Inn the Field of Play - When might an athlete claim constructive dismissal?

Insight

05.04.2018

It is well established, under English law, that a duty of trust and confidence will be implied into all employment contracts. Where an employer does breach this implied term, the employee can then, provided they do not delay and thereby waive any breach, resign with immediate effect and treat themselves as having been constructively dismissed by their employer.

When might an athlete claim constructive dismissal? It is well established, under English law, that a duty of trust and confidence will be implied into all employment contracts. Whilst historically there have been several iterations of this implied term, the accepted formulation is as follows:

"employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence or trust between employer and employee." (Woods –v- WM Car Services Peterborough Limited [1981] ICR 666)

Where an employer does breach this implied term, the employee can then, provided they do not delay and thereby waive any breach, resign with immediate effect and treat themselves as having been constructively dismissed by their employer.

In a sporting context, this would then allow the athlete to claim damages for the remaining term of their contract (assuming there is no break clause) as part of a wrongful dismissal claim. In addition, where they have two or more years' service, they would, at least in theory, also be entitled to claim additional compensation for unfair dismissal. However, such compensation will generally be capped at the lower of 52 weeks' pay and £83,682 and would not be awarded if the damages from any wrongful dismissal claim already provided sufficient time for the athlete to mitigate their losses by finding new work.

Given claims for constructive dismissal are extremely rare within sport, I thought it would be interesting to consider the doctrine in the context of two topical cases, namely Luke Shaw's situation at Manchester United and Steve Smith's recent suspension by Cricket Australia (admittedly the latter requires some extension of reality given English law would clearly not be applicable!).

Shaw's situation

There has been a lot of recent press interest regarding Jose Mourinho's treatment of Shaw (which seems to go some way further than Mourinho's side lining of Bastian Schweinsteiger during the 2016/2017 season).

Mourinho has not been picking Shaw and when he did pick him against Brighton in the FA Cup, he substituted him at half-time. He has also been extremely critical of him in public, questioning his commitment to the Club, his application in training, his positioning, his defending and his performances more generally. Indeed, the press reported that a source "close to Shaw" had stated that "Mourinho's treatment of Luke is an absolute disgrace. If he has a problem with him the decent thing to do would be to keep it in-house. If this kind of abuse happened in any other workplace there'd be a case for constructive dismissal."

The Plaku case

Whilst very different facts, the Court of Arbitration for Sport ("CAS") ruled on Sebino Plaku's constructive dismissal claim against Slak Wroclaw, a Polish Football club, in 2016. Plaku was a 21 year old Albanian footballer and he claimed that:

Wroclaw had sought to impose a pay cut on him, nearly two years out from the expiry of his fixed-term employment contract;
having refused to agree the pay cut, he was moved to the second team and then ordered to train alone in order to "get back to his normal sporting level";
he was required to train three times a day, meaning he had to leave home at 6.45am and not return home before 9.30pm;
deductions were made to his salary for four separate months;
he was required to train during periods when other players were on holiday and was not allowed a day off over Christmas; and
he also received disciplinary fines totalling 20,000 Euros.

FIFpro, the player's union, reported that CAS, in ruling on the case, had stated that Plaku had been treated "appallingly" and that he had just cause to terminate his contract with Wroclaw. Whilst not a case involving English law, this does provide something of an indication as to the approach CAS might take on these types of issues.

Isn't the football industry a special case though?

It is often said, as the source close to Shaw quoted in the press seemed to imply, that the football industry is unique and that football clubs should not be subject to the same rules as other employers. However, this argument has already been rejected, in the specific context of a constructive dismissal claim, by the Employment Appeal Tribunal. In the case of McBride –v- Falkirk Football Club [2012] IRLR 22, the Employment Appeal Tribunal held that the Club could not, in seeking to defend Mr McBride's claim for constructive dismissal, rely on the fact that it and others in the industry traditionally treated employees in a brusque and robust manner. Instead, the Employment Appeal Tribunal made it clear that it was for the Tribunal to assess objectively whether the conduct in question was calculated or likely to destroy or seriously damage the relationship of trust and confidence between the employer and employee.

There are also other examples of constructive dismissal claims being upheld within football. For example, in a more high profile case in 2009, the Premier League Managers' arbitration tribunal upheld Kevin Keegan's claim for constructive dismissal against Newcastle, reportedly awarding him £2 million.

What level of conduct is necessary to amount to a breach of the trust and confidence?

It is, however, clear that mere "unreasonable conduct" will not be sufficient to breach the implied term of trust and confidence. Instead, more is required and the conduct must be so serious to go to the very heart of the employer's relationship with the employee. The Honourable Mr Justice Langstaff (who was previously President of the Employment Appeal Tribunal) stated, when speaking to the Employment Lawyers Association in 2012, that:

"the implied term of trust and confidence is cast in contractual terms, against a well-recognised background that an employer has no general (contractual) obligation to treat his employees reasonably. But unreasonable conduct by an employer is so often said by a claimant to be a breach of the implied term of trust confidence that there are some Employment Tribunals which have [wrongly] accepted this."

Where does Shaw stand?

In Shaw's case, if the press reports are to be believed, his treatment must be very close to providing him with grounds to resign and claim constructive dismissal.

If that's the case why hasn't he resigned?

If a player resigned in response to a breach of the implied term and could legitimately claim they had been constructively dismissed, they would, as stated above, be entitled to bring a contractual claim against their club for wrongful dismissal (on the basis that, whilst they had resigned, the Club would be deemed to have dismissed them in breach of contract). The player would then claim damages equivalent to the sums they would have received during the remainder of their contract.

So far so good. However, the player would also be under a duty to mitigate their losses by actively seeking a new contract with a new club and, if they did secure a new contract, would have to give credit for the sums received under that new contract. In addition, they would also be faced with the commitment, delay, uncertainty and expense of having to issue arbitration proceedings, at least in relation to the wrongful dismissal element of any claim, in order to recover the sums due to them but also to establish that they were no longer under contract with their old club and were free to move to a new club.

As a result of the above, players will often prefer to remain with their club, whilst perhaps seeking assurances that they will be allowed to move if the right move comes up. They can then wait for that move secure in the knowledge that their salary will continue to be paid until it does.

How does Steve Smith's situation compare?

If, hypothetically, Steve Smith did have access to English law rights, the key issues in his case would be whether:

(a) looking at the formulation of the implied term from Woods, Cricket Australia had "reasonable and proper cause" for imposing a 12 month suspension on Smith. This is likely to come down to whether the length of suspension was proportionate to his conduct;

(b) the suspension period could be deemed to amount to an unlawful restraint of trade, which would be of greater assistance to Smith, as he could then challenge the validity of the suspension without having to resign. Whether or not the suspension was an unlawful restraint again comes down to whether it is proportionate to the conduct in question and whether it breaches the public interest in freedom of trade;

(c) finally and even more importantly, whether it would serve Smith's interests to challenge his suspension, whether by resigning and claiming constructive dismissal or via the restraint of trade doctrine, given the further impact this could have on public opinion, which is already very much against him, and given his wish to play for Australia in the future.

As it is, readers will have seen that it has been reported this week that Smith will not be appealing the suspension and so Cricket Australia seem to have got the balance right in picking a period of suspension that sends a very strong message but not one so long that Smith is forced to litigate.

If you require further information on anything covered in this briefing please contact David Hunt or your usual contact at the firm on 020 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.