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FIFA update on COVID-19 – key issues and proposals

Friday 17th April 2020

On Tuesday 7 April, a working group established by the Bureau of the FIFA Council (the ‘Working Group’) published a set of guidelines (available here) to deal with the impact of COVID-19 on the football industry and a number of key issues that will need to be resolved in the coming months.

The Working Group has confirmed that the principles set out under the first two headings below are to be considered as “general interpretative guidelines” to FIFA’s Regulations on the Status and Transfer of Players (the ‘FIFA RSTP’). The proposals are, therefore, non-binding; however, FIFA has said it expects “the necessary level of cooperation and compliance” with these guidelines from the Member Associations and other football stakeholders.

#Expiring and new agreements

FIFA’s recognises that employment contracts and transfer agreements in football are generally tied to the registration periods and, as such, the postponement or suspension of league competitions will likely impact on the original start and end dates of such agreements. This, in turn, potentially impacts on the integrity of football competitions. FIFA’s proposals therefore seek to combat these issues, whilst trying to reflect the true intention of parties and the related provisions of the FIFA RSTP.

Regarding employment contracts, the proposals (which, it is important to note, are subject to the primacy of national law) are:

  • for agreements due to expire at the original end date of the season, such agreements should be extended until the new end date of the season;
  • for agreements due to commence at the original start date of the season, such agreements should commence on the new start date of the season; and
  • in case of overlapping seasons and/or registration periods, and unless all parties agree otherwise, priority should be given to the former club to complete its season with its original squad, in order to safeguard the integrity of a domestic league championship.

Whilst the measures above may reflect the parties’ original intentions, under the laws of England and Wales at least, clubs would require the consent of its players/future players before any changes can be made to their employment contracts. Changes could not be imposed unilaterally.

The Working Group has specified that the above principles should apply to international transfer and loan agreements by analogy. It has added that any payment contractually falling due prior to the new commencement date of a season should be delayed until the new start date of the season or its first transfer window. In light of this, clubs should check any outstanding payments they are due/they owe under such transfer / loan agreements, to see how they may be affected. Clubs may also want to consider if and how any other obligations under such agreements might be impacted (e.g. dates by which options have to be exercised).

#Agreements that are frustrated as a result of COVID-19

In respect of agreements that cannot be performed as the parties originally anticipated as a result of the COVID-19 outbreak, FIFA’s proposals seek to balance the need for players and coaches to receive some form of salary payment during the global crisis, with the need to ensure clubs do not go bankrupt. FIFA’s focus is, to the extent possible, to find “a fair solution for clubs and employees” on a global basis, to avoid football stakeholders receiving drastically different treatment.

The Working Group has thus proposed (again, subject to national employment and/or insolvency laws) that:

  • clubs and employees (players/coaches) be encouraged to work together to find appropriate collective agreements on a club or league basis regarding employment conditions for any period of suspended competition and, where the relevant social partners exist, agreement should be reached within a collective bargaining structure (‘CBA’) or another collective agreement mechanism;
  • unilateral decisions to vary agreements will only be recognised where they are made in accordance with national law or are permissible within CBA structures or another collective agreement mechanism;
  • where clubs/employees cannot reach an agreement or national law does not address the situation or collective agreements are not applicable, unilateral decisions to vary contracts will only be recognised where they are deemed reasonable by the DRC or PSC – the Working Group sets out principles the DRC or the PSC may wish to consider when coming to such decision (such as the economic situation of the club, the proportionality of any salary amendment and whether the decision applied to the entire squad or specific employees); or
  • alternatively, all agreements between clubs and employees should be “suspended” during any suspension of competition provided proper insurance coverage is maintained and adequate alternative income support arrangements can be found.

As above, under the laws of England and Wales, clubs require the consent of the employee to change the terms of his/her employment, so if an agreement cannot be reached, whether individually or within the CBA structure, it is hard to see how the other recommendations could help to achieve a satisfactory outcome or lead to a decision that would not be open to challenge. That said, when engaging on such issues, football stakeholders should be mindful of the spirit / purpose of FIFA’s proposals, and that their conduct at this difficult time will likely be taken into account should any dispute subsequently arise – ultimately, if a party acts in bad faith and/or is unreasonable, this could later have a negative impact on the outcome of their case.

#Transfer Windows

The Working Group recognises the difficulty caused by COVID-19 in relation to transfer windows given that under the FIFA RSTP, players can only be registered during one of the two annual transfer windows.

The Working Group recommends that:

  • all requests for an extension of the current season finishing date be approved;
  • all requests to extend or amend registration periods that have already commenced be approved, provided that their duration complies with the maximum limit in the FIFA RSTP (i.e. 16 weeks);
  • all requests to amend or postpone registration periods that have not commenced be approved, provided that their duration complies with the maximum limit in the FIFA RSTP;
  • member associations be permitted to amend season dates and/or registration periods, either within the TMS or by notifying FIFA manually; and
  • as an exception to Article 6.1 of the FIFA RSTP, a professional whose contract has expired or been terminated as a result of COVID-19 should have the right to be registered by an association outside a registration period, regardless of the date of such expiry or termination.

The last bullet point in particular will be welcomed in this period of instability, especially by players. It will be important to ensure, however, that any relaxation of this provision is not abused and that a consistent approach is adopted when determining whether the expiry/termination is COVID-19 related.

FIFA has specified that these guidelines may be subject to further development as the COVID-19 situation develops. Please follow us on Twitter or LinkedIn to keep up to date with any further developments.

If you would like more information on any of the points raised above or any advice in connection with the same, please contact Matthew Bennett (Partner) – or Stuart Baird (Partner) –