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  • Legal governance of professional athletics in the Czech Republic

    22. 08. 2019

    In Western liberal democracies, there commonly are laws and regulations (in the broad sense) which cover the field of sports and the status of professional athletes. As professional sports developed extensively, a need arose to regulate the field by special legislation, let´s call it the Sports Act (*2) , which governs and to a certain extent cultivates the sporting environment through its rules, as well as offers, inter alia, some guarantees regarding the status to professional athletes (defines their legal status and their minimum rights). This is done either directly (through interventions - e.g. Hungary, Spain, France) or in collaboration with sports organizations (liberal approach - e.g. Denmark, Finland). Regardless of how it is done, the aim is, among other things, to define in legal terms the status of a professional athlete, thus creating a possibility of effective protection of the athlete´s interests where justified and necessary.

    The countries of Central and Eastern Europe followed suit with varying success. Slovakia, for instance, adopted its Sports Act in 2015 (*3). Obviously, the objective of this piece of legislation was to comprehensively cover sporting activities in legal terms. Regardless of the present factual (dis) functionality of the legislation in question, one has to appreciate the effort to define the status of professional athletes and to provide them with certainty as to the nature and content of the legal relationship with the sports organizations.

    The Czech Republic is a proverbial exception to the rule (not only) in this regard. The reasons behind the delay rest on the part of Czech lawmakers.

    The existing legislation, namely the Act. 115/2001 Coll., On Support to Sports, simply (and only) formalizes and to some extent institutionalizes the legal framework for the promotion and support to sporting activities and sports, from the construction and operation of sports facilities to the financing of sports clubs. Effective from 1 August 2019, a specialized central state administration body for support to sport, tourism and national representation in sports, the National Sports Agency (see below), was established whose task is to design and develop state policy plan for sports and coordinate its implementation, provide financial support to sports, organize and coordinate anti-doping programs, and promote sport in general (see Section 3d). However, the status of a professional athlete remains undefined in legal terms.

    1. Professional Sport During and After Socialism

    The underlying cause of the present (dismal) situation lies, alongside the delays on the part of the legislator, in the pre-1989 system of sports organization. The socialist ideology did not acknowledge the existence of professional sports and professional athletes. This did not mean, however, that professional sports, competitive/professional athletes, and governmental support for top-level athletics did not exist. On the contrary, athletic achievements and athletic competition with Western democratic countries played an irreplaceable role in socialist ideology. The state heavily supported sports and athletic training. There was a well-developed system of athletic preparation and education in sport centers available to children from a young age.

    In the context of the socialist ideology, competitive athletes were presented as amateurs, who dedicated themselves to sport alongside regular jobs. The forward of a major-league football club could thus also be employed as an electrician at a foundry. He only performed this job in theory, however, because he dedicated himself to training. The regime's goal was to capitalize on the moment when a socialist worker won over a capitalist professional.

    After the revolution in 1989 came a gradual erosion of the previous system, both in terms of training and education and in terms of the legal status of competitive athletes. Athletes no longer had to have a regular job. Sports became professionalized and there was a gradual development of structures and relationships in individual, and especially team, sports (mostly ice hockey and football.) Habitual ways and traditions, thanks to the regulatory mechanisms of sports unions, thus became firm rules.

    Legislators did not react much to these shifts. The only area that became the subject of legal regulation was the support of sports (last modified by law No. 115/2001 Sb., on the support of sports).

    The nearly 30-year absence of concrete legal regulation led to the self-regulation of professional (especially team) sports through measures established by sports associations, which function as clubs, and which (to varying degrees) adopted (and continue to adopt) rules of international organizations (FIFA, UEFA, IHF etc.). A number of small "ecosystems" formed, each representing a different sports association.

    The potential legal treatment of professional sports can thus pose a great challenge in the future, because it should reflect the fact that the social phenomenon which should be subjected to legal regulation, is not, given the variations between sports, associations and their rules, one entity but, rather, a series of relationships within each individual association. It is inconceivable that a public power, which took so long to take notice, could legitimately force Czech professional sports to create a universal set of rules and that these rules would be followed across the board, without taking into account the specificities of each association and sport.

    This is a difficult task. Continued apathy by public authorities, as proven by the application practice (see No. 2), will only lead to a deepening of the problem and worsening of conditions. Basic legal regulation of the rights of the professional athletes, especially in collective sports, is however necessary.

