The Legal Boundaries of Wage Suspension in Sports Employment

In October 2024, the Manchester Employment Tribunal propounded a landmark ruling in one of the most important sports law cases of the year. Benjamin Mendy's action against Manchester City Football Club for unlawful deduction of wages amounting to around £11 million has caused shockwaves in the sporting community. Judge Dunlop stated that never before had so much “legal expertise and endeavour” been devoted to a single claimant’s wage claim of this scale. The case, which revolved around whether City had a legal right to hold back Mendy's wages after criminal charges (for which he was subsequently cleared), sets an important precedents for player contracts, suspension on wages, and under what circumstances clubs are entitled to lawfully deduct wages from their players. The implications are far wider than those of sport and Europe.

Brief Facts of the Case

Benjamin Mendy, a French international footballer, signed for Manchester City from AS Monaco FC in 2017 for £52 million. His three-year fixed-term contract entitled him to a “basic wage” of £6 million per year, along with various bonuses related to match appearances, competition wins, and payments for image rights. Mendy made 50 appearances for City before being suspended without pay in September 2021, following his arrest after being charged for multiple offenses in August 2021, including an allegation of rape. The Football Association (FA) also suspended him in connection with these allegations. City justified the suspension of his salary on the basis that he was "not presently ready and able to perform duties"  Mendy was ultimately found not guilty of all charges at trials which took place in January and July 2023. By this point, his contract with Manchester City had already expired in June 2023.

Legal Basis and the Tribunals Approach

The key legal issue revolved around Section 13 of the Employment Rights Act, 1996, which makes deductions from wages unlawful unless sanctioned by statute, agreement, or worker permission. The Tribunal used a rigorous three-stage examination process to resolve whether Manchester City's deduction of Mendy's wages was lawful.

Firstly, the Tribunal examined whether City had an express contractual right to suspend paying Mendy's wages and found that there was no such provision.

Secondly, the Tribunal looked at City's contention that an implied term allowed the wage suspension and dismissed this contention, observing that Mendy's contract was the product of “an unusual degree of equality in bargaining power” and “deals expressly and comprehensively with the duties and obligations of both sides”.

Since there was no contractual basis for withholding salary, the Tribunal turned to whether Mendy was “ready, willing and able to work” at four specific times. These were divided into two categories: Non-Custody Periods (January 8 to December 29, 2022, and January 18 to June 30, 2023), when Mendy was under the FA's suspension but not in custody, and Custody Periods (September 1, 2021, to January 7, 2022, and December 30, 2022, to January 17, 2023), when Mendy was remanded for violating his bail conditions.

The Judgment

In the Non-Custody Periods, the Tribunal held that although Mendy was ready to work, two major hindrances kept him from completing his duties. These were his suspension by the Football Association and his bail terms. The legal question here was whether Mendy was personally at fault for these obstructions.

Judge Dunlop reaffirmed that what was essential to determine Mendy's culpability was more than a mere causal link between his conduct and the ensuing labour market barriers. The decision clarified that in determining whether an employee is ready and willing to work, considering the presumed guilt or innocence or status on bail of the employee shouldn’t automatically ascertain their readiness and willingness to work. Applying the Burns principle, which holds that employees are liable for circumstances that render them unable to work if they caused those conditions, the Tribunal held that both the FA suspension and bail conditions were barriers that Mendy could not reasonably avoid or control. These were considered involuntary barriers and so City was still required to pay his wages during those times.

However, the circumstances in the Custody Periods were very different. The Tribunal ruled that Mendy was partly responsible for his unemployment because his incarceration was a direct result of his violations of the conditions of his bail. His conduct was deemed culpable and significantly raised the risk of being remanded into custody. Therefore, the Tribunal held that Mendy was entitled to be paid wages withheld during the Non-Custody Period while recognising that Manchester City had been legally entitled to withhold payment during the Custody Periods.

Key Takeaways

The employment tribunal decision in Mendy v. Manchester City offers critical lessons for sporting organisations and athletes engaged in complicated employment disputes. The case concerned withheld wages amounting to around £11 million. set significant legal precedents regarding when employers are entitled to withhold pay from employees who cannot perform their jobs.

