With Leeds United's sacking of Javi Gracia, a record 14 Premier League managers have now been dismissed from their respective clubs in the 2022/23 season, and there are no doubt others who are feeling more than a little nervous about their future. With substantial rewards from prize money, sponsorships, and broadcast deals for staying in the Premier League or qualifying for European competitions, these commercial incentives have led to many clubs opting to change the manager when the season starts going awry.
Irrespective of their high-profile status, football managers have the same employment rights as any other employee. As clubs are understandably more focused on making commercial decisions at speed, given the high stakes at play it is unlikely a fair process will be followed, even for those managers with more than two years' service and unfair dismissal rights.
An Employment Tribunal claim would act merely as a protective measure. As most Premier League managers are paid considerably more than a million pounds annually, the statutory cap on compensation for unfair dismissal (currently £105,707) means it is often preferable for managers to explore alternative options.
Litigation is rare, and most contracts contain arbitration clauses where disputes are referred to the Premier League Managers' Arbitration Tribunal. There is a tension, however, with employment or discrimination claims, which are normally excluded from arbitral proceedings save in narrow circumstances (this is due to an individual's inability to contract out of their statutory rights). In practice, it will be a matter of looking at the contractual terms (which often provide for these scenarios) and some tough negotiations.
Early termination provisions and settlement
Given the public nature of football managers' dismissals, it will be in both sides' interest to agree on terms to avoid going through the courts and taking up more of the sports columns than is necessary.
It is usual for a manager's contract to include early termination provisions and so it is important for their agents and lawyers to consider these carefully before the manager signs up to them. These provisions put in place terms that will apply if the club were to dismiss the manager before the end of the contract in order to ensure a clean and swift exit. The terms will vary depending on what the parties agreed, but these normally allow a club to terminate the contract immediately, for any reason, on serving written notice. Where the manager is not in breach of contract and on the condition they enter into a settlement agreement, other sums may be offered as a sweetener. It is common for managers to continue to be paid until an agreed date (normally the earlier of them commencing employment elsewhere or the expiry date of the contract).
Areas of Contention
Despite any early termination provisions, disputes can arise with some of the exit terms, and there are others where it is worth negotiating.
Bonuses are a key issue, albeit if the manager is being sacked on the basis of the team's performance, it is unlikely they will be able to argue that they have met the terms for payment.
Another key negotiating point is restrictive covenants. Managers' contracts will include post-termination restrictions which prevent them from taking key members of staff with them. As managers will have their own trusted coaching team, it is usual to look to secure a carve-out in any settlement agreement, to allow the manager to take them with them to their next club.
What can we do?
Our sports team at Howard Kennedy provides straightforward advice across a wide range of legal matters, advising both clubs and individuals.
If you are seeking specific advice in relation to issues raised in this article, or more general employment or sports law advice, please contact Sam Murray-Hinde or James Millet.