Termination of the sports employment contract on the employer’s initiative, invoking just cause, or on the player’s own initiative on the same grounds, is subject to a specific regime, laid down in Law No. 54/2017 of 14 July, with legal consequences of its own, which differ in relevant respects from the general regime of the Labour Code. This article forms part of the Sports Law area of Araújo & Associados.
What constitutes just cause
Under Article 23(3) of Law No. 54/2017, just cause, both for the purposes of dismissal by the employer and of termination of the contract by the sports practitioner, is constituted by serious and culpable breach of contract that makes the continuation of the sports employment relationship practically impossible. This is a general clause, the application of which to specific situations depends on a case-by-case analysis, and not a closed list of conduct exhaustively set out in the law.
Consequences of dismissal – the end of the right to reinstatement
One of the most significant changes introduced by Law No. 54/2017, compared with the previous regime of Law No. 28/98, was the elimination of the sports practitioner’s right to reinstatement in the event of unlawful dismissal – that is, a dismissal carried out by the employer without valid just cause. Under the previous regime, a player unlawfully dismissed could be entitled to be reinstated at the club; at present, the law establishes only a duty to pay compensation on the part giving rise to the termination, and the player is not recognised as having any right to return to the team.
Calculation of compensation
Under Article 24 of Law No. 54/2017, the party giving rise to the termination of the contract, or who has improperly brought it about, must compensate the counterparty, as a rule, by the amount of the remuneration that would have been due to the sports practitioner had the contract ended at its normal term. The law allows, however, for compensation of a higher amount than this criterion to be set, whenever the injured party proves that it has suffered damage of a higher amount.
The injured club’s “dual protection” – joint liability of the new club
A distinctive feature of the Portuguese regime, provided for in Article 26 of Law No. 54/2017, is the presumption that a player’s new sports employer took part, directly or indirectly, in the termination of the player’s previous contract. Unless that presumption is rebutted, the new club is jointly and severally liable, alongside the player, for payment of the compensation owed to the injured club – a solution that legal scholars have described as “dual protection” in favour of the employer harmed by the termination, departing from the general principle that contracts take effect only between the parties that conclude them. The law also provides for rights of recourse between the new club and the player, for situations in which the former has been called upon to pay the compensation.
Dismissal for just cause and other related matters
The regime for termination of the sports employment contract is closely linked to the other forms of termination provided for in the law, including termination by notice on the practitioner’s initiative by means of a release clause, described in the article Sports contracts in Portugal – what you need to know. Where the compensation owed is not paid voluntarily, it may be necessary to resort to collection proceedings, dealt with in the article Debt collection in sport – recovery routes.
About Araújo & Associados
Established in 1980, with offices in Porto and Lisbon, Araújo & Associados provides legal advice to clubs and players in proceedings for termination of the sports employment contract, in Portuguese, English, French, German and Spanish.
Frequently asked questions about dismissal for just cause in sport
Can a player dismissed without just cause demand reinstatement by the club?
No. Unlike the previous regime, Law No. 54/2017 eliminated the sports practitioner’s right to reinstatement, establishing only a duty on the club to pay compensation.
How is the compensation owed in the event of dismissal without just cause calculated?
As a rule, by the amount of the remuneration that would have been due to the player until the normal end of the contract, and a higher amount may be set if the injured party shows that it suffered damage of a higher amount.
If a player terminates the contract and signs for another club, may that new club have to pay the compensation owed to the previous club?
Yes, under certain conditions. The law presumes that the new club took part in the termination of the player’s previous contract and, unless that presumption is rebutted, it is jointly and severally liable for payment of the compensation owed.
Does Portuguese law define a closed list of what counts as just cause?
No. The law establishes a general clause – serious and culpable breach of contract that makes the continuation of the sports employment relationship practically impossible -, the application of which depends on a case-by-case analysis of each specific situation.
Does a player who is a minor have the same just cause regime as an adult professional player?
The general regime of Law No. 54/2017 applies to sports employment contracts, with the particularities applicable to contracts entered into by minors, in particular as regards the maximum duration of the contract.
Contact us
For more information on dismissal for just cause in sport, or to book a legal consultation, you can contact us through our Porto or Lisbon offices, by telephone, email or via the form on the website. We provide legal advice in Portuguese, English, French, German and Spanish.