Welcome to the Mills & Reeve Sports score shorts, our sports law podcast. I'm Richard Santy. I'm a partner in the employment and sports team at Mills & Reeve, and I'm joined today by Jameel Mann, who's a principal associate.
In this podcast, we'll address live industry issues and shine a light on the legal and regulatory reality behind the headlines. So, we cover a range of issues from commercial, corporate, regulatory, and contentious topics across a series of podcasts. Today we're going to break down the Employment Rights Act 2025 and how that affects disputes in football. So that can be from unfair dismissal disputes to opening the floodgates for employment Tribunals, claims to be a realistic option for, for managers and football players.
We're also going to lift the lid on managers' contracts, so we'll look at some key areas for negotiation and how the act could reshape strategy and bargaining power across the game.
Jameel, I know you've been advising a lot of clients on what the major changes around the Act are, haven't you?
The Employment Rights Act will be implemented in stages between now and next year. Some of the key changes have been well publicised, but I think it's just been quite useful to sort of recap by way of background. So, the first is to remove the requirement for employees to have two-year service prior to bringing a claim from unfair dismissal that will be changed to a new six-month qualifying period, and that'll be applicable to.
All dismissals from the 1 January 2027. The second is removal of the cap on the compensatory award, currently £118,000, and that, again, is going to apply to all dismissals from the 1 January 2027, so there won't be any cap on the compensatory award. The tribunal can award in respect to both of those provisions.
The government has confirmed it doesn't intend to consult on them, so we know they're coming in as they are. And finally, there's the extension to the Employment Tribunal time limit to six months to pursue a claim. To bring a claim. And that's expected by no earlier than October 2026. So, an average manager in the Premier League tends to have length of service of between 15 to 18 months, and managers in the divisions below the Premier League tend to be even lower.
Um, Richard, one of the things we've, we've been thinking about is how, how these changes are going to affect the football world. I don’t know if you've got any thoughts on those.
Yeah, I mean, I think the changes are going to have a fairly significant impact on the rights of many football managers and players.
And we'll talk about that in a bit more detail, I guess, over the next few minutes, but the actual impact upon everybody really still remains to be seen and certainly around the action that all parties may take.
Often, as you say, Jameel, managerial terminations arise when a manager's got less than two years’ service.
And under current law, the manager would be unable to bring a claim from unfair dismissal and less the dismissal is discriminatory or on the grounds of a protected reason, for example, whistle blowing. And we often see that thrown in. But even if they had two years' service, a standard unfair dismissal claim as, as you've said, is capped at £118,223. So usually, we will see an agreement reached in accordance with the termination provisions in the contract.
And specifically, you often see managers, for example, being paid out until the end of their contractual term. But from January 2026, if that manager were to have six months service, they'd also be free to pursue an unfair dismissal claim, and that's for potentially uncapped compensation. Likewise, if a player's contract isn't renewed on expiry and that player is released, then technically the decision not to renew the contract would amount to a dismissal. So that would entitle the player to bring an unfair dismissal claim previously, which wasn't, again, hugely valuable because of the cap, but now they can bring that claim in an uncapped setting.
Yeah, and you touched on it there, so in the football context where results can change weekly, it'll be interesting to see sort of the rationale that clubs give for terminating the employment of a player or a manager.
I think ordinarily it would either be based upon. Performance or sort of the catchall reason, which is some other substantial reason. Say for example, the fans are completely turning against the manager and the situation's become so untenable that it's no longer possible to carry on employing that manager, for example.
But I think it's something that clubs are going to have to give consideration to, and particularly given that, in most cases, there's unlikely to be any formal process that's undertaken in the background before somebody's dismissed as you referred to earlier. That dismissals happen with immediate effect normally and very quickly.
I think it's also going to be interesting to which jurisdictions individuals go for, because football disputes historically have tended to be resolved in arbitration. But the changes to this, to the Act, are likely to bring employment tribunals into considerations as forum for resolving disputes.
I mean, I don't know you, in your experience and from what you've been advising clients, do you think the changes sort of have a possibility of sort of breaking that status quo of them being resolved via arbitration and unemployment? Tribunals becoming a more popular forum.
I think it's really difficult to say at this stage.
I think often, particularly with players, once their contracts ended, they'll often sign with another club which mitigates their losses and whilst and there, there may be some ongoing loss if the new contracts on a lower salary. Often, it's accepted. That's the nature of the football. There's always as well the option of one month's additional pay under the current player contract, which is capped at double the compensatory award.
However, I can see situations where a manager or a player might be thinking that their existing contract is their big one that they might get in their career and they might then seek to pursue a claim for losses, particularly where they are dismissed partway through their contract and there's a contractual claim for the remainder of the contract in addition to compensation for unfair dismissal.
Yeah, you could see, I guess you could see a situation where a player is, as you say, coming towards the end of their career and even if they, it's not necessarily their last big move, they might actually, you know, if they were dismissed and they thought that the only possibility of future employment with the lower club in a lower league, and they were therefore going to be on a lower salary for effectively the remainder of their career.
Then, if they felt they'd been unfairly dismissed and they could make out an argument they'd been unfairly dismissed, then they potentially have ongoing losses for as long as they could. As long as they could potentially play, even if that were at a lower level and they moved down the leagues. And obviously these days, you know, when you, with all sport with a lot of sportsmen, you look at footballers, you look at tennis players.
