What was the Bosman Ruling?

The ‘Bosman’ in question is Jean-Marc Bosman. The Belgian midfielder started his career at Standard Liège, one of Belgium’s most successful clubs. He also earned multiple youth caps for the Belgian national team. His career stalled, however, and in 1988 he moved to Royal Football Club de Liège (“RFC/ RFC Leige”), Standard Leige’s rivals. At the time, RFC was at the top position of Belgian football. Bosman quickly fell out of form there, and his initial contract was not renewed following just three competitive appearances for the club. When his contract expired in 1990, he was offered only 25% of the value of his former contract. Unsurprisingly, Mr. Bosman exercised his rights under the rules of the Belgian Football Association to reject the new contract. The rules of Royal Belgian Football Association and Union of European Football Associations established that his status has been changed – he became available for other clubs to sign, albeit with a ‘compulsory transfer fee’ attached to this transaction. This was calculated based on many factors including the age of the player, international stature and the appropriate compensation for the training of the player to date incurred by the old club. Further, RFC Leige then set up the transfer fee of 12 million Belgian francs for Bosman.

Bosman didn’t attract offers from any club, so he arranged to provide his services to the French second-tier side US Dunkerque. They offered him a contract and agreed to pay the transfer fee to RFC Liège. Both arrangements between US Dunkerque, Bosman and RFC Liège were subject to the condition that Bosman’s certificate of registration is sent from URBSFA to FFF (French football authorities) by the start of the next season. However, the certificate of transfer was not submitted to the French football authorities (FFF) by RFC Liège as they had doubts over US Dunkerque’s solvency. RFC Leige suspended Bosman and prevented him from playing for the rest of the season. The suspension could have been extended up to two years. Though, Bosman remained affiliated with Liège but found himself in an indeterminate state with his wages cut short by 75%. Various short-term moves followed, but these were hindered by his ongoing uncertain relationship with Liège. Between August 1990 and December 1995, Bosman took his case from court to court in Belgium. Despite being declared a ‘free agent’ by the Belgian courts, a lot of circumstantial evidence mounted up to indicate the fact that Bosman had been effectively ‘blackballed’ from entering into any new arrangements with any other clubs by RFC Liège. 

The Belgium Court of Appeal held that the claim put forth by the player was admissible, but that since it required an assessment of the legality of the transfer rules in light of EU laws, it must be referred to the European Court of Justice. Finally, the Belgian Court of Appeal referred the case to the European Court of Justice (ECJ) and asked for clarification of the question that whether Article 48 of the EEC (European Economic Community) Treaty/ Treaty of Rome could be applied in this situation.

Bosman claimed that the present transfer rules in football violated his ability to look for a job in another country because the limitation to three players from another nation can be regarded as a clear violation of Article 48 which deals with the free movement of workers. Art. 48(3) further states that everybody has the right to actively look for a job in another member State of the EU. In order to fall under this category, the player has to prove that his career as a football player is a professional one and that he earns his money through sport, i.e., by playing that sport.

Employing the aforementioned provisions, the Court decided that levying a transfer fee upon out-of-contract players and having a nationality-based cap on the number of players in a football team violated the principle of free movement of labour (a right promised to people belonging to the European Union). The Janssen Van Raay Report went to the extent of claiming the then state of the football transfer system to be similar to the “latter-day version of the slave trade, a violation of the freedom of contract and the freedom of movement guaranteed by the Treaties”. Bosman won and the ruling can be attributed to the development and establishment of the transfer system as we see it today. Foreign quotas within UEFA competitions were removed. 

By reinforcing the principles of freedom of contract and free movement of labour, the concept of free transfers arose. Where earlier, the player could be kept back against his wishes even if the employment contract period had expired, now the players were free of the duties and responsibilities they owed to the football club. Consequently, players were free to seek employment elsewhere once their existing contracts expired.

Issue

As discussed in our blog, BCCI’s standing on Indian players in a foreign league is that it will not allow any Indian player, contracted or retired and playing in IPL, to be a part of the upcoming foreign leagues and added that no Indian player will be allowed to take up any employment roles with any teams. This can be construed as a restraint on Indian players’ right under Article 19(1)g of the Indian Constitution to “to practice any profession, or to carry on any occupation, trade or business”. As mentioned above, such restriction can only be in the interest of the general public, in case of state monopoly and/ or as per requirements of the profession. In this case, only the restriction based on the interest of the general public seems reasonable to be applicable here.

However, in the case of BCCI’s “restrictive policy,” one cannot determine the reasoning behind such policy except for protecting the Indian player’s fitness and keeping them fresh for their commitments at the international level.

Are there any rights for the protection of employment in India?

The aspect of the Bosman ruling that we shall be focusing on will be the free movement of labour i.e., the legitimate aim of free movement of labour that is justifiable from the perspective of public interest. This means that the nationals of European Union member states (Member) have in particular the right, which they derive directly from the Treaty, to leave their country of origin to enter the territory of another Member and reside in order there to pursue an economic activity.

This right is similar to a certain extent to the right granted under Article 19(1) of the Constitution of India which guarantees Indian citizens certain rights and freedoms, including the rights “to practice any profession, or to carry on any occupation, trade or business”. However, these rights are subject to “reasonable restrictions”, as imposed by law, “in the interests of the general public”.

