Employment

Transfers

What is the legal framework for individual transfers? What restrictions can be placed on individuals moving between clubs?

As a member of the European Union, Denmark is subject to EU rules on matters such as the free movement of labour and cross-border competition.

In its rules regulating the Danish Superliga and the first division, the Danish League has introduced the 'home-grown rule', which means that a club, in order to have the maximum number of players accepted on its player list for the tournament in question, is required to register at least eight ‘home-grown’ players, four of whom must have been trained at the club, and the other four of whom must have been trained at another Danish club. If a club fails to comply with these rules, the number of players on the club’s player list will be reduced by the number of missing home-grown players.

Ending contractual obligations

Can individuals buy their way out of their contractual obligations to professional sports clubs?

In contrast to the Danish labour market, which is characterised (and also distinguishes itself from other EU member states) by a high degree of flexibility with respect to termination of employment in terms of ease and low cost, sports contracts are often made non-terminable during the contract period.

Unless the parties, at the time of signing the contract, specifically agree to incorporate such a term into the contract, none of the parties will generally be able to buy their way out of the contract during the contract period.

When a contractual relationship exists between two parties, it will consequently be treated as actionable conduct if a party fails to comply with the agreed terms of the contract.

Welfare obligations

What are the key athlete welfare obligations for employers?

The Danish employment law system is governed by various statutes containing both mandatory and non-mandatory provisions that, together with general legal principles, set the framework for the formation, management and termination of an employment relationship, based on the freedom of contract existing between the parties, including collective agreements. These rules and provisions basically apply to sports contracts of employment in the same manner as they govern other employment relationships.

As an example of mandatory provisions, the Act on an Employer’s Obligation to Inform Employees of the Conditions Applicable to the Employment Relationship lays down minimum requirements for the amount of information an employer must give in writing to an employee at the time of the formation of the employment relationship, thereby ensuring that documentation is available to prove on a balance of probabilities what has been agreed between the parties.

However, in addition to the minimum requirements set out in the Act, the employer is obliged to inform the employee in writing of all important conditions that, in the world of sport, could include, inter alia, agreements on future transfers, rights and internal disciplinary sanctions.

Any non-compliance with the requirements of the Act imposes on the employer a duty to pay financial compensation to the employee.

In addition to the Danish Act on Employers’ Duty to Give to Employees a Written Statement of Particulars of Employment, the Holiday Act, among other legislation, contains a series of mandatory provisions that cannot validly be derogated from, not even by express agreement between the parties, to the detriment of the employee, unless otherwise specifically provided by the Act.

Young athletes

Are there restrictions on the employment and transfer of young athletes?

As a general rule in relation to the conclusion of contracts of employment, young people under 18 cannot validly enter into employment contracts under Danish law unless consent is obtained from a custodial parent. In addition, a number of special protective provisions apply to the employment of young people under 18.

What are the key child protection rules and safeguarding considerations?

Danish law sets out mandatory provisions requiring sports associations to collect criminal records on employees working with minors under the age of 15. Failure to comply may result in fines or criminal liability for the association.

Furthermore, the member federations themselves are safeguarding minors by sports-specific provisions. For instance, the Danish Football Association (DBU) is subject to the Regulations on the Status and Transfer of Players, including article 19, for the purpose of protecting young players from exploitation and other unfair terms.

Club and country representation

What employment relationship issues arise when athletes represent both club and country?

The main issue is often whether the club is obliged to release the player for participation in national or officially selected teams. This differs depending on the sport, but is mainly governed by the contract between the athlete and the club or by the Sport Federation’s statutes. For instance, section 7 of the DBU model player contract states that ‘the Club will release the Player for participation in any training gatherings, international matches, etc. for which the Player is selected by DBU and/or the local Union. If the player is not a Danish citizen, the rules issued by FIFA from time to time in respect of releasing players for international matches will apply.’

Selection and eligibility

How are selection and eligibility disputes dealt with by national bodies?

The dispute resolution bodies of the DIF's member federations, as mentioned in 'Jurisdiction', will deal with disputes regarding selection and eligibility. With regard to selection, these disputes are rarely referred to the resolution system as the coach, club or member federations have exclusive competence to form the team.

What are the key taxation issues for foreign athletes competing in your jurisdiction to be aware of?

General tax rules apply to athletes. It should be noted that Denmark has the second-highest income tax rate as a percentage of total tax revenue among OECD countries.

However, some foreign athletes may be entitled to be taxed on particularly favourable tax terms for a limited period according to the tax scheme for foreign research. The tax scheme was originally founded to attract scientists and key employees; however, it is possible to apply the scheme to, inter alia, athletes and coaches provided that they satisfy the qualifying conditions. For example, one requirement is that the employee, within the calendar year, must receive a monthly salary of at least 66,600 kroner (2019 level) after the deduction of the contribution to the Danish Labour Market Supplementary Pension Scheme.