In the absence of express contractual terms permitting deduction of wages, employers are only obliged to remunerate workers unless they themselves are not “ready, willing and able” to work due to avoidable impediments caused by themselves. The Judge differentiated between instances where Mendy could not work because he had committed bail breaches himself (when the City were entitled to deduct wages) and instances where he was barred by FA suspension and bail conditions (when wages should be paid).

The case highlights four essential principles. Firstly, express contractual terms prevail, especially in sports where standard-form employment contracts are prevalent. The tribunal pointed out that no express terms permitted Manchester City to retain wages in such situations. Secondly, courts do not interfere when the matter concerns implying further terms into contracts bargained with “unusual equality in bargaining power” that already exhaustively cover duties and obligations. Thirdly, wages of employees are afforded strong protection in Section 13 of the Employment Rights Act which severely limits the power of an employer to make deductions. Lastly, a determination of whether an employee is at fault for his or her inability to work involves more than mere “but for” causation and considerable culpability must be proven in such cases.

As Judge Dunlop puts it: “The question of whether Mr. Mendy deserves to be paid is one for commentators. The only question for me is whether Manchester City was legally entitled to withhold that pay”. This case serves as a reminder that it is legal entitlement and not moral deservingness that governs employment disputes. The case also highlights the importance of clear contractual provisions that anticipate potential scenarios where work performance might be compromised.

Impact on Indian Sports

The Mendy case has important implications for Indian sport, especially as the nation continues to build professional leagues in different fields.

The sports ecosystem in India has undergone a spectacular transformation over the last ten years, with the Indian Premier League (IPL) for cricket taking the lead, followed by leagues in football (ISL), kabaddi (PKL), and others. With these leagues maturing, contractual arrangements between clubs/franchises and players are getting complex and commercially relevant by the day.

Indian sports contracts currently tend to be vague on matters like suspension without pay, particularly in criminal charges prior to conviction. The generic player contracts of most Indian leagues might require re-drafting in the light of the Mendy judgment, which stresses that the right to withhold pay must be clearly defined in the contract and not by implication. Indian sports associations should pay attention to the difference the Tribunal drew between various kinds of player unavailability. The decision indicates that teams cannot simply hold back payment when players cannot play due to reasons beyond their control, even if the reasons include serious allegations.

The case also raises eyebrows about the status of sports governing bodies in India. If a governing body like the BCCI for cricket or the AIFF for football bans a player, does that unburden the team of the responsibility of paying wages by default? The Mendy case seems to answer this question in the negative, unless it is mentioned explicitly in the agreement.

For Indian sportspersons, some of whom might not have the bargaining leverage of Premier League football players, this case highlights the significance of knowing their contractual entitlements and situations wherein their salaries can be withheld. It could also persuade player associations in India to bargain for better safeguards in typical contracts. As Indian sports law continues to develop, the principles established in the Mendy case could provide valuable guidance for drafting contracts that balance the interests of clubs and players while ensuring clarity on crucial financial matters.

Conclusion

The Mendy v. Manchester City ruling is a milestone case in sport labour law that leaps across boundaries and sport. Through differentiating avoidable from unavoidable hindrances (in the case of wage reductions), the judgement leaves us with a rational guideline to tackle such cases across the globe.

This ruling is more than resolving one player's right to be paid £11 million in wages. It refocuses the power balance between clubs and players, with an insistence that such wages can be withheld only by express terms in a contract. The case acts as a harsh reminder that employment relationships within professional sport are subject to the law and rights, not to moral opinion.

As leagues become more professional around the world, from the Premier League to the IPL, this decision provides a template for drawing up more precise contracts that serve both organizational and player interests. The message is clear: In a world of growing commercial interests in sport, contractual accuracy is not a nicety but a necessity.

Author: Adamay Malik is a fourth year student at National Law School of India.

Edited by: Anushree Srivastava & Archita Jain