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Employment Law Issues for the Sports Sector

Sports sector employers in the UK face a number of challenges as the country prepares to formally depart the EU, while several domestic employment developments come into force in April 2020.

 

Brexit & end of EU free movement 

Almost every aspect of the law in the UK will be touched by Brexit and sports law is no exception. The true extent of the impact will not be known until the Brexit negotiations are concluded but sports lawyers will be paying especially close attention to the outcome of negotiations concerning the free movement of people.

The Brexit transition period runs until 31 December 2020, during which EEA nationals will still be able to come and work in the UK.

Free movement finish at the end of the transition period. This will be of major concern to a number of sporting leagues who wish to recruit the best European talent (without needing a work permit) to satisfy the appetite of fans, sponsors and broadcasters who have become accustomed (particularly after the 1995 Bosman ruling) to English sporting leagues being liberally sprinkled with talent.

Research released by the BBC in relation to England’s Premier League and Championship and the Scottish Premiership has shown that 322 players would not meet the current foreign player criteria if they were to be imposed on EU/EEA players. Some may argue that this will improve the fortunes of the national game but rights holders will be concerned about the knock-on effects to the commercialisation of sport in the UK through broadcast and sponsorship revenue.

Employers should ensure that all their EEA workers obtain settled or pre-settled status, to enable them to stay at the end of the transition period. The current position is that EEA nationals who are resident in the UK by 31 December 2020 have until 30 June 2021 to make an application.

Employers should also prepare for the new immigration system that will be in place after the transition period. The Migration Advisory Commission is expected to report in January 2020, having considered options for a new points-based system.

If they have not already done so, employers should carry out an audit of their workforce and consider where there may be staffing issues if they currently rely on EEA nationals. They should look for potential skills gaps and consider the impact of the new immigration system. Employers may need to obtain a sponsor licence to recruit the staff they need from abroad.

 

Off payroll working 

Reforms to the IR35 rules on off-payroll working are due to be extended to medium and large private-sector employers in April 2020. The new rules shift who is responsible for determining the status of a contractor for tax purposes and who is liable for deducting tax and national insurance.

On 7 January 2020, the Government announced that it would carry out a review of the implementation of the changes to IR35, but confirmed that the new rules are due to come into force on 6 April 2020. Private-sector employers who will fall within the scope of the new rules should therefore continue with their preparations and should not expect a delay to the implementation.

Increases in statutory payments 

The rates for the national minimum wage will increase on 1 April 2020. The national living wage rate, for workers aged 25 and over, will increase from £8.21 to £8.72.

The rates for younger workers will also increase, with hourly rates rising to £8.20 for workers aged at least 21 but under 25, to £6.45 for workers aged at least 18 but under 21 and to £4.55 for workers aged under 18 who are no longer of compulsory school age. The rate for apprentices will rise to £4.15.

The government has pledged that the national living wage rate will reach two-thirds of median earnings within five years. On current projections, this would be around £10.50 in 2024.

Employers should ensure that they also comply with changes to other statutory rates. The proposed rate for statutory maternity, adoption, paternity and shared parental pay is £151.20, up from £148.68. The increase normally takes effect on the first Sunday in April, which in 2020 is 5 April. The rate for statutory sick pay is expected to increase on 6 April 2020. The proposed new rate is £95.85, up from £94.25.

 

New statutory parental bereavement leave

The right to parental bereavement leave and pay is expected to come into force in April 2020. The right will allow parents of a child under the age of 18 who has died to take two weeks’ leave. It will be available to the birth parents or those with parental responsibility for the child and can be taken within 56 weeks of the child’s death, in a block of two weeks, or two blocks of one week.

Employees will be entitled to parental bereavement leave from day one of their employment, but there will be a qualifying period of 26 weeks for entitlement to parental bereavement pay.

The government has not yet published the regulations that will finalise the details for the introduction of parental bereavement leave and pay.

 

Executive pay 

Legislation requiring employers to report on the pay ratio between their CEO and their employees came into effect on 1 January 2019. The first reports, covering information for the 2019/2020 financial year, are due to be published in 2020.

Companies covered by the legislation (UK-listed businesses with more than 250 employees) must include a table in their directors’ remuneration report setting out the ratio between their CEO’s total remuneration and the pay and benefits of employees on the 25th percentile, the 50th percentile (median) and the 75th percentile. They must also publish supporting information specified in the legislation.

 

Holiday calculations revised 

The reference period for calculating holiday pay for workers who do not work regular hours will increase from 12 to 52 weeks on 6 April 2020. This change is being introduced as part of the government’s Good Work Plan and should prevent workers missing out on holiday pay if they take their annual leave in the 12 weeks after a quiet period.

Employers will need to pay workers without normal hours their average weekly pay, calculated over the previous year, rather than the previous 12 weeks.

 

Need assistance?

DavidsonMorris are established advisers to the sports sector. As employer solutions lawyers, we work with education providers and institutions to support with their full people requirements including employment & immigration legal advice and global mobilityhuman resource consultancy.

We understand the commercial and legal challenges facing employers in the sector, and work to support our clients in meeting their people management and planning needs while reducing legal risk exposure. Contact our sports sector specialists today.

Last updated: 2nd January 2020

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