Manager Minefield; the factors involved in Hiring and Firing

The news out of Stamford Bridge is that Chelsea FC are looking to hire their first in-house lawyer. robbie_savageThe club has not yet revealed what the job specification for the role is but one would hazard a guess that Employment law could be high on the list.

Since 1 July 2003, a reign of just over 10 years, has seen Chelsea owner Roman Abramovich pay out in the region of £90million in compensation to 7 sacked managers. To put this into context, Chelsea FC had just 8 managers in their first 75 years of existence. Two of the managers that must feel most hard done by are Guus Hiddink who had 3 months in charge between February 2009 to May 2009, losing only one game in charge, won the FA Cup and narrowly missed out on the Champions League Final. Roberto Di Matteo was deemed surplus to requirements just six months after delivering Abramovich’s most sought after prize, the Champions League Trophy.

Chelsea’s decision to have a legal advisor on hand may come in the wake of the enactment of the Enterprise and Regulatory Reform Bill. The new “Protected Conversation” rule should open the door for clubs to invite managers to sit down and speak face to face averting the previous fears of such talks being admissible in court in an unfair dismissal claim. The new ruling should encourage clearer lines of communication throughout a managerial tenancy and when the writing is on the wall for club and manager, settlement discussions on a without prejudice basis, should take place to the benefit of both parties.

Currently there are three options for a departing manager; the employment tribunal, traditional court proceedings and the Premier League Manager’ Arbitration Tribunal (“MAT”). The employment tribunal is not fit for purpose as the maximum payable to an employee in an employment tribunal will be the lesser of £74,200, or a year’s salary. These caps do not really marry up with the ‘Special One’s’ £250k weekly wage. With court proceedings there is no cap on compensation but costs can quickly escalate and eclipse those of the employment tribunal. In addition neither party wishes to bear the opposing side’s legal costs if the court’s ruling finds against them. The final option available to a manager is the MAT, used successfully by both Alan Curbishley and Kevin Keegan in relation to their constructive dismissals in 2008 and 2009, respectively. The MAT is favoured by managers as the panel is made up of barristers who are experts in the football industry specialising in sports employment issues.

A factor that may discourage owners such as Roman Abramovich from being so gung-ho in sacking and replacing their current manager are the new fair play rules which state that teams have to “balance or even break even” their accounts or they will face serious sanctions. The hiring and firing of Andre Villas Boas probably highlights how costly the process can be. AVB cost Abramovich a cool £13.3million to lure him from Porto but just 9 months later the Russian had to pay out £12million in compensation to the Portuguese manager.

Clubs and managers should ensure that the contract in place for the manager reflects the specific nature of the football industry and a standard employment contract will not suffice. The reality of a well drafted manager contract will only become apparent when the termination provisions are brought into play.

Robbie Savage – Sports Consultant