    2. Existing legal provisions covering the status of professional athletes and underlying problems

    The current Czech laws and regulations offer three possible statuses for athletes who engage in sports at a top professional level. In short, a professional athlete is an athlete for whom sport is the principal activity and area of interest and who does sports for pay, and that pay (usually) represents the highest income from his or her employment or self-employment.

    The least utilized and least suitable option for most sports, including team sports (among other also because of international trading with players, etc.) is the employment by a sports club. There are a number of reasons for that. *4

    Generally, it needs to be noted that labor legislation in the Czech Republic is predominantly of mandatory nature, i.e. rules on working hours and rest periods (workload, breaks for meals or rest, rest between two shifts, weekly rest) and occupational health and safety are clearly and strictly formulated by law (or by implementing legislation). Thus, the rules cannot be applied to professional sports as they stand while they can be changed only to a limited extent. The same problem would arise in connection with international, in particular team sports which involve trading, transfers or players on loan etc. where statutory rules on termination or modification of employment would apply.

    There is, however, one advantage of the employment option which is lacking in the other option below, that otherwise generally prevails, and that is the obligatory insurance policy to be carried by the employer for cases of work-related injury or occupational disease. *5

    The second option which is largely used, namely in team sports such as hockey or football, is the status of a self-employed person on the part of the athlete. The relation between the club and the player is governed by an agreement on sport activity which is entered into (as an innominate agreement) under civil-law rules, and the relationship between the two parties is regarded as one between two business entities.

    This option gives the parties relatively broad contractual freedom, including optional provisions on the assignment of the contract etc. The sports clubs then apply the assignment clauses when transferring players.

    However, there are a number of disadvantages.

    In most cases, athletes are in a weaker position when entering into an agreement with a sports club. Consequently, it is not uncommon to include provisions which would be unallowable under labor laws and regulations, namely contractual penalties against the athlete, or the disadvantageous remuneration system requiring the athlete to pay back part of the money already received at the end of the season in dependence on the club results. Arbitration clauses are included as a rule through which disputes which have a financial aspect are transferred from the courts to either permanent arbitration panels (a better scenario) or to individually appointed arbitrators (a worse scenario). Under the Czech law, an arbitrator can be anyone with integrity, legal capacity and citizenship of the Czech Republic. *6 No legal education is required.

    Moreover, no obligatory participation in accident insurance is mandated for professional athletes with the status of a self-employed person.

    The two above-named options differ significantly as regards public levies (taxes, and social and health insurance). In the employment scenario, the employer, i.e. the sports club, bears 2/3 of the cost of contributions to insurance schemes. In the case of a self-employed status, all costs of public levies are borne by the athlete.

    What follows from the above is that the scenario where the athlete acts as an independent entrepreneur is advantageous primarily for the sports club. Indeed, sports clubs also prefer it.

    The Supreme Administrative Court of the Czech Republic in rulings no. 2 Afs 16/2011 and in no. 2 Afs 22/2012 confirmed that both options can be applied to and chosen from by professional team sport athletes. In the rulings the Court commented on the legal status of a professional hockey player, and a professional football players (in both cases they were players of the highest competition, in the former the player was from AC Sparta Praha, in the latter from HC Sparta Praha).

    The findings of the Supreme Administrative Court in summary say that professional athletes (in team sports) and their legal relationships may be governed (depending on the circumstances) by either labor law or by commercial law (in which case professional athletes in team sports have a status of self-employed individuals/entrepreneurs). Although the Supreme Administrative Court argued that in several regards the relationship between a professional athlete and a sports club corresponds rather to the relationship between an employee and an employer, in other words that the sporting activity carries many features of a conceptual definition of dependent work within the meaning of Section 2 of the Labor Code (under Section 3 of the Labor Code, dependent work is to be performed exclusively in an employment relationship), it eventually ruled as above taking into account the fact that employment rules are not suitable for professional athletics and reflecting the hitherto widespread practice which regards the club and the athlete as two independent businesses or entrepreneurs.

    Finally, the third legal model governing the position of a professional athlete is the service relationship. It occurs mostly in individual sports and is different in its nature than the two models described above.

    In this case, the athlete is a professional serviceman and carries out the sporting activity as a member of the Dukla Army Sports Center (ASC) which falls under the Ministry of Defense of the Czech Republic. The Dukla Center provides very good training conditions to its members compared to other facilities in the Czech Republic. For this reason, ASC Dukla athletes include prominent Czech field and track athletes, skiers, rowers, water slalom competitors or canoeists and cyclists. Handball and volleyball players are also supported in a similar fashion through subsidized organizations.

