The employment status of the sportsperson: The Belgian case

I. Introduction

For many athletes, sport will always be seen as their greatest passion, but in addition, for some, sport has also become an economic activity, an activity through which one can earn income. Sport can therefore also qualify as a form of employment. Consequently, it is necessary to think about when and to what extent labour law applies to athletes. When linking sport to labour, the first thing that comes to mind is professional athletes. However, the question is whether (certain) sportspeople who are qualified as amateur athletes by sports federations are also subject to labour law. After all, these so-called amateur athletes, i.e., even recreational athletes, may also earn income from their sport.

Both professional athletes and (so-called) amateur athletes may conclude contracts with their clubs or federations, which, among other things, also determine the (possible) compensation they obtain as a result of practising the sport. Contracts in amateur sport are often not perceived as employment contracts. In Belgian football, there are so-called ‘premium contracts’, through which an athlete in amateur football receives a certain amount of money per match point won, sometimes in combination with a fixed remuneration, which may or may not be construed as an expense reimbursement. The key question to be asked is whether these contracts should be seen as employment contracts and, consequently, whether these athletes are all employees within the meaning of the Employment Contracts Act of 3 July 1978. The debate on this is currently raging. Recently, it was decided in Belgian amateur football to exempt amateur football players from social security contributions up to a maximum amount of EUR4,500 per season. Moreover, there are also discussions at a professional level in Belgium. For instance, the courts have had to examine on several occasions whether the rules on dismissal of sports professionals, as regulated by the Belgian Act of 24 February 1978 concerning the employment contract for sports professionals (the Sports Professionals Act), is constitutional.

This contribution aims to highlight some discussion points on the problematic relationship between labour law and sports. On several occasions, the employment status of the athlete has been the subject of specific regulation and case law in the Belgian legal order. This contribution aims to discuss the Belgian approach and remaining questions as an example to feed a broader discussion. The focus of this contribution is on team sports, with football as a typical example, because in this context the exercise of authority, peculiar to the employer, is more obvious and discussions on the relationship with labour law are most acute.

II. The employment contract

The employment contract is defined as the agreement whereby an employee undertakes, in return for remuneration, to perform work under the authority of an employer. ¹ So there are four fundamental characteristics of an employment contract. Besides the fact that there must be a contract under private law, it must be verified whether sport can be seen as work at all. The initial motive to participate in sports is usually of a different nature than being able to earn a living (i.e., promoting physical health, building a social life, etc.). Nevertheless, financial gain can also become a (secondary) objective. Moreover, sport can also be competitive, which makes clubs want to financially honour an athlete's performance, thus making sport function as part of a business activity. Sport then potentially becomes a form of (paid) work that benefits the sports club. For that reason, sport can thus be income-generating. This brings us to the next fundamental characteristic, which is that remuneration (wages) must be paid by the employer, understood under labour law as compensation for work performed in execution of the employment contract. ² Thus, the remuneration granted must provide an economic benefit, an enrichment of the employee performing work. That means that the effective reimbursement of expenses does not constitute remuneration. It should be noted that there may be an employment contract even if the activity is performed as a leisure activity and is not (or not mainly) intended to earn an income. ³ Finally, a subordinate relationship must also be present. This element distinguishes a contract of employment from other contracts in which it is agreed to perform work in return for payment (e.g., a contract for services). Whether or not subordination exists should always be assessed in concreto. Authority means that an employer can give instructions and exercise control and supervision; it thus concerns a legal dependence of the employee on the employer. The employer's authority may be limited or even not exercised in concreto.

In examining these conditions, we should come to the conclusion that some athletes are plainly excluded from labour law, namely, (1) pure recreational athletes who derive no income from sport; (2) amateurs who receive a small payment that does not, or barely, cover(s) their expenses; and (3) self-employed athletes. In contrast, athletes who obtain remuneration within the meaning of the Employment Contracts Act and perform work under the authority of an employer will consequently be able to be subject to labour law.

