Employment Contracts in Professional Sports in Germany
By Dr Fabian Masurat, Taylor Wessing, Hamburg, Germany
In Germany, employment relationships in professional sports – particularly those of football players – are generally subject to standard German labour law. However, employment contracts in the professional sports sector exhibit specific characteristics that stem from the nature of the activity and the unique conditions of the sporting environment.
1. Fixed-Term vs. Permanent Contracts
German labour law follows the principle that employment contracts are to be concluded for an indefinite term.
Fixed-term contracts are only permissible under certain conditions. According to Section 14 of the Part-Time and Fixed-Term Employment Act (TzBfG), fixed-term contracts without a material reason are permitted for a maximum duration of two years. Beyond this period, a valid objective reason is required.
In professional sports – especially professional football – fixed-term contracts are the norm. The continuous physical strain, age-related performance limitations, and the need for planning in the context of competitive seasons often justify fixed terms that exceed the two-year statutory limit. The German Courts generally recognise the “nature of the work” as a valid objective reason for such arrangements.
Nevertheless, not every fixed term contract is automatically lawful. The Courts assess on a case-by-case basis whether the specific nature of the activity justifies the limitation – especially in cases of repeated contract renewals.
2. Content of Sports Employment Contracts
As with any employment contract, professional football contracts include provisions on:
- Remuneration: This often comprises a base salary and performance-related bonuses (for example, for appearances, goals, promotion, avoiding relegation, championships), as well as payments for media or commercial activities.
- Working hours and rest periods: These are structured around training schedules, match days, and recovery phases.
- Vacation entitlement: Professional football players are also entitled to paid vacation.
- Secondary employment and sponsorship: Contracts frequently include clauses restricting advertising activities or private sporting engagements (for example, risky recreational activities).
- Illness and injury: Specific provisions apply to continued remuneration during injury, the club’s medical obligations, and reintegration procedures.
3. Transfers and Contract Changes
Transfers are a central element of professional football. In legal terms, a transfer involves the termination of the existing employment relationship with the releasing club and the conclusion of a new employment contract with the acquiring club. FIFA Regulations (especially the FIFA Regulations on the Status and Transfer of Players) and DFB (the German Football Association) Regulations (DFB Match Rules) govern transfer windows, formal requirements, and the parties’ obligations. The transfer fee negotiated between clubs is a separate civil transaction and does not form part of the employment contract.
4. Foreign Players: Residence and Work Permits
Non-EU players require a valid residence permit, including a work authorization, to be employed in Germany. The application process is carried out in cooperation with the future employer (the club). Clubs must demonstrate that the role involves a professionally qualified activity of particular public interest – a criterion usually met for professionals from recognised leagues.
5. Special Protection Provisions
a. Maternity Protection and Equality
General labour protections also apply in professional sports. Pregnant employees – including athletes – are protected against dismissal. Moreover, discrimination based on gender is prohibited.
b. Insurance Coverage
Employers must insure their employees through statutory accident insurance. For professional athletes, additional private insurance policies (for example, for sports-related disability or serious injuries) are often arranged.
6. Tax Considerations
Football players residing or habitually staying in Germany are subject to unlimited income tax liability. Foreign players engaged in Germany must also pay taxes on income earned in Germany. This includes base salary, bonuses, sponsorship income, and, in some cases, foreign income, provided that it is economically linked to their activity in Germany. Due to international engagements (for example, national team duties, advertising contracts), taxation can become complex.
7. Termination of the Employment Relationship
An employment relationship may end upon expiry of the fixed term, by notice of termination, or by mutual agreement. A club may only terminate a player's contract under strict conditions – such as gross misconduct or permanent incapacity to play. Players may also resign by observing the agreed notice period, although changing clubs outside the designated transfer windows is usually not feasible. In individual cases, wrongful termination claims can have significant legal and media repercussions, prompting football clubs to prefer amicable settlements.
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