managers operating in the Football League, which is being used increasingly by football clubs and their managers.

Important issues which frequently form the basis of disputes between managers and clubs and which should be addressed in the manager contract include issues such as:

o    the terms upon which a contract may be terminated early;

o    the level of control which a manager will be able to exert over team matters such as team selection, player acquisition and player disposal – or whether the manager is operating under and answerable to a European style “director of football”  

o    the performance targets of the manager – such as promotion, European qualification or avoiding relegation

o    regular appraisals at which performance targets may be re-visited in light of changing circumstances both on and off the field of play

o    contingency plans in the event that the club is relegated

o    the circumstances in which the club must inform the manager of an approach by another club for the manager’s services; and

o    whether the manager can carry out any additional media roles to fit around his managerial duties.

Copyright of Anil Matharu, Senior Associate in the Sports Group at Harbottle & Lewis LLP, the leading media and entertainment law firm.

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