    Among DUKLA’s (or its predecessors’) athletes have been Emil Zátopek, Jan Železný, Štěpánka Hilgertová, Kateřina Neumannová, Roman Šebrle, Barbora Špotáková, Eva Samková and Ester Ledecká.

    3. Final Notes

    On a positive note and thanks to pressures from athletes themselves and the activity of international associations, there have been attempts in some sports (such as football) to self-regulate in order to improve and regularize terms and conditions under which athletes train and perform. An example is the model standard professional contract published by the Football Association of the Czech Republic (FAČR). This is clearly not enough as many problems remain unsolved. To mention just one, one can recall the difficulties with transfers of athletes in youth categories, which are subject to disproportionate compensation in favor of the home club and that in many cases de facto makes the transfer impossible (if there is no additional support by parents or sponsors). This practice clearly stifles the development of young talents.

    There is still much to be done to further develop sports law in the Czech Republic. The longer we put it off, the harder it will be.

    Recently, the academic sphere has shown an active interest in the area of sports legislation and regulation. Sports law is taught at the Law Faculty of Charles University. Professional conferences and forums *7 are held on professional sport and its legislation. The outcomes of such efforts are relatively clear: it is necessary to define a special legal status of a professional athlete, since neither labor law nor civil law offer an appropriate solution.

    However, politicians have been very reluctant to respond to such initiatives. Sports fall under the auspices of the Ministry of Education, Youth and Sports, which is (relatively understandably) primarily a ministry with its main focus on education. For now, one can only speculate whether the situation will improve with the newly established National Sports Agency (with its advisory body, the National Sports Council). *8 Some skepticism cannot be avoided when it comes to possible legislative changes as the president of the Agency is not a member of the cabinet and as such does not have the authority to initiate new legislation. The Agency is supposed to be a relatively independent body, which undermines its ability to influence proposed and/or passed legislation at least indirectly unlike other governmental bodies and institutions which fall directly under and are governed by ministries whose representatives (ministers) as members of the cabinet have wider possibilities to promote their interests (i.e. interests of their departments).

    The author JUDr. Jakub Morávek, Ph.D. of this paper is a registrar and senior lecturer at the Department of Labour Law and Social Security Law of the Faculty of Law of Charles University. He is a vice-chairman of the Czech Association for Labour Law and Social Security Law and an attorney at law in Prague (www.akf.cz). The paper reflects the situation as at 1 August 2019.

    *2 It does not necessarily have to be a single piece of legislation (centralized regulation of sporting activities covering all aspects – overall organization of sports, development and financing of sport, sport organizations, the status of athletes and of professional athletes, etc.). Conversely, individual aspects can be regulated by individual pieces of legislation (decentralized legislation).

    *3 Act No. 440/2015 Coll., the Sports Act.

    *4 Only a few sports club of top competitions opted for this option, often only for a limited period of time.

    *5 For further details, see for example Morávek, J.: On Professional Sports, Employment and the Complete Collection, Labor Law 2012 - Dependent Work and its Forms, Acta Universitatis Brunensis, Iuridica, No 440, Masaryk University, Brno, 2012, Morávek, J., Štefko, M.: Professional Athletes in Team Sports. Journal for Jurisprudence and Legal Practice. 2013, No. 3, pp. 354-358 or Pichrt, J. (eds.): Sport and (not only) Labor Law. Wolters Kluwer. Prague. 2014., p. 288.

    *6 Arbitrations can be, in accordance with the provisions of Section 2 of Act No. 216/2994 Coll., the Arbitration Act, held with respect to all disputes which have a possessory aspect, that is, also in the context of labor and employment relations. However, arbitrations are held in labor disputes very rarely in the Czech Republic.

    *7 By way of examples let´s mention the conference "Sport and (not only) Labor Law" held at the Faculty of Law of Charles University in 2014, or the conference "Income Taxes of Team Sport Professional Athletes" held in 2017 at the same fakulty, as well as and as academic publications: Hamerník P.: Sport Law: Finding Balance between Specific Sport Legislation and Applicable Law, E-book, Institute of State and Law of the Czech Academy of Science, 2013, Pichrt, J. (eds.): Sport and (not only) Labor Law, Wolters Kluwer, Prague, p. 288, Jurka, H.: Legal Regulation of Professional Sport in the Czech Republic and Abroad,: Wolters Kluwer. Prague. 2018.

    *8 Pursuant to the transitional provisions to Act No. 178/2019 Coll., the National Sports Agency will be fully and independently operational as of 1 January 2021. For more details see the transitional provisions of Act No. 178/2019 Coll.

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