Moving the Goalposts: Key Employment Law Updates for Football Clubs

Having received Royal Assent at the end of last year, reforms introduced by the Employment Rights Act 2025 are due to enter into force over the next few months. The reforms will have a significant impact on the rights of employees and the approach of employers, and football clubs should consider what they can do now to prepare.

UNFAIR DISMISSAL

One of the key areas of reform under the Employment Rights Act 2025 (the Act) is in relation to unfair dismissal. Employees will only need six months’ continuous service to receive unfair dismissal protection, and this change is due to come into force on 1 January 2027. This means that individuals employed from summer 2026 onwards are likely to be protected.

Furthermore, the statutory cap currently in place for compensation (the lower of 52 weeks’ gross pay or a statutory maximum (currently £118,223)) is to be removed. In the world of sport, and in particular football where salaries can be significant, this reform will have a considerable impact on potential liability and current practices.

Whilst to date it has often been the case that claims of this nature from players, managers, coaching staff and executives are dealt with by way of settlement or arbitration outside of the employment tribunal system, the removal of the compensation cap may make the employment tribunal an attractive forum for resolving these types of disputes.

In such a high-profile sphere, clubs will have to strategically consider the impact of fighting public employment tribunal proceedings on their reputations, particularly in light of their regulatory obligations following the introduction of the Football Governance Act 2025 (on which we previously wrote). Proceedings may provide an opportunity for clubs to justify employment decisions publicly, but individuals might also view this as an opportunity to exert pressure and achieve higher termination awards.

The changes in unfair dismissal compensation are likely to lead to an increase in settlement values when the legislation goes into effect. However, to combat this we anticipate a shift in the approach to exit provisions in contracts for managers, players and coaches to address both the value of possible exit compensation upfront and to include a contractual duty to mitigate their losses—over and above the standard common law obligation.

There is also likely to be an impact on the attitude towards academy players who are regularly signed onto year-long fixed-term contracts. It is often the case that at the end of this period clubs decide on the future of a player, and if they are not suitable the contract is not renewed without any further process.

Under the Act, these individuals would have unfair dismissal protection from the point at which they accrue six months’ service, meaning there must be a fair reason for dismissal and a fair process must be followed. Clubs and managers will therefore need to carefully consider how they document performance and approach contract renewal as the removal of the compensation cap may make claims from young players more attractive, particularly if they can claim for losses well into the future.

The same can be said of junior coaching staff or other club employees on fixed-term contracts, such as hospitality or seasonal match-day support. These could be generally more legally risky going forward, and clubs may need to reconsider their approach to, or even use of, the same.

Clubs will have to be mindful of the need to make earlier decisions about employees within the first six months of their employment. Any underperforming staff or players may need to be dismissed before they reach the revised unfair dismissal threshold. As aforementioned, this will drive clubs towards more formal performance processes, with documented concerns and in-person meetings. This approach is likely to increase bureaucracy and scrutiny on individuals as well as tensions between sporting realities (often giving rise to the need for a quick exit) and employment law requirements.

Any increase in claims from managers, coaching staff, players or former players could be significant when clubs come to be purchased or are refinanced. This is particularly pertinent given the innovative investment structures involved in football and the fact that some investors are new entrants to the market, meaning close attention will be paid to whether the value of clubs is adjusted accordingly or extensive warranties and indemnities are negotiated.

DUTY TO PREVENT THIRD-PARTY HARASSMENT

The Act provides further protection for employees, making employers liable for harassment of their employees by third parties in relation to any protected characteristic unless they have taken all reasonable steps to prevent it.

Theoretically, clubs may therefore be responsible not only for the actions of their employees but also any harassment of players by fans. This liability is clearly extensive, and clubs should consider putting in place measures to demonstrate that they have taken “reasonable steps” to prevent harassment ahead of this change entering into force in October 2026.

It is not currently clear what these steps might include, but they could extend to conducting targeted risk assessments and implementing training and enhanced policies, as well as fan-facing options like amendments to ticketing terms and conditions and greater enforcement or high penalties (such as lifetime bans). We are likely to see best practices developing as clubs consider their obligations further.

ZERO-HOURS CONTRACTS

Clubs relying on zero-hours or casual working arrangements, which we typically see for match-day or hospitality staff, will need to reassess these models in light of the Act.

The Act introduces a duty to offer guaranteed hours that reflect an individual’s actual working pattern, meaning staff who regularly have match-day or event-related duties may become entitled to a more secure contract. This reduces flexibility for clubs and increases the risk of inadvertently creating “regular hours” through repeated scheduling.

NONDISCLOSURE AGREEMENTS

The reforms in relation to nondisclosure agreements would void any clause in a settlement agreement that prevents a worker from making allegations of discrimination or harassment. Whilst there is currently no date for implementation of this reform, it could be significant where players and managers’ relationships with their club become strained.

This may mean that clubs are more willing to fight claims filed in relation to discrimination and harassment, taking them all the way to an employment tribunal. As with any increase in claims of this nature, this also gives rise to heightened reputational risk for clubs.

NEXT STEPS FOR FOOTBALL CLUBS

Ahead of the changes under the Act, employers in the football industry may wish to consider taking the following steps in preparation:

• Contract terms and approach: Clubs may want to review their use of certain types of contracts (e.g., fixed-term, zero-hours) and determine if these remain fit for purpose. For those contracts they wish to retain, clubs should check whether these contain appropriate provisions for termination, including possible mitigation provisions.
• Performance indicators: Clubs might consider whether they have in place key performance indicators for players, coaching staff and managers and whether players, coaches and managers are measured against these indicators to mitigate the risk of an individual claiming they have been unfairly dismissed for poor performance.
• Educating coaches and managers: Employers might consider whether coaches and managers are fully educated on the increased risks of terminating players and how they might proceed with a fair termination.
• Effective governance: It may also be appropriate for clubs to review their probationary period practices and dismissal procedures to make sure they are sufficiently robust and effective.
• Risk assessments: Clubs might consider undertaking risk assessments to understand the risk factors associated with potential harassment and determine how they can mitigate the risk of harassment of players and staff in the workplace.
• Zero-hours and casual working: Clubs should review how often casual staff are used, ensure rotas are genuinely ad hoc and prepare for requests to move toward more stable contracts where patterns have emerged.
• Monitoring further guidance and regulations: Much of the operational detail will be contained in secondary legislation and ACAS or government guidance. Clubs ought to ensure they are tracking developments closely throughout 2026.