Yeah. They're all, a lot of them are playing a lot longer because of developments in sports physiotherapy and technology around managing injuries. So yeah, you could see a player that was really keen to carry on. Moving down, having to go to a lower league and therefore saying, well, I've got ongoing losses.
I mean, what, thinking about it, what do you consider the pros and cons to be of the dispute resolution route against the employment tribunal process?
As you sort of alluded to there, Richard, you know, clubs, could be looking at, you know, unlimited compensation here for, an individual looking to effectively pursue losses for the remainder of what they say would be their career and there are clear advantages to using the PRDC route for players. You get quick access to decisions. they tend to take weeks rather than potentially years given the current employment tribunal backlog that we're seeing. They're chaired by personnel with football experience and, and most importantly as well, they're confidential, although there are some drawbacks, such as the losing party paying costs, but there are more limited remedies available with the PRDC route and are now a contractual focus.
However, I can see tactically why individuals might pursue claims in employment tribunals because there is the opportunity for much greater compensation, and in some cases, an individual might see benefit in offering the threat of dragging the employer through a public forum to put pressure on settlement when they feel they've got strong grounds to do so.
You can imagine tribunals being pretty packed with press and the like, or people wanting to watch these tribunals. If there's any left time left on the contract, individuals are still likely to pursue claims in the civil court for breach of contract as we're seeing already, but they could pursue statutory claims from unfair dismissal, if their contracts are at an end, and given the potential to recover enhanced future losses, as you mentioned.
I think the question is also whether employment tribunals fit for purpose. As I sort of mentioned, sort the public nature and I think it's going to be interesting how they deal with losses as well and their sort of different approach. And I know you've had some experience with this, Richard.
So yeah, we've had a case in the past where a claimant found a benefit in using the employment tribunal system because the employment tribunal applied normal employment principles to a football context.
So whereas a football panel might have, might have accepted that. Well, this is how we do it in football, this is what happens. An employment tribunal judge, came down quite hard on a witness, a football manager witness with regards to a player where actually the manager was asked if when the player returned from injury, did he do return to work interview, and where were the documents and why was that not in the bundle?
And the manager kind of looked blankly as much as to say what's a return to work interview? And that was because, as I say, the employment tribunal were dealing with it more in a normal employment context as opposed to thinking specifically about football. But I think, yeah, how employment tribunals will deal with losses is difficult to say because while we have, as I say, we've seen claims in the employment tribunal.
They're not used to dealing with football related claims. And so that sort of special relationship and special characteristics, you could imagine how that would differ from judge to judge if you, as I say, if you had a judge that actually kind of understood football and understood the context, could perhaps look at things very differently to a judge that had absolutely no idea about football and just applied normal employment principles.
But I think if a manager, for example, is unfairly dismissed, how the tribunal deals with losses will be interesting because clubs will be arguing that, say there are nuances in the football sector, so you expect a shorter lifespan of a football manager. And so yeah, that, and there will be a lot of considerations that will go into the decision to terminate a football manager and justifying that decision.
Yeah. They're often on fixed term, high value contracts. And so, I guess Jameel, it's something to think about as to whether the new legal framework will certainly strengthen their protection against early termination, or will clubs sort of simply try to adjust the contract drafting to effectively minimise exposure?
It's a good point. I mean, I think one area that I can see as being much more of a key battleground will be around terms such as mitigation clauses on termination. So, if a club does choose to terminate a manager's contract early, it's not uncommon for them to insist upon the ability to pay the remainder of the contract, in monthly instalments, and then place an express obligation on that manager to mitigate their losses by proactively seeking a new club as soon as possible, and the detail and the nature of the obligations, I think could become more focused and under the spotlight given the potential liabilities from the manager's perspective, you know, the timing of mitigation is. You know, what's reasonable?
You might argue that the longer a manager leaves it in applying or accepting a new job, the less likely they're going to be appointed in a comparable club even if this is realistic and an option. Whereas if you're in the manager's position, you'll be saying, well, what’s in it for me to wait for the right role? That's key. And that's of fundamental importance to my career, rather than sort of jumping straight into the next role that might not be suitable. So, I think there's some conflict around, you know, the way in which the considerations that both the manager and the club will be coming to the table and looking at those mitigation clauses.
And I'd add as well that the implications of all of this will apply equally to the manager's coaching team as well.
Yeah. And similarly, clubs might become more insistent on seeking to settle claims in relation to the termination of a fixed term contract right at the outset of the relationship and sort of pushing for those provisions in the contract.
So, whilst you can't contract out of statutory claims such as unfair dismissal simply by signing contract of employment, you can use other mechanisms to settle contractual claims. So, I think, for example, we'll see an increased use of settlement agreements on termination, particularly given that if there's no settlement agreement in place, a club might pay out on a contract on termination, but then still leave itself open to claims for unfair dismissal.
So, I guess just wrapping up, Jameel, finally, do you think that these new changes in the Act will shift the balance of power between, for example, managers and clubs?
I think the changes will certainly put managers in certain circumstances, players in a stronger position when negotiating termination.
I can certainly see a more robust approach by clubs when entering into contracts. But I think a lot of this is going to be driven by the impacts on individuals actually pursuing claims, or most importantly, how the clubs perceive this threat. And I think the balance of power is something that's probably going to vary over the longer term.
I agree. Well, we'll wrap it up there. Thanks for listening to our latest podcast.
You can find other episodes on Spotify, Apple Podcasts and YouTube. But thanks for listening. If you've got any questions, feedback, or topics you'd like us to cover in the future, please feel free to get in touch.