The reasonable restriction under Article 19(6) provides that the fundamental right under Article 19(1)(g) can be restricted in the following ways:

1. By imposing reasonable restrictions in the interest of the general public.

2. By state monopoly: Sub-clause (ii) of Article 19(6) enables the state to make laws for creating state monopolies either partially or completely in respect of any trade or business or industry or service. The right of a citizen to carry on trade is subordinated to the right of the state to create a monopoly in its favour. 

3.      Sub-clause (i) of Article 19(6) empowers the state to lay down, by law, “the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business”. 

In addition, any agreement which restrains a person from exercising a lawful profession, trade or business of any kind is, to that extent, void under Indian Contract Act 1872 (ICA). Indian courts have consistently held that while restrictive covenants operating during the term of the employment contract are valid, any clauses restricting an employee’s activities post-employment would be in restraint of trade. There have been, however, cases which recognized an exception to the rule covering restrictions aimed at protecting the employer’s legitimate business interests, such as its business connections and trade secrets. Therefore, clauses relating to post-employment non-solicitation of employees or customers and protection of confidentiality concerning trade secrets are not caught by the ICA and have been enforced by the courts, albeit on a case-by-case basis, with an application of a restrictive covenant. 

Restrictive covenants are strictly scrutinized and only enforced when they are “reasonable ‘given the totality of the circumstances, including the scope of geographical, temporal, and competitive activity restrictions.” 

Moreover, for imposing any restriction there needs to be reasoning behind such restriction. Further, under the purview of the Competition Act, Section 3 deals with anti-competitive agreements prohibited among enterprises engaged in identical or similar trade of goods or provision of services. The Delhi High Court has also observed that it is this attempt to protect themselves from the competition that clashes with the right of the employees to seek employment where so ever they choose and in a clash like this, it is clear that the right of livelihood of the latter must prevail. 

Before the Bosman ruling, a football player could not leave their club even if their contract had ended. They had to seek agreement from their club to leave for free or had to wait for the club to receive a transfer fee for the player. If a deal couldn’t be struck to release the player, then they could be held indefinitely by the club, unable to play football or earn a living. In essence, the club “owned” their players.

Now coming to the BCCI’s situation, it is somewhat similar given the fact that the Indian players irrespective of being capped player, uncapped player, on the central contract list or otherwise are prohibited from participating in foreign cricket leagues after the end of the term (as detailed below) of their IPL contract. All restrictions imposed on players under the Indian Premier League Player Contract (“IPL Contract”)are under Clause 8, which deals with the restrictions imposed on players during the term of the Agreement. 

Schedule 3 of the IPL Contract defines a Season as a period “which occurs during the Term: (i) the period from the 7th day before the first match of the League (whether involving the Team or otherwise) until the end of the 1st day following the last Match of the League Season involving the Team unless either BCCI or the Franchisee has requested the Player to remain for any closing ceremony or other such event which takes place on or before the day after the Final irrespective of whether the Team participates in such Final”

Article 2.2. of the IPL Contract defines the Term. Since we are referencing the 2021 IPL Contract, we can assume an equal amount of term, which will extend up to 4 months after the IPL final, which in the case of the 2022 season would be the end of September 2022.

The European Court of Justice in the Bosman Ruling said that the transfer system was against the spirit of the law and the rights of the players since it restricts the player’s freedom of movement by preventing them to play in other nations. Lifting the restrictions, the court was of the view that the rule violates article 48 of the Treaty of Rome mentioning it was discriminatory and preventing talented individuals to play for other nations.  Now in the Indian Scenario, as mentioned above article 48 of the Treaty of Rome, is equivalent to Article 19(1)(g) provides for the fundamental right of the citizens to practice any profession or to carry on any occupation, trade or business.

Is there any judicial precedent in India similar to the Bosman ruling?

Indian Cricket Players Association v. Board of Control for Cricket in India (BCCI) Case no. 12 of 2012, Competition Commission of India

Although the facts do not entirely align with the Bosman ruling, the principle of protection of employment rights in sports is common in both these cases.

In this case, the Indian Cricket Players Association (ICPA) challenged the rules set by the BCCI, which required cricket players to obtain a “No Objection Certificate” (NOC) from their current team before they could negotiate with another team. The ICPA argued that this rule was a restraint of trade and violated Indian competition law. The Competition Commission of India (CCI) ruled in favour of the ICPA, finding that the NOC requirement violated Indian competition law. As a result of this ruling, the BCCI was required to amend its rules to allow cricket players to negotiate with other teams without obtaining a NOC.

Conclusion

In India, there is no regulation regarding the Bosman ruling as a rule regarding freedom of contract. If the Bosman ruling can be adapted to the Indian sports system, this regulation can protect the player from arbitrarily of sports organizations and authorities. The undeniable fact is that Bosman has been a game changer even if from a strictly legal point of view, the judgment may not have been remarkable. Admittedly, it does not provide an immediate answer to all sporting problems. However, Bosman has set in and furthered the motion of an entire series of judicial proceedings, legislative and policy developments that can be considerably said to be moved far beyond the transfer its initial purpose, jurisdiction and sport.