PFA Chief Executive Brendan Schwab explains the FIFA Regulations that entitled goalkeeper Ante Covic to unilaterally terminate his playing contract with Newcastle Jets and transfer to Swedish club Elfsborg. This landmark case for Australian players has prompted many calls from players to the PFA’s office.
The FIFA Regulations for the Status and Transfer of Players (“the FIFA Regulations”) aim to promote stability in the contractual dealings between clubs and players. An important part of the FIFA Regulations is what is called the “protected period” – the period during which both clubs and players will be subject to sporting sanctions as well as legal ones should either seek to terminate their contract. Sporting sanctions can include lengthy suspensions.
There are 2 protected periods in the FIFA Regulations:
2 years for players who sign contracts when aged 28 or over; and
3 years for younger players.
The protected period runs from the date of the contract. If the contract is renewed, the protected period starts again.
This means a player can unilaterally terminate his contract with his club after the protected period. There are 2 conditions: (1) the contract must be terminated within 15 days after the end of the domestic season (Grand Final day for A-League players); and (2) the player must pay compensation to the club. The amount of compensation is the residual value of the contract – i.e. what the player would have earned had his contract continued to its expiry date. The new club will be liable for the compensation if the player does not pay it.
For example, a player earning $2,000 a week would have to pay $30,000 compensation to his club if he terminated his contract with 15 weeks to run.
The key facts in Ante’s case are:
he was 31 when he signed a 2 ½ year contract in December 2006 to expire on 30 June 2009;
the 2 year protected period expired in December 2008; and
the PFA, on Ante’s behalf, served notice of unilateral termination on the Jets 14 days after the A-League Grand Final. The notice of termination acknowledged Ante’s obligation to pay compensation to the Jets by paying the equivalent of what his earnings would have been to June 30.
This process is made clear by Article 17 of the FIFA Regulations. The principles for the calculation of compensation were established by the Court of Arbitration of Sport in the famous 2008 decision involving former Hibs and Scottish international, Andy Webster (Click here for full article). Webster’s legal strategy was run by FIFPro, the world footballers’ union of which the PFA is a member.
Importantly, however, the amount of compensation will be different if a player and a club have agreed to a different transfer fee in their playing contract. Players therefore need to have regard to the protected period and the Webster case when negotiating special conditions into their contract designed to help them transfer overseas. It may be that the special condition makes it harder for the player to move after the protected period.
