Industrial relations changing quickly in sports sector

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Sport is a growth industry in the Netherlands, and has attracted increasing attention from the government and trade unions. Furthermore, the Flexibility and Security Act, drastically changing Dutch law on employment contracts, which came into force in January 1999, sowed confusion among employers and employees in the sports sector. Recent developments include a collective agreement for professional footballers, which came into force on 1 July 1999.

Approximately 55,000 individuals are employed in the Dutch sport sector. Active athletes make up a small minority of the workforce (4,000), with the largest group of workers being sports association employees (15,000) and sports venue operators (17,500). The sector's gradual transformation into a true industry has attracted attention from trade unions. Five trade unions affiliated to the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging, FNV) have taken the initiative to join forces and form an umbrella interest group called FNV Sport, which offers professionals help in a supervisory and mediating capacity in workers' contract negotiations with sports organisations, sponsors and agents, as well as in financial and legal affairs. The organisation is also preparing for the realisation of collective agreements in sport. Given its experience, the professional football players' union (Vereniging Voor Contract Spelers, VVCS), which is associated with FNV Sport, is able to lend a helping hand to other sports groups. Combining the unions' efforts should also lead to a strengthened position in relation to the government.

Government-driven initiatives

A policy document titled Opportunities for professional sports (Kansen voor topsport) made public at the beginning of 1999 indicated that sport is an important item on the government's agenda. The policy document introduced a measure to guarantee a minimum income for professional athletes. Financial support is intended for those professional athletes who cannot cover their costs of living as a consequence of intensive training and who play at world-class or European level, the so-called "A-category". Professional athletes who earn substantially more than the minimum wage are not covered by the measure. Currently, about half of the 300 A-category athletes are eligible for benefits provided for by this arrangement. The other half are not eligible as a result of earning too much additional income from sponsorship fees. Any additional income over NLG 1,800 is directly deducted from the athlete's income. The government will spend an extra NLG 30 million until 2002 on professional sport in order to finance the measure. By 2002, the cabinet will spend more than NLG 110 million on sport.

Athletes seek a more liberal arrangement for additional income in the future, and a means to build up a pension fund based on depositing sponsor fees. The "contract players fund" (Contractspelers Fonds, CFK) already affords professional football players this option. In total, NLG 600 million has been saved in the since 1972. The fund provides a scheme for players who become disabled and lifetime benefits for a player's family in the event of death. A mandatory savings scheme forms a crucial basis of support for the fund. After some professionals no longer wished to contribute to the scheme, the Dutch football union, KNVB, ruled that no exemptions from CFK participation would be allowed. According to FBO, the football employers' umbrella organisation, exemption would have drastically weakened the clubs' position.

Flexibility and Security Act has tangible effects

Like the temporary employment agency sector (NL9902125N), the football world has been violently shaken by the introduction of the Flexibility and Security Act with effect from 1 January 1999 (NL9901117F). Football is a sport accustomed to working with consecutive fixed-term contracts - more than 25% of the approximately 1,000 football players in the VVCS union have a flexible employment arrangement. The most significant consequence of the new legislation is that a club can no longer make use of a consecutive series of extended contracts. Once the total duration of a contract exceeds three years, under the new rules it becomes an employment contract for an indefinite period and can be dissolved following a one-month notice period. Since abolition of the transfer system as it existed before the European Court of Justice's ruling in the Bosman case, clubs are no longer permitted to demand compensation for a player whose contract has expired. This may put an end to the practice whereby sizeable sums were paid for players who ended their contracts prematurely. For clubs, the new Act fuels anxiety by significantly limiting their opportunities to enter a series of consecutive contracts with a player. VVCS is concerned about the potential mass exodus of talent to clubs abroad, and fear prevails that investment in youth training will diminish now that young players have the option to leave one month after sitting out a single long-term contract.

Is a collective agreement the answer?

To circumvent the negative consequences of the new Act, employers and employers' associations can use a collective agreement as a means of gaining an exemption from the system of extension and conversion of the fixed-term employment contract. Although both FBO and VVCS want to make use of this option, negotiations have not resulted in an agreement between the two bodies. However, an agreement has been reached between FBO and a new negotiating party, the Unie ProProf, a players' union founded by football agents. Although the VVCS chair believes that the agreement does not contain sufficient social provisions and that football agents should not start a trade union, and given the Unie's shaky basis, the much larger VVCS went ahead and agreed to the agreement, albeit with some reluctance. The deal contains an agreement to preserve the CFK pension fund and includes insurance, of which 50% is paid by players, to compensate for the gap between full disability benefit and that covered by the Disability Insurance Act (WAO). Effective from 1 July 1999, the professional football agreement is valid for three years and will carry over for an additional year if no new agreement is reached. If clubs wish to end a relationship with a player, they must announce their intentions three months before the contract expires. In the case of resignation, players in the premier division receive a maximum of NLG 250,000 and players in the first division receive NLG 80,000.

Commentary

All evidence points to sport, and especially football, developing into a major industry. Increasing professionalism brings about a need for sound industrial relations and the sector has specific characteristics that require parties to establish an agreement to give the new flexibility and security legislation more detailed form. Now that an agreement has been reached for the football sector, similar developments will probably take place, with other sports such as cycling, volleyball and basketball becoming more professional. A collective agreement at the level of the entire sports industry is preferred to disparate company agreements - each club independently reaching an agreement would hamper negotiations. The real question is whether a collective agreement that places limitations on the employee's labour mobility squares with Article 39 of the EC Treaty (fomerly Article 48), which grants employees the right to freedom of movement. (Martijn Helmstrijd, HSI)

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