Labor court on costly contractual error in professional soccer: Ineffective time limit enables change of club
On June 26, 2024, the Mannheim Labor Court ruled (case no. 5 Ca 73/24) that a fixed-term agreement in the employment contract must be in writing and unambiguous. If this is missing, the employment relationship is deemed to be permanent and can be terminated with notice. However, the court did not grant the player the right to receive a declaration of release. In professional soccer, employment relationships are not subject to any special regulations, but follow the general provisions of employment law.
In professional soccer, planning security is crucial for clubs. Clear contract terms with players are essential to ensure that key players are available during the season.
Facts
The parties are in dispute about the termination of the employment relationship and the submission of a declaration of release.
The plaintiff, a professional soccer player, concluded two contracts with the defendant, a soccer club. The professional player contract for the 3rd Bundesliga did not specify a fixed term, but contained an automatic extension option until 2026. The licensed player agreement for the 2nd Bundesliga provided for a fixed term until 2025. The plaintiff played exclusively in the 3rd Bundesliga.
The plaintiff gave ordinary notice of termination of his employment relationship with effect from June 30, 2024 in order to change clubs and applied for a declaration that the employment relationship had ended and for a declaration of release ("To declare that the plaintiff will leave the club as a professional player at the end of June 30, 2024 and that he will be released for the issue of a player's permit/license for a new soccer club.").
The defendant rejected the notice of termination and argued that a fixed-term employment relationship existed beyond June 30, 2024. An ordinary right of termination during the fixed term had not been agreed. Ultimately, the appeal to the lack of form was contrary to the principles of good faith. The plaintiff lacks the need for legal protection for the declaration of release, as the release by the previous employer is dispensable under the statutes of the association if a court judgment or a court settlement determines the termination of the employment relationship.
Solution
The plaintiff was successful with his motion for a declaration of termination of the employment relationship, while the motion for a declaration of release was inadmissible.
1.
The termination is not inadmissible pursuant to Art. 15 (4) TzBfG (German Law on Part-Time Work and Temporary Employment Contracts). A fixed-term employment relationship can only be terminated with notice if this has been agreed. In the absence of such an agreement, the contract can only be terminated for cause pursuant to Art. 626 BGB (German Civil Code).
In the present case, there is no fixed-term employment relationship. The professional player contract is the only basis of the employment relationship; such contract does not contain a legally effective fixed-term clause.
a)
Even if a fixed term of the professional player contract was verbally agreed until June 30, 2025, such agreement is invalid without compliance with the written form provided for in Art. 14 (4) TzBfG, which results in an unlimited employment relationship, Art. 16 sentence 1 TzBfG.
The defendant cannot invoke the licensed player contract, in which a contract end date of June 30, 2025 was agreed in writing, as such contract is not applicable.
b)
An interpretation of the professional player contract does not lead to a formally effective time limit. A formally declared intention to limit the employment relationship to June 30, 2025 cannot be inferred from the written professional player contract. The defendant refers to the fact that the extension clause of the professional player contract indicates a previous fixed-term agreement. However, this conclusion is not compelling. At best, the clause presupposes the agreement of a fixed term, which does not exist.
Even if this was an oversight, agreements that were inadvertently omitted or ancillary agreements that were made in an invalid form cannot become part of the declaration’s content by way of interpretation. The written form requirement of Art. 14 (4) TzBfG has a clarification, evidence and warning function. It is intended to avoid unnecessary disputes about the fixed-term agreement’s existence and content.
c)
The exercise of the right of termination by the plaintiff is not contrary to good faith. The assertion of the ineffectiveness of a fixed-term agreement does not violate good faith in accordance with Art. 242 BGB. The defendant cannot accuse the plaintiff of contradictory conduct because he made a different declaration within the scope of the licensed player contract and verbal agreements. The conclusion of the contract and the action are not contradictory. The fact that the plaintiff only complained about the formally invalid time limit one year after signing the contract does not preclude the assertion of invalidity. Art. 17 TzBfG stipulates that the invalidity of a fixed term must be asserted in court within three weeks from the end of the contract. If the deadline has not yet expired, the employer cannot rely on the fact that the employee will no longer assert the ineffectiveness of the fixed term.
2.
The application for a declaration of release lacks specific information in terms of civil procedure and the need for legal protection.
a)
An application aimed at providing a declaration of intent is specific within the meaning of Art. 253 (2) no. 2 ZPO (German Code of Civil Procedure) if it is phrased in such a way that the content of the declaration deemed to have been made in accordance with Art. 894 sentence 1 ZPO is clear. The content of the requested declaration must be reproduced in the application in such a way that the declaration is deemed to have been made when the judgment granting the application becomes final. If the application does not meet these requirements, a judgment in accordance with the application cannot trigger the legal effects of Art. 894 ZPO. The plaintiff’s application does not meet these requirements. It is not clear to whom the declaration is to be made and what specific content the requested declaration of release should have.
b)
To the extent the application relates to the declaration that the plaintiff will leave the company at the end of June 30, 2024, this question is already the subject of the application for a declaratory judgment. There is no additional legitimate interest in a further declaration.
Practical advice
Employers should always set out fixed-term agreements in writing, including a clear fixed term or a defined end date. If these legal requirements are neglected, the employment relationship may unintentionally be deemed to be indefinite and thus grant the employee an ordinary right of termination.
The written form requirement, a central pillar of employment law, remains critical – even after the introduction of the Fourth Bureaucracy Relief Act (BEG IV). Employers are well advised to regularly review and adapt their contractual practices in order to be on the safe side and ensure the long-term performance of their teams.