III. Specific regulations for athletes

In the Belgian legal order, attempts have already been made to classify athletes into several categories, which have an impact on their employment status and, consequently, on their rights and obligations as athletes. Athletes who agree to the obligation to prepare for or participate in a sports competition or exhibition under the authority of a another person in return for remuneration exceeding EUR11,040 ⁴ annually are subject to the Act of 24 February 1978 concerning the employment contract for sports professionals (the Sports Professionals Act) and are consequently referred to as sports professionals (paid athletes). ⁵ Not only pure professional athletes, but also part-time athletes (semi-professionals) may be subject to this Act, if they meet the relevant salary limit. Athletes who fall outside the scope of this Act can be covered by the Flemish Decree of 24 July 1996 on the establishment of the legal status of non-professional athletes (Decree on Non-professional Athletes). ⁶ The non-professional athlete is defined in this decree as ‘the athlete who prepares for or participates in a sporting event and has not concluded an employment contract for that purpose under the Act of 24 February 1978 concerning the employment contract for sports professionals’. ⁷ Amateurs who thus obtain more than an expense reimbursement but who are not considered sports professionals, although they practice their sport in subordination to another person, are therefore subject to this decree and will also be able to be fully subject to the Employment Contracts Act. ⁸

IV. The Sports Professionals Act

V. The paid amateur football player

The follow-up question to be asked is how to look at the contractual relationship of the athlete who receives remuneration for his performance but does not fall within the scope of the Sports Professionals Act. As an example, we will look at so-called ‘amateur football’. This is a typical area of sport in which a lot of athletes receive fixed and/or variable remuneration (sometimes on the basis of some kind of chance contract or premium contract) and yet remain below the renumeration threshold of the Sports Professionals Act. The conditions under which one can speak of an employment contract have already been described above, and the question therefore arises as to whether these amateurs are all subject to employment contract law and its consequences. It should be noted that as a result of the Court of Cassation caselaw, it does not matter whether the activity is considered a leisure activity or not. If one earns an income (more than expense reimbursement), the existence of an employment contract is possible.

There are, of course, several consequences associated with the existence of an employment contract. For instance, there are the obligations under labour law, which are not minor. But, as is well known, there is also a cost associated with an employment contract, given the social contributions due to finance social security for employees. In practice, this often proves to be a stumbling block or obstacle for sports clubs in the amateur sector.

Therefore, the sense is that in practice there are many more employment contracts than one would like to admit at first sight in amateur football. In that context, a new financial framework was recently worked out for amateur football by the Royal Belgian Football Association (RBFA), Voetbal Vlaanderen and ACFF. In order to benefit from an exoneration of social security contributions, clubs will have to conclude a written contract with their players in which premiums of maximum EUR100 per point can be awarded, to a maximum of EUR4,500 (premiums and/or expenses) per season. Amateur clubs wishing to pay their players more must comply with regular social and fiscal regulations. Voetbal Vlaanderen seems to have created a dichotomy between amateur football players who are considered employees and other amateur football players (non-professional athletes). ²³ A model agreement was drawn up for the latter group, stating that the club and the player expressly acknowledge that this contract is not an employment contract and therefore there will be no “work”, “pay” or “relationship of subordination”.

The question is how this new arrangement relates to labour law. After all, labour law is mandatory in nature, meaning that, in principle, one is not free to choose whether or not it is applicable. ²⁴ The same applies to related social security law. Thus, in principle, the judge deciding on the facts will have to look at all elements to determine whether an employment contract exists between the parties. According to the most recent trend in the case law of the Court of Cassation, the court cannot substitute another designation for the qualification of contract by the parties, when, on the basis of the information submitted to its judgment, it is not possible to exclude the designation given to the contract by the parties. ²⁵ This case law is at the origin of the Employment Relations Act. ²⁶ Articles 331–335 of the Employment Relations Act enshrine this general principle, subject to some nuances. For instance, Article 331 of the Employment Relations Act states that the parties may freely choose the nature of their employment relationship without violating public order, morality and mandatory laws. Furthermore, the same Article states that the effective performance of the contract must correspond to the nature of the employment relationship and that priority should be given to the qualification evidenced by the effective performance if such performance excludes the legal qualification chosen by the parties. Article 332 of the Employment Relations Act also provides that the employment relationship must be re-qualified if the exercise of the employment relationship brings forward ‘sufficient’ elements to conclude an incompatibility with the qualification chosen by the parties. The court must therefore reflect on the elements that, individually or as a whole, lead to that incompatibility. ²⁷ The assessment of these elements must be made using the (general and specific) criteria set out in the Employment Relations Act. ²⁸ The general criteria allowing to assess the existence or absence of a relationship of authority are (1) the will of the parties as expressed in their agreement; (2) the freedom to organise working time; (3) the freedom to organise work; and (4) the possibility of exercising hierarchical control (Article 333, §1, Employment Relations Act).

