Can a manager be dismissed for failing to achieve the results agreed in his employment contract?

The employment relationship of professional sportspersons can be complex. What happens if a clause is included in the employment contract specifying that it will be terminated if certain specific results aren’t achieved? According to the Murcia High Court, in its judgment dated October 20, 2014, it can lead to dismissal without the right to severance compensation.

The case we are referring to involved the manager of the Real Murcia football team. The employment relationship started on July 1, 2012, when the manager signed a professional sportspersons contract with Real Murcia, a team that competes in the Second Division of the Spanish football league. The fifth clause of the contract established termination, without the right to severance compensation, if the team did not achieve a particular number of points at certain stages of the League championship.

After some time, having failed to achieve the expected results – with the consequent breach of the objectives established in the contract – the Club notified the manager of the termination of his employment contract. The manager sued the Club for dismissal and the Labor Court ruled that the dismissal was unfair, ordering Real Murcia to pay 60 days’ severance compensation per year of service, ex article 15.1 of Royal Decree 1006/1985.

At odds with the decision, Real Murcia appealed. The appeal was upheld and the unfair dismissal decision was overturned on the grounds that the conflicting clause was lawful and not abusive, as the manager had claimed, arguing that the clause had been imposed and that it granted Real Murcia the right to unilaterally terminate the contract. The manager was consequently dismissed without the right to severance compensation.

Murcia High Court took the following aspects into account when examining the validity of the clause:

• The federation contract established that for the purposes of the termination of the contract, the provisions of clause five of the contract signed on July 3, 2012 prevailed.

• The employment relationship of professional sportspersons is special and provisions that have been validly included in the employment contract are deemed lawful grounds for termination under article 13.g) of Royal Decree 1006/1985.

• There was no abuse of the law in this case, given that the “results obtained are determined by several factors and the role played by the manager is one of the important contributing aspects in this regard”. Consequently, Real Murcia’s dismissal was not unfair and, as such, deemed valid.

In another similar case, the Navarre High Court handed down a judgment on July 24, 2009, which upheld the termination of the contract of the coach of the Portland San Antonio handball team for failing to achieve certain results(specifically, the team qualifying for the Champions League).

You can find other articles related to topical legal aspects in this industry in the newsletter prepared periodically by our sports and entertainment specialists.

Garrigues Sports & Entertainment Department