It will therefore always have to be verified in concreto whether all the essential characteristics of an employment contract are present. It is insufficient to determine that there is no pay or a subordinate relationship. Firstly, under employment contract law, it does not matter what remuneration is called, or why it is obtained, to speak of ‘remuneration’ and thus an employment contract within the meaning of the Employment Contracts Act. Indeed, any amount granted to the employee is presumed to be the consideration for work performed, unless the contrary is proved. ²⁹ The only difference that can be seen between the two categories of amateur football players is the amount of the remuneration. However, if the remuneration is higher than an expense reimbursement, there is in principle remuneration in the labour law sense. Secondly, it is only necessary that there is the theoretical possibility of exercising authority to speak of a subordinate relationship. In club football, the authority relationship will often be difficult to deny. All amateur football players are expected to be present at well-defined training sessions and matches, they may or may not be selected by the coach to play matches and are given tactical instructions by a coach that they must follow. In addition, they must also behave according to the expectations of the club management and will often be subject to certain disciplinary rules and associated penalty systems in the event of non-compliance (such as wearing the right clothes, participating in a club event, etc.). So even the amateur football player who can benefit from the NSSO benefit regime will, in most cases, be subject to an authority relationship and linked by an employment contract with a club. The regime recently created thus raises questions. What is the legal basis for the creation of this regime? Who is authorised to make regulations on this subject? Is this distinction justifiable in the light of the constitutional principles of equality and non-discrimination? A relevant discussion that needs to be highlighted in this context is the discussion on legislation on ‘untaxed additional income’. ³⁰ After all, this legislation was nullified in 2020 by the Constitutional Court for being unconstitutional. ³¹ The Act sought to create a parafiscal advantageous system for association work, occasional services and platform work in the sharing economy, which would exclude the application of regular labour and social security law. However, the court noted, among other things, that an association worker can perform the same work as an employee employed by an association with an employment contract and yet be completely exempted from labour law. While the court understood that association work might merit a separate status given the special position of associations in society, it is not yet justified that labour law can be declared completely inapplicable. The fact that association work is presumed to be an ancillary activity, and that remuneration in this context is therefore also considered ancillary, is not sufficient to justify that exclusion. In addition, the Court also considered that the favourable parafiscal treatment of this ancillary income compared to regular employment income could not be objectively justified, and thus decided on a violation of the principle of equality. One may therefore wonder whether such reasoning would also be followed as regards the categorisation of so-called amateur football players.

VI. Conclusions

From the foregoing, we can conclude that for many athletes sport is no longer just a game, but also an activity associated with a number of legal issues. Discussions regarding the employment status of the athlete have not yet reached the finish line. Football players who earn more than an expense reimbursement by practising their sport will, in most cases, meet the conditions for being bound by an employment contract and can thus be called employees. When remuneration is so high that the threshold from the Sports Professionals Act is reached, then these football players will be considered sports professionals, thus their status is determined by a lex specialis to the Employment Contracts Act, namely, the Sports Professionals Act. The existence of this legislation has already been accepted by the Constitutional Court because of the special characteristics of professional sport. Nevertheless, there are still debates about the social protection these sports professionals enjoy compared to regular employees and non-professional athletes. The latter group includes so-called paid amateur football players. To date, their status is very unclear. The question is whether there is still a possibility to exclude these athletes from labour law. The above analysis does not give much room